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[Asia Economy Reporter Koo Chae-eun] As the mediation of the 'network usage fee dispute' between SK Broadband and Netflix intensifies, tensions between Internet Service Providers (ISPs) and Content Providers (CPs) are rising.

The mediation proposal prepared through the intervention of the Korea Communications Commission (KCC) could serve as a reference for conflicts between CPs and ISPs. Although Netflix is not obligated to follow the mediation proposal, its significance lies in representing the government's stance on the contentious issues between CPs and ISPs.

According to industry sources on the 1st, Netflix and the KCC must submit their responses to the KCC's inquiry by early this month. The KCC sent an inquiry requesting Netflix to provide rebuttal materials against SK Broadband's position regarding the network usage fee dispute. SK Broadband was also asked to submit rebuttal responses to Netflix's position.

The responses are expected to serve as fundamental materials for mediating the conflict between Netflix and SK Broadband going forward.

Previously, in November last year, SK Broadband requested the KCC to mediate negotiations on network usage fees with Netflix. Since entering the Korean market in 2016, Netflix has been called a 'traffic hippo' but has paid '0 won' in network usage fees to telecom companies.

Inside and outside the industry, it is believed that the sharp edge of this mediation proposal is aimed at Google YouTube, which overwhelmingly dominates traffic share. The dispute between Netflix and SK Broadband is expected to serve as a 'prelude' to future negotiations between ISPs and YouTube. According to the KCC, as of last year, YouTube accounted for 47.8% of OTT services, more than 10 times higher than Netflix's 4.9%.

A telecom industry official said, "From the ISP perspective, the most sensitive and difficult counterpart could be Google YouTube," adding, "Because of its overwhelming traffic share, the outcome of this mediation could influence negotiations on network usage fees with YouTube."

This content was produced with the assistance of AI translation services.