South Korean internet service provider SK Broadband, a subsidiary of South Korean telco company SK Telecom, has filed a counterclaim against Netflix to demand payment for the bandwidth the streaming platform has used for the last three years.
This case comes in the wake of the South Korean court siding against Netflix in June in the case. Now SK Broadband is empowered to levy network usage fees on streaming platforms for consuming an excessive amount of bandwidth and causing heavy traffic on its network.
“We will review the claim that SK Broadband has filed against us. 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,” a Netflix spokesperson told TechCrunch.
The U.S. streaming giant lodged an appeal to a higher court against the court decision in July after it lost the first court case that the company filed in 2020. That case alleged that SK Broadband, which is responsible for managing its networks, has no right to demand fees for the bandwidth. Netflix has claimed that the ISP was trying to "double bill" -- its subscribers already pay for broadband use, and now want to charge the streaming company for it, too.
SK Broadband plans to charge about $23 million per year for network use, as per local media reports.
Back in 2019, SK Broadband requested the Korea Communication Commission come to a settlement, but the two companies couldn’t find an agreement.
SK Broadband claims that Netflix’s traffic on the ISP network has exponentially increased about 24 times, from 50 Gigabits per second in May 2018 to 1,200 Gigabits in September 2021.
Netflix says on 28 September that its investment in content production in South Korea has brought socio-economic impact worth $4.7 billion, covering everything from publishing to consumer goods. It claims to have led to the creation of 16,000 jobs in the country since it opened in 2016, using figures from a Deloitte Consulting report. Netflix Korea has 3.8 million paid subscriptions in South Korea as of the end of 2020, while its global paid memberships were estimated at 200 million, as per the report by Deloitte Consulting.
The Netflix spokesperson said on a separate note that the Korean show “Squid Game” is now on track to be Netflix’s biggest show ever and it’s the first Korean show to ever be No. 1 on Netflix U.S.
Meanwhile, another global streaming giant, Disney Plus, is set to launch in South Korea in November. Disney Plus reportedly plans to use third-party content delivery networks (CDNs) instead of using ISP’s networks to avoid the bandwidth usage fees.