Netflix Settles Dispute With South Korean ISP That Demanded Extra Money Just Because ‘Squid Game’ Was Popular
A few years ago we noted how a South Korean ISP named SK Broadband had sued Netflix, demanding that the streaming giant pay it more money simply because the hit series Squid Game was so popular. It was one small part of a global push by broadband providers to force streaming companies to pay them extra money for no coherent reason.
After several years of fighting, Netflix and SK Broadband have quietly settled their dispute, with Netflix promising to utilize some ambiguous SK AI products in exchange for both sides dropping their lawsuits:
SK Broadband and parent SK Telecomannounced in a joint statement with Netflix that they had agreed on a partnership to release joint products and seek ways to use artificial intelligence (AI) products being developed by SK."
While the two sides have settled, these sort of feuds are only really heating up.
Big ISPs from AT&T to SK Broadband have tried to argue that because streaming services are driving more network usage, streaming providers somehow owe broadband ISPs even more money. But it's a ridiculous premise; both Netflix and its customers already pay significant sums for bandwidth (especially here in the U.S. where monopolies abound, competition is muted, and prices are artificially inflated).
ISPs design their networks for maximum potential peak load. It's completely irrelevant how popular some content traveling over your network is. Your job as a telecom operator is to design networks that easily flex to handle a surge in capacity, regardless of traffic type, because you're already being paid handsomely by companies and consumers alike (and usually subsidized by government in some fashion).
If you're an ISP whose network can't handle the short-lived network traffic boost that comes from a popular TV program, it's because you're not designing your network and investing in capacity properly. It's not suddenly the content company's job to pay you more money to fix a problem you created through cutting corners or under-investment. Especially in the heavily subsidized U.S.
The problem: regulators and politicians in countries like South Korea have spent too much time listening to greedy ISPs, and constructed a regulatory paradigm that normalizes the quest by broadband providers to get more money for doing absolutely nothing. A similar lobbying effort by telecoms has seen some traction in Europe, and has also long been a dream of telecom lobbyists here in the U.S.
If the telecom industry's EU gambit succeeds (they've proposed forcing companies like Netflix to pay a troll toll directly to big telecoms), it's going to reheat the net neutrality war here in the States in a major way.
Such efforts have always been little more than monopolies abusing their power to bully and extort others; but monopolies have had good luck convincing corrupt regulators to pretend this is all very serious, above board policymaking altruistically aimed at shoring up broadband access. It almost always involves some claim that companies like Netflix get a free ride" on the internet (they don't because nobody does).
It's all greedy bullshit dressed up as serious policy. The details shift slightly over the years, but the quest is always the same: fool regulators into letting telecoms offload ordinary network upgrade costs onto somebody else. It was greedy bullshit when AT&T demanded that Google pay it huge sums of additional money in 2005 for riding its pipes," and it's still bullshit now.