Netflix appeals against judgment of first trial last year, SKB countersuit
The two companies are parallel to the previous position… Garfield, Netflixs vice president of policy, is answering a question from reporters at a media open talk held at Dongdaemun Square at JW Marriott in Jongno-gu, Seoul on the 4th. 2021.11.4/News 1 © News1 Reporter Eun-na Ahn
Reporter Jiwon Yoon = On the first day of the second round of the network fee lawsuit between Netflix and SK Broadband, the two companies adhered to their existing stance on the obligation to pay the network usage fee.
The first hearing was held at the Seoul High Court on the 16th for the appeal of the network usage fee between SK Broadband and Netflix. This lawsuit follows the appeal of Netflix, which lost in the first trial in June of last year, dissatisfied with the ruling. In the first trial, the court ruled that Netflix had an obligation to pay SK Broadband for network use.
Afterwards, SK Broadband countered with a counterclaim against Netflixs appeal. This is because Netflix is taking unfair advantage by not paying network usage fees. The two lawsuits filed by the two companies were merged and proceeded.
◇Netflix emphasizing the principle of OCA technology and mutual non-settlement
Netflix is of the view that SK Broadband is shifting the obligation to transmit content to itself.
On the same day, Netflix claimed that traffic could be reduced with its Open Connect appliance technology, just like the first trial. OCA is a technology that distributes traffic by installing a cache server that temporarily stores data in the service country. For this reason, Netflixs logic is that there is no need to pay a separate network usage fee.
In addition, Netflix re-emphasized the mutual non-settlement principle and the Bill & Keep principle. It is the position that companies do not pay if they connect directly for mutual benefit. He then argued that if OCA was installed in SK Broadbands network, traffic problems could be solved without using OCA installed in Tokyo or Hong Kong.
On this day, Netflixs lawyer said that the first trial judgment to pay the price just because it was connected was unprecedented and wrong.
◇SKB, the no-settlement principle does not apply to CP
On the other hand, SK Broadband claims that it is receiving payment for network use from other domestic and foreign content providers other than Netflix, and that Netflix, which does not pay it, is taking unfair advantage.
SK Broadbands attorney said, “The issue in this case is whether the plaintiff has the duty to send the content to the end user.
Also, they argued that the OCA technology claimed by Netflix is not exempt from the obligation to pay the network usage fee even if it is installed in the domestic network. In particular, it said that expenses such as domestic network usage fee, base station rental fee, Internet data center fee, and electricity usage fee must be paid separately.
He also countered that the Bill & Keep principle that Netflix claimed is a principle that applies to Internet service providers, not CPs. The objection is that Netflix is not an ISP under the current law, so the principle does not apply.
Thomas Bolmer, director of global content transmission division at Netflix, Tae-eon Koo, Attorney at Law Law Firm Lin, Dae-geun Cho, Professor at Sogang University, Kyung-jin Choi, Professor of Law at Gachon University, Nak-jun Koh, Internet Users General Manager, Korea Communications Commission Jun-mo Kim, Head of Communications Competition Policy Division, Ministry of Science and ICT, Sang-pil Yoon, Head of KTOA Office 2021.11.25/News 1 © News1 Reporter Lee Ki-beom
◇ Network usage fee is compulsory to form global public opinion… Domestic bill pending
On that day, the court requested data on whether Netflix uses SK Broadbands network, whether there is an agreement between the two companies to maintain a connection, and the standards for which SK Broadband receives fees from CPs. As a result, the technical issues will be reviewed at the hearing scheduled for May 18.
Among them, as public opinion is formed that global CPs should bear the network usage fee, it is noteworthy whether this will affect future trials. Earlier, at the Mobile World Congress 2022 held in Barcelona, Spain on the 3rd, global telecommunication companies agreed that CPs should share network investment.
At that time, the World Mobile Telecommunications Operators Association approved a report through the board of directors stating that global CPs that cause huge traffic should share network investment. In particular, there was a discussion that a government-led fund should be created and CPs should participate in network investment in the form of paying money.
However, since the report of the board of directors alone is not compulsory, the issue is whether or not each country will prepare a bill. KT CEO Koo Koo Koo, who served as the chairman of the GSMA, also created a fund at the time of attending MWC, and who participates and does it is not my domain. He expressed his position that it seems to be the domain of those who make laws and those who enforce them.
A telecommunications industry official said that the lawsuit between Netflix and SK Broadband is likely to go to the final trial, so it will take another year or two to come up with a bill in the National Assembly rather than a precedent. Currently, there are five bills pending in the National Assembly regarding the mandatory payment of network usage fees.