Netflix and SK Broadband have reached a settlement in their three-year legal battle over the responsibility for network maintenance costs. The suits filed both parties have been dropped, and they have instead entered into a partnership for the benefit of customers.
SK Broadband, a subsidiary of network provider SK Telecom, had demanded that Netflix take financial responsibility for the increased internet traffic caused its video content. Netflix, on the other hand, argued that network maintenance is the duty of the internet service provider (ISP).
As part of their settlement, SK Telecom and SK Broadband will introduce new subscription models that include Netflix membership. Telecom users will also have access to Netflix via IPTV, and new subscription packages similar to Netflix’s ad-supported membership will be launched. Additionally, the three companies will collaborate to develop AI technologies that provide tailored content recommendations based on user data.
The partnership is a mutually beneficial agreement, according to Netflix. As part of the deal, Netflix will share its technology, known as “Open Connect Appliances” (OCA), which reduces network traffic burden. Deploying OCA will result in a significant reduction in traffic, with over 95 percent being eliminated.
The legal battle between Netflix and SK Broadband has garnered global attention, raising questions about who is responsible for network maintenance costs. While the European Union has also debated charging content providers for network fees, this case is the first in Korea to reach court and propose legislation on the matter.
Although the settlement between Netflix and SK Broadband is a positive development, there is still a need for policy revisions to address the network fee issue more comprehensively. The proposed bills at the National Assembly regarding network usage fees for streaming services remain under review.
Sources:
– [The Korea JoongAng Daily – “Netflix and SK Broadband drop lawsuits in nod to partnership”](https://en.yna.co.kr/view/AEN20230804004200315?input=www.twitter.com)
– [Image Source: AFP/YONHAP](image source: AFP/YONHAP)
