Netflix files appeal against court ruling over network usage fee in S. Korea

Seoul, July 15 Video streaming giant Netflix on Thursday said it has filed an appeal against a recent Seoul court decision that sided with local Internet service provider (ISP) SK Broadband Co. in a dispute over network usage fees.

Last month, the Seoul Central District Court dismissed a plea from Netflix that the video streaming service operator is not liable to pay network usage fees to SK Broadband.

The court also rejected Netflix's request to confirm that it has no obligation to negotiate with the South Korean company, reports Yonhap.

"There has never been a case globally where a court or a government forced content providers to pay for network fees," the video streaming company said in a statement.

"The decision may topple the global Internet ecosystem developed by content providers and Internet service providers," it added.

The dispute dates back to April last year when the local unit of Netflix filed a lawsuit against SK Broadband after the latter demanded network usage fees from the streaming company, accusing it of free-riding on its network despite being responsible for heavy traffic.

Netflix has insisted that it has no obligation to pay network usage fees as ISPs are responsible for managing their networks and network usage fee demands for specific services violate the principle of net neutrality that prohibits content discrimination.

The video streaming company added in the statement that it had made efforts to negotiate with SK Broadband to no avail. It said it had proposed to SK Broadband to install its content delivery network to reduce Netflix content-related traffic, which the ISP refused and instead demanded network fees.

The latest move deepens the dispute as Netflix's presence has grown rapidly in South Korea, the report said.

Netflix's paid memberships in South Korea reached 3.8 million as of the end of last year and the company has promised to invest US$500 million in original Korean-language content this year.

As of the final quarter of last year, Netflix accounted for 4.8 per cent of South Korea's Internet traffic, second to Google, which took up 25.9 percent, according to ICT ministry data.