National Assembly Surprised by SKT-Netflix Agreement... Discussing Appearance of Company Heads

Tensions are rising between the National Assembly's Science, Technology, Information and Broadcasting and Communications Committee and SK ahead of next month's national audit. Although SK Telecom, SK Broadband, and Netflix mutually withdrew their lawsuits over network usage fees that had lasted for three years and reached a settlement, the attendance of representatives from these companies is being discussed for the audit.

On the 27th, the Committee plans to discuss witnesses ahead of the audit starting on the 10th of next month. Although not yet finalized, the first list of witnesses exchanged recently between the ruling and opposition parties in the Committee includes senior officials from SKT, SKB, and Netflix. SKT CEO Yoo Young-sang and SKB CEO Park Jin-hyo are mentioned. Even though both sides withdrew lawsuits and reconciled after three years, the issue remains a focus for this year's national audit.

[Image source=Pixabay]

The reason for summoning the parties involved in the concluded lawsuit stems from the National Assembly's bewilderment. Just as people's feelings change from morning to evening, the companies swiftly changed their stance.

SKB applied to the Korea Communications Commission in 2019 for compensation, citing a surge in transmission costs due to increased Netflix traffic and Netflix's refusal to negotiate network usage fees. In response, Netflix filed a lawsuit in 2020 seeking confirmation of non-existence of debt, and while the second trial was underway, on the 18th, SKT, SKB, and Netflix mutually withdrew the lawsuits and signed a strategic partnership agreement.

At the beginning of the dispute, since communication networks have strong public characteristics and Korea's communication sovereignty needed protection amid the global big tech offensive, the political sphere raised the necessity to address the issue. SKT and SKB also requested help from the National Assembly for these reasons. The Assembly sympathized with the concerns and, regardless of party lines, proposed bills on network usage fees, held forums, and met with domestic and international figures to provide support. Currently, seven bills related to network usage fees are pending in the Assembly. Until recently, the political sector maintained interest in this as one of the major ICT issues. However, suddenly, the parties shifted their stance by signing a strategic partnership contract. Some Committee members view this as a change of heart or betrayal.

From the National Assembly's perspective, which had supported the parties materially and morally for three years, the sudden reconciliation is inevitably surprising. Although the companies withdrew lawsuits, voices are emerging that such a matter with significant public interest should not be left to end as a private contract between companies. Even if the dispute has ended domestically, globally, including in the European Union (EU), laws are being prepared to ensure big tech contributes to network infrastructure investment through measures such as establishing funds. Korea was the first in the world to bring the network usage fee debate to the surface, and there is a need to continue leading discussions as a global ICT leader.

Since the adoption of audit witnesses is a sensitive matter, discussions between the ruling and opposition parties in the Committee are ongoing. Once witnesses are confirmed, they must be notified at least seven days before their attendance date. Due to the Chuseok holiday, to have witnesses attend the Korea Communications Commission audit on October 10, they must be confirmed by the 27th; to attend the Ministry of Science and ICT audit on October 11, confirmation must be by October 4. The Committee plans to finalize witnesses for the Communications Commission on the 27th and decide on Ministry of Science and ICT witnesses around the 4th, right after the holiday. There was even a pointed joke suggesting that if subsidiary CEOs are summoned, business executives might come citing overseas business trips, so the owners should be called to ensure the CEOs attend. However, only CEO Yoo and CEO Park are included in the first list.

Meanwhile, separate from network usage fees, the attendance of CEOs from the three mobile carriers as witnesses is also being discussed between the ruling and opposition parties in the Committee. Questions related to household communication costs, 5G 28GHz, and other communication issues are expected to follow.