KCC Sends Inquiry to Netflix
SK Broadband Also Receives Rebuttal Materials
Response Requested by Early March for Drafting Financial Plan
Reply Expected to Serve as Basic Data for 'Network Usage Fees' Revision
[Asia Economy Reporter Koo Chae-eun] The Korea Communications Commission (KCC) has sent an inquiry letter to Netflix requesting rebuttal materials regarding SK Broadband's position on the network usage fee dispute. SK Broadband was also asked to provide rebuttal responses to the opposing party's position. The responses submitted by both sides to the KCC are expected to be key to the 'network usage fee' arbitration proposal.
According to industry sources on the 28th, the KCC recently sent inquiry letters to both Netflix and SK Broadband based on the materials submitted by both parties. The deadline for submitting responses was set for early next month.
KCC: "Submit rebuttal materials by early March"
For example, Netflix was asked, "What is your position on SK Broadband's opinion that the claim of providing the Open Connect Program (cache servers) free of charge to assist network management is ineffective?" Meanwhile, SK Broadband was asked to "rebut the content providers' (CP) claim that transmission is the responsibility of the network service provider (ISP)."
A KCC official explained, "To gather the arguments of both sides from a neutral standpoint, we requested that each side submit arguments defending the opposing party's claims," adding, "This is an important stage of opinion hearing, and the collected responses will serve as fundamental materials for creating the arbitration proposal."
The inquiry letter sent by the KCC reportedly contains dozens of questions, including smaller questions embedded within larger ones. In particular, the inquiry itself reflects many of the intense conflicts repeatedly occurring between CPs and ISPs, so considerable time was spent structuring the questions.
Possibility of Netflix Filing a Lawsuit Remains
Initially, the industry was skeptical about whether Netflix would even participate in the KCC's mediation process. However, after the arbitration began in November last year, Netflix submitted official materials within a month, indicating compliance with domestic law, so it is highly likely they will respond to this inquiry as well. However, the preparation of the arbitration proposal is expected to take considerable time. This is because the inquiry letter must go to Netflix's domestic legal representative law firm, then be approved again by the headquarters, causing delays in the process.
Netflix and SK Broadband are considered to have reached an agreement if no separate lawsuit is filed within the arbitration period (90 days). Therefore, if Netflix does not accept the arbitration proposal prepared by the KCC, there remains a possibility of filing a civil lawsuit.
Meanwhile, in November last year, SK Broadband requested arbitration from the KCC to mediate negotiations on network usage fees with Netflix. Netflix, which entered the Korean market in 2016, is called a 'traffic hippo' but has paid '0 won' in network usage fees to telecom companies. Netflix claims it provides cache servers free of charge instead of paying network usage fees, but SK Broadband's position is that this does not reduce domestic network expansion costs and thus cannot be a fundamental solution.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
