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| Netflix Vice President of Public Policy Dean Garfield speaks at a press conference held at the JW Marriott Hotel Dongdaemun Square Seoul, Thursday. Yonhap |
US platform insists that OCA is the answer for network operators
By Kim Bo-eun
A senior Netflix executive made clear his company's stance on the network fee controversy ― that it will not pay internet service providers (ISPs) for the heavy data traffic generated by its services.
Korean lawmakers have pledged to set up regulations that will require content providers such as Netflix to pay for using local networks. Currently, local content providers such as Naver and Kakao pay network fees to ISPs, as do global firms such as Facebook. Garfield came here for a series of meetings with government officials and lawmakers earlier this week, to address the snowballing controversy over network fees, after President Moon Jae-in referenced the issue, calling for the company to "take greater responsibility."
Given the negative sentiment here, Netflix instead pledged to share profits reaped from the success of the locally produced show "Squid Game" with its Korea-based producers.
"We're very pleased and humbled by the success of the show, and know that we have a responsibility to ensure that success is shared with everyone who was part of the show. And we are actually planning to do exactly that," Netflix Vice President of Public Policy Dean Garfield told reporters during a press event, Thursday.
This proposal came in response to a separate controversy about Netflix's contracts with content producers. Netflix owns the intellectual property of the content it invests in, so producers face profit limitations, even when their shows become global hits like "Squid Game."
During the event, Netflix specifically referred to its Open Connect Appliances (OCA) as its answer to addressing the burden of managing heavy data traffic on ISP networks. A local network operator has demanded that Netflix pay for using its network, given that data traffic has spiked due to the popularity of its shows, such as "Squid Game."
"We fully embrace the notion that the internet ecosystem and the networks are a part of our shared responsibility," Garfield said.
Netflix introduced its OCAs, which localize traffic, alleviating congestions, and enabling better service quality for customers. The OCAs are available to partner ISPs free of charge. The executive said that there are 14,000 OCAs around the world, accepted by over 1,000 ISPs in 140 countries, and that these have helped reduce network traffic by 95 percent. Garfield said that another executive will visit Seoul in the coming weeks to introduce the OCAs.
Currently, the closest OCA to Korea is in Japan. But local network operators claim that even if an OCA were to be set up here, they would have to bear the costs of operating the network connecting the OCA with customers. They said that this method is just a cheaper alternative for Netflix than paying network fees.
Other entertainment giants such as Disney, which will launch its video streaming service here later this month, have opted for a different content delivery network, for which they will pay local ISPs.
SK Broadband has filed a lawsuit demanding that Netflix pay for using its network. The move came after a local court in June dismissed a request by Netflix to confirm that it is not liable to pay for using SK Broadband's network, to which Netflix appealed the following month.
SK Broadband welcomed a remark by Garfield that he was hoping to meet SK Broadband to discuss network innovation. "If Netflix wants to meet us, we are ready to meet," an SK Broadband official said, adding that it was expecting to see Netflix take greater responsibility for boosting the reach of Korean content.
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