South Korea Telecom (SKT) is much cited in Europe as exemplar of ‘fair share’ in action – that is, those who generate the most traffic should pay towards the cost of carrying it
SK Broadband, a division of SK Telecom (SKT), has announced a partnership with streaming service Netflix. The two have been embroiled in a legal battle since Netflix’s smash hit TV programme Squid Game caused a massive surge in traffic – up to 1.2Tbps – on SKT’s network in September 2021.
In October 2021, the operator took legal action against Netflix to recoup some of the cost of carrying the immense amounts of traffic Netflix generates across mobile networks.
Netflix disagreed, pointing out that it invests massively in infrastructure too and that its content delivery network, Open Connect, is provided free of charge and reduces network traffic by up to 95%. There is also the vexed issue of network neutrality, although many point out the rules were drawn up when email was the killer app.
Exemplar for Europe?
However, SKT’s partial success at making Netflix pay is often held up by proponents of a ‘fair share’ mechanism backed by many of Europe’s largest telco groups. This thinking has also finally got the backing of the European Commission, in the shape of the Internal Market Commissioner Thierry Breton.
He launched a consultation into the issue in February while the CEOs of big telco groups lined up in support at MWC.
This included Group CEO of Orange, Christel Heydemann, who cited research PwC that found, “46% of telco CEOs think their companies won’t make it another decade” without some kind of fair share arrangement being the implication. This is now bandied about as fact.
The debate in Europe has sharply divided opinion, but proponent have cited SKT’s stance against Netflix as ‘proof’ fair share can succeed – many opponents argue it would be impossible to enforce.
All is fair in love, not war
SKT and Netflix have now dropped legal action against the other, clearly deciding cooperation is more profitable than conflict. UPDATE: The dispute between Netflix and SK Broadband goes back to at least 2019, but this was not SK Broadband’s only run-in with Big Tech. It and Facebook had a dispute that began in 2017; they settled on a usage fee regime worth $15 million annually, according to Roslyn Layton of Strand Consult, which follows the issue.
A press release issue today reads: “Moving forward, SK Broadband and Netflix will end all disputes with the signing of today’s partnership, and collaborate as partners for the future. This mutual decision stems from both parties’ shared foundational principle that prioritizes customers.”
In future, the two will release joint products, making it easier for customers to access Netflix’s content through SK Broadband’s IPTV, and SK Telecom’s T Universe. There will be various payment options including the telco providing bundles.
In other words, the customer will pay towards the transport.
They have also said they will work together on developing AI, such as for human-like conversations for customer service and support, and personalisation.