Netflix claims to cut costs with its own technology
Apart from installing SKB OCA, you have to pay network cost Photo=News1
[Financial News] The second leg of the legal battle between SK Broadband and Netflix is in full swing.
In this litigation, the mutual non-settlement logic raised by Netflix and the establishment of the right to claim the refund of unfair profits claimed by SK Broadband are expected to be issues.
In a situation where telecommunication companies around the world have requested content providers such as Netflix to share network investment costs, the focus is on what the Korean court will make.
Mutual non-settlement & middot; issue of establishment of unfair advantage
According to related industry sources on the 16th, the Seoul High Court will hold an appeal in a civil lawsuit against SK Broadband and a civil lawsuit against SK Broadband for network use charges filed by Netflix against SK Broadband.
In this appeal, Netflix is expected to emphasize that it can replace the cost of using the network by installing the Open Connect Alliance, which it developed in-house.
OCA technology is a content delivery network developed by Netflix. This means having a replica server close to the carrier to reduce data traffic. This is to apply the so-called mutual non-settlement method.
Bill & Keep is a settlement method between ISPs. It means that no network usage fee is paid on the premise that the traffic exchanged between connected ISPs is similar.
In other words, Netflix argues that OCA should reduce the traffic burden of telecommunication companies and that the network use cost is similar, so do not exchange with each other.
In response, SK Broadband drew a line that the mutual non-settlement method is made between ISPs, and that transactions between ISPs and CPs cannot be established. In addition, it maintains the position that the installation of OCA and payment of fees for using the domestic network are separate matters.
In particular, as the amount of traffic generated by Netflix on the SK Broadband network is increasing exponentially, they are in a position to pay network usage fees.
An SK Broadband official said, “The value-added telecommunication service provider uses the key telecommunication service provided by the key telecommunication service provider and asks for a fee.”
SK Broadband is of the opinion that even if Netflixs OCA is installed in domestic bases, the same network usage fee should be paid as with domestic CPs such as Naver and Kakao.
Controversy over network usage fee draws attention from overseas
The global telecommunication industry is also of the position that operators such as Netflix, which make money by generating excessive traffic, should also share the network investment cost. It is meaningful that telecommunication companies around the world, not in a specific country, have formalized the strengthening of traffic management costs for big tech companies.
The reason why global telecommunication companies are at odds with big tech companies is that the burden of network investment for ISPs, which is burdened with maintaining network quality, has increased with the beginning of the era of high-definition video content.
An industry insider pointed out that “a company that generates more traffic than before should pay a reasonable fee for it.”