South Korean internet service provider SK Broadband, formerly Hanaro Telecom, on Thursday, 30 September, announced that it has filed a counterclaim against Netflix, demanding payment for the amount of bandwidth the streaming giant has used in the last three years.
The move comes after a Seoul court in June 2021 ordered Netflix to pay network operators to carry its traffic. Multiple South Korean lawmakers have also called out other content providers who generate a lot of traffic but do not pay network fees, as reported by Reuters.
"We will review the claim that SK Broadband has filed against us,” said a Netflix spokesperson. “In the meantime, we continue to seek open dialogue and explore ways of working with SK Broadband in order to ensure a seamless streaming experience for our shared customers."
SK Broadband claims that data traffic from Netflix jumped 24 times from May 2018 to 1.2 trillion bits of data processed per second as of September. This recent surge is attributed to the success of multiple Netflix productions from South Korea like Squid Game and DP. Netflix noted that Squid Game is on track to become its biggest show ever. It’s also the first Korean show to ever reach the top spot in the U.S. Netflix charts.
SK Broadband said that Netflix is the country’s second-largest data traffic generator behind Google’s YouTube, both of which are the only content providers reportedly not paying network usage fees. Others like Amazon, Apple, and Facebook have all been compliant.
Court documents estimate that Netflix owes the Seoul-based broadband firm about 27.2 billion won in network usage fees, which is equivalent to US$22.9 million, in 2020 alone.
Netflix appealed the court’s decision to have it pay SK Broadband in July of this year, but fresh proceedings are not expected to start until late December.
Netflix also said in a statement that it contributed to the creation of about 16,000 jobs in South Korea and that its investments in local productions have brought socio-economic impact worth US$4.7 billion.
Written by Kyle Chua
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