SK Broadband and Netflix have resolved their litigation regarding network usage fees and have entered into a partnership. This agreement allows SK Broadband customers to access Netflix content on their mobile and IPTV platforms.
The two companies have withdrawn their lawsuits and reached a strategic partnership. SK Broadband, which faced challenges in acquiring subscribers without offering Netflix content, and Netflix, concerned about potential international implications, surprised many with this agreement.
The details of the partnership remain undisclosed. However, one of the contentious issues, Netflix’s proprietary network called Open Connect Appliance (OCA), was discussed. SK Broadband, SK Telecom, and Netflix have agreed to deploy OCA in order to provide a stable customer experience. This method reduces network usage and has been previously adopted by Netflix through partnerships with telecoms companies.
Netflix has announced that they plan to offer OCA free of charge and the specific details will be worked out through operational discussions. Currently, LG Uplus provides Netflix service through a domestic OCA installation, and KT is connected to Japan’s OCA.
There is speculation that Netflix will compensate SK Broadband with fees corresponding to network usage as part of the settlement agreement.
Furthermore, SK Telecom, SK Broadband, and Netflix have announced a partnership to offer customers a seamless Netflix experience on various platforms such as smartphones and IPTV. This will include launching Netflix-bundled products in combination with SK Telecom’s tariff plans and SK Broadband’s IPTV products.
The telecoms industry is urging the establishment of legal standards for network usage fees. Currently, there are eight proposed amendments to the Telecommunications Business Act in the National Assembly aiming to clarify these fees. It is important to prevent similar disputes in the future.
Professor Shin Min-soo from Hanyang University’s Business Department emphasized the need for legislation to establish basic guidelines for network usage to prevent unnecessary conflicts.