Controversy Growing over Netflix’s Free Use of Networks in Korea

Netflix, the world's largest video streaming service company, has tried to avoid paying network fees in Korea by installing more cache servers. Yet Korean cable TV and telecom operators say that although Netflix runs its own cache servers, the US video streaming service giant has to pay fees for using the networks for its high-quality video services. Otherwise, it could trigger controversy over reverse discrimination not only against Korean cable TV and mobile operators but against Korean and foreign internet business operators.

According to the telecom industry on July 2, Netflix is managing servers and access rights to networks after building its own cache servers while forging network partnership with cable TV operators such as D’LIVE and CJ Hello.

Netflix is not paying network fees for these cable TV operators simply because it runs its own cache servers. A cache server collects information that is frequently searched for by internet users. When a video service company runs separate cache servers, it can quickly find information and greatly ease overload.

Netflix is managing cache servers separately in overseas countries as well as Korea. "We are paying much attention to the use of networks," said a director of Netflix in a recent conference. "We want to provide high quality content without using bandwidths through innovation."