[Click eStock] 'Free Riding' Netflix Expected to Benefit from Network Usage Fees

[Asia Economy Reporter Junho Hwang] Daishin Securities maintained SK Telecom's target stock price at 89,000 KRW on the 15th, expecting benefits from the legal dispute over network usage fees between SK Telecom's subsidiary SK Broadband (SKB) and Netflix.

The first hearing of the appeal trial to confirm the non-existence of debt between the two companies will begin on the 16th. This legal dispute started in April 2020 when Netflix filed a lawsuit against SKB to confirm that it has no obligation to pay the network usage fees demanded by SKB.

SKB argued that since Netflix uses domestic internet networks to provide video services and generate revenue, it should pay a reasonable usage fee. On the other hand, Netflix countered that it installed its self-developed OCA (Open Connect Alliance) in Japan, significantly reducing traffic, and therefore does not need to pay separate usage fees. However, Netflix lost in the first trial. The court ruled that the parties should negotiate whether to enter into a contract or what compensation to pay, and Netflix filed an appeal.

In this context, the Global System for Mobile Communications Association (GSMA) board approved the promotion of a global CP universal fund contribution policy related to network usage fees. Last year, the Netflix free-riding prevention law also passed the National Assembly plenary session.

Researcher Kim Hee-jae stated, "Although network usage fee revenue may not be generated immediately, there is a possibility that investment costs borne by telecom companies may be reduced directly or indirectly, or that revenue may be generated through indirect methods such as zero-rating. Therefore, the current situation regarding networks is considered favorable to telecom companies."

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