SK Broadband Most Vocal in Criticizing Free-riding
The three major Korean telecommunication companies are divided over the issue of imposing network use fees on Netflix, which is enjoying brisk business both at home and abroad.
The most vocal critic of the free-riding issue is SK Broadband (SKB). SKB is taking a strong stance against Netflix as it is seeking to expand its own over-the-top (OTT) service “Wavve.” SKB can hardly accept an increase in its network investment burden due to its competitor Netflix’s free use of telecommunication networks in Korea at a time when it needs to make big investment to expand its services.
In response, Netflix suggested it would install a cache server with its own money that would reduce traffic burdens on overseas communication networks by pre-storing popular videos. "Because a cache server stores and streams content close to Netflix subscribers, it can reduce traffic and cut the cost of transmitting data to very distant places," Netflix said.
However, since the installation of a cache server means that Netflix will continue to use Korean networks for free, it will not help resolve the conflict between the two companies. Eventually, SKB filed a complaint with the Korea Communications Commission in November 2019. Then, Netflix recently responded to the complaint by filing a suit in order to obtain a court confirmation that Netflix owes nothing to SKB. Regarding the issue, the Citizens’ Coalition for Economic Justice criticized Netflix for taking legal action, calling it an “absurd and brazen act.”
Unlike SKB, which has been going on a full offensive against Netflix, KT is monitoring the situation. KT also operates its own OTT, “Seezn,” but to secure a variety of content, it needs to collaborate rather than square off with Netflix. Unlike SKB, KT has already secured enough overseas networks, so it is not actively responding to a surge in traffic caused by Netflix.
LG Uplus took one step further than KT and signed a partnership with Netflix in 2018. The carrier allows Netflix to use its networks free and provides Netflix content using a cache server installed by its partner, which resulted in the fastest service speed. In addition, Netflix is helping LG Uplus, the third largest provider of IPTV services in Korea, increase subscribers.