Netflix responds to ‘network user fee’ disputes in South Korea

SEOUL, Nov. 4 (Yonhap) — The vice president of Netflix Inc. On Thursday, the global broadcasting giant was well aware of the controversies surrounding the costs associated with increased network traffic due to an explosion in viewership in South Korea.

The US-based company has been criticized by local Internet Service Providers (ISPs) and regulators for refusing to pay for use of the network. President Moon Jae-in also said earlier that global platforms and content providers should take responsibility.

“We fully agree with what President Moon has said,” Dean Garfield, Netflix vice president of global public policy, said at a press conference in Seoul, adding that Netflix wants to contribute to the global ecosystem of entertainment and storytelling here.

Garfield noted that Netflix “has invested more than 1,000 billion won to create and provide a content delivery network, called Open Connect, to store our content as close as possible to members.”

Open Connect, which was developed 10 years ago, has proven to be effective in reducing network traffic by at least 95% and helped ISPs save more than $1.2 billion in 2020 alone, according to Netflix.

However, local ISPs such as SK Broadband Co. , they accuse Netflix of enjoying their networks for free despite the traffic overload caused by the Netflix streaming service, which has around 4 million subscribers in South Korea.

In June, Global Broadcasting lost a lawsuit against SK Broadband. A local court ruled against Netflix, saying it was “reasonable” for Netflix to offer something in exchange for the service.

The vice president refuted those claims, saying that Netflix treats more than 1,000 of its ISP partners around the world as equals.

Garfield also claimed that Netflix will continue to invest in Korean content, as there are more local players than anywhere else in the world.

“Since 2016, Netflix has presented more than 80 Korean films and series,” he said. “We spent about $700 million on Korean content between 2015 and 2020, and this year alone we plan to spend about $500 million.”

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