A court case in South Korea concludes the loss of Netflix and a win for the country’s ISPs, which may now be allowed to impose fees for bandwidth usage on traffic-consuming streaming platforms. The decision is likely to be challenged, as it charges a new wave of streaming services with ISP-discussed fares just as the market is exploding. As published by the Korean Economic Daily, the court’s decision is less prescriptive than any official’s “fix it in you” “but it does not protect streamers from the one class bandwidth fee they have been fighting for years.
Netflix filed a lawsuit in 2020 alleging that ISP SK did not have the right to claim money for the bandwidth used on the broadband platform, much like the legal dispute that erupted in 2014. Immediately, ISPs complained that streaming services were receiving excessive bandwidth and that companies had to pay something to offset the cost of their supply. Streaming sites responded that they were already meeting requests from users to pay for the bandwidth in question and were trying to “double” ISPs and charge twice for the same bit.
But the technical reality is a bit more complex and Netflix ends up paying what it calls interconnection fees to provide the infrastructure needed to deliver large amounts of data quickly and consistently. Netflix says it’s basically a “fast track” tax, but for lack of talk after the matter was settled at the time, it looks like they wrote it down as a business expense. In a statement proposed by its Korean affiliate (published in the same Korean economic daily Story), Netflix said it had “not paid any of the fees claimed by SS Broadband, network usage fees for ISP (Internet) use or anything equivalent” service providers) worldwide.
“It’s not clear if this classifies interconnection and caching as” equivalent “or if this arrangement has changed; I’ve asked the agency for clarity and will add it to the story if they respond.” In Korea, the problem is not so much solved, and with the huge development there, streaming sites probably don’t have to pay a fee to match their success, so demand also increases. The recent court decision, however, returned the ball to their court, stating that “it must be determined by negotiation between the parties involved whether some remuneration will be paid.”
