South Korean court rules that network operators can charge broadband fees to big data users like Netflix

As the video streaming market explodes, a South Korean court has issued a controversial ruling on a case. In 2020, Netflix filed a lawsuit, claiming that South Korean broadband operators had no right to require the platform to pay for users' bandwidth usage. In fact, such a conflict broke out as early as 2014. At that time, ISPs generally complained that streaming services consumed too much bandwidth and asked related companies to pay extra to offset the related costs.

(Screenshot via Korean Economic Daily)

Streaming sites hit back, saying they were simply fulfilling requests from users who had already paid for the relevant broadband, and that ISPs were trying to "double-charge" them for this.

Unfortunately, the Korea Economic Daily points out that the court's latest ruling is not as normative as "you two parties in dispute should figure it out on your own" and fails to protect streamers from the exemptions from such bandwidth fees that they have been fighting for for years.

On the other hand, the technical solutions of streaming service providers are indeed somewhat complicated in real-world deployments, and Netflix ultimately pays so-called interconnection fees to facilitate the infrastructure needed to deliver large amounts of data quickly and consistently.

Netflix once said that this was essentially a "fast track" surcharge, but in the face of urgent development pressure, they ultimately attributed it to business operating costs.

The Korean subsidiary said in a statement that it had not been charged the extra fees claimed by SK Broadband by ISPs elsewhere in the world.

It's not clear whether ISPs equate interconnect with caching, or whether these arrangements have changed.

We have asked the company for clarification and will update if they respond.

Foreign media pointed out that although the problems in the Korean market have not been properly resolved, in the face of huge growth, streaming sites will become increasingly unwilling to pay fees proportional to their development, so the two parties decided to go to court.

In the latest ruling, the court believes that "whether a certain fee needs to be paid" is still a matter for the relevant parties to negotiate and decide. For broadband providers, this is obviously a ruling that guarantees a stable income. As for how the subsequent charging standards will change, it is not yet known.

However, the Democratic-led Federal Communications Commission (FCC) is likely to push for stronger net neutrality rules. Netflix previously tried to push for the abolition of the fee, but ultimately abandoned the idea.