SK Broadband, Netflix Resolve Years-Long Network Fee Dispute; Announce Strategic Partnership

SK Broadband and Netflix conclude their long-standing dispute, entering a strategic partnership to amplify customer experiences on pay TV and smartphones, beginning next year.

The legal feud between SK Broadband, a major Korean internet service provider, and Netflix has persisted over the years, predominantly revolving around network usage fees. SK Broadband has accused Netflix of being a freeloader.

The Korean company had alleged that they have refused to pay for the network's usage despite the significant strain caused by its streaming service. They claim that Netflix's traffic skyrocketed from 50 Gbps in May 2018 to 1,200 Gbps in September 2021, primarily attributed to the popularity of shows like "Squid Game" and other Korean-language dramas.

On the other hand, Netflix maintains that demanding internet access fees from them would equate to a double charge, as users are already paying fees. In June 2021, a local court sided with SK Broadband, deeming it "reasonable" for Netflix to offer something in return for using the service. However, Netflix contested the ruling, resulting in the lawsuit being abeyant.

In a Seoul High Court trial last year, Netflix's legal representatives argued that both companies had previously agreed on interconnecting separate internet networks. Known as "peering," the setup would not involve any payment.

SK Broadband countered this claim, stating that conditions had changed since May 2018. They revealed that the two parties had shifted from the BroadBand Internet eXchange in Japan to SK Broadband's privately leased line for peering, contrasting with the previous structure on the Seattle Internet eXchange.

Following the legal dispute resolution, SK Broadband, its telecommunications subsidiary SK Telecom, and Netflix have entered into a strategic partnership to enhance customer service. Under the agreement, SK Broadband and SK Telecom will develop new services to give customers access to Netflix on their pay TV platform or smartphones, starting in the first half of next year.

The settlement between SK Broadband and Netflix marks a significant milestone, as both parties commit to putting their differences aside and collaborating for the future.

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