Netflix Saying They 'Respect' but Filing a 'Lawsuit'... Speaking Out of Both Sides of Their Mouth

[Asia Economy Reporter Kim Heung-soon] The amendment to the Telecommunications Business Act, which includes the provision that overseas content providers (CPs) such as Netflix must also cooperate in maintaining stable internet service quality in South Korea, has passed the National Assembly. The key issue is whether CPs should pay wired telecommunications operators for using internet networks. On the 21st, Netflix stated a general position, saying, "We respect the judgments of the National Assembly and the courts and will provide high-quality services to consumers worldwide, including in Korea." However, since Netflix plans to proceed with the lawsuit it filed against SK Broadband regarding the payment of network usage fees as scheduled, criticism has followed, questioning whether it is speaking with a double standard.

The formal name of the civil lawsuit Netflix filed against SK Broadband is a "confirmation of non-existence of debt" suit. The role of CPs is to provide quality content to consumers, while the responsibility for network management lies with internet service providers (ISPs) like SK Broadband. Therefore, Netflix is asking the court to determine that there is no debt obligation to pay network usage fees.

Considering Netflix’s statement that it will also respect the court’s judgment, it appears there will be no change to its existing policy of not intending to pay network usage fees until the lawsuit’s outcome is decided. According to the amendment to the Telecommunications Business Act passed by the National Assembly plenary session the day before, value-added telecommunications service providers meeting criteria such as the number of users and traffic, as defined by presidential decree (enforcement ordinance), must "secure means to stabilize services." The specific methods for these means will be detailed through the enforcement ordinance.

Netflix has argued that instead of paying costs under the name of network usage fees to ISPs in the respective countries, it can reduce traffic overload by storing content close to its service users and streaming it through its free "Open Connect" service. SK Broadband countered that the fundamental solution is for CPs to share the costs involved in managing network quality. Ultimately, rather than vague guidelines requiring the securing of service stabilization means, clarifying the issue of network usage fee payments through court rulings is expected to narrow the gap between the two sides’ positions.

An SK Broadband official said, "We have received the complaint filed by Netflix, are reviewing its contents, and are preparing to submit a response. The passage of this amendment is significant in that it establishes a legal basis for the obligation to protect users even for global CPs providing services to domestic users."

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