Naver, Kakao ask Netflix to pay for network usage

Asia's Tech News Daily

Naver, Kakao ask Netflix to pay for network usage

Naver Founder Lee Hae-jin, left, and Kakao Founder Kim Beom-soo speak during a National Assembly audit, Thursday. Yonhap

By Kim Yoo-chul

The founders of Naver and Kakao asked global content streaming service providers to pay internet service providers (ISPs) for the network usage generated by their popular platforms.

“Because we are paying for the bandwidth usage, overseas companies that use more data and network resources should pay (ISPs) an equal amount. Only after this will fair competition follow,” Naver Founder and Chief Investment Officer Lee Hae-jin told lawmakers on the sidelines of his attendance at this year’s annual National Assembly audit, Thursday.

Naver and Kakao have been paying between 70 billion won and 100 billion to ISPs in return for using their bandwidth. Kakao Founder Kim Beom-soo confirmed the country’s top mobile application operator has been paying ISPs within that range, annually.

“Regarding the controversy over Google and Netflix’s ‘free ride’ on using ISPs’ network infrastructure, because this is more about the relationship between service providers and telecom companies, I don’t exactly know a detailed metric, but I want lawmakers to do something to ensure fair competition,” Kakao’s founder, who also appeared before the Assembly with Naver’s founder, told lawmakers.

Korea Communications Commission (KCC) Chairman Han Sang-hyuck responded that he will try to find ways to establish binding legal grounds forcing global content providers such as Netflix to pay ISPs for their bandwidth usage.

Net neutrality is becoming a top issue. Netflix and other content streaming service providers are claiming that their services are more like common consumer services paid by end consumers and that the ISPs are properly compensated by consumers who pay monthly telecom bills.

But the telecom companies’ standpoint is different, as they said the streaming service providers should pay them more as their services result in heavy data traffic over their networks. Netflix had been saying that any hefty payments to ISPs for network usage could discriminate against them.

Earlier, President Moon Jae-in ordered relevant government agencies to explore possible ways to resolve net neutrality-related complications.

On a related note, Naver’s founder said he will introduce more available measures for co-growth with local small- and medium-sized enterprises (SMEs).

“We’ve already been operating programs to help local SMEs and new entrants via various forms of collaboration, but if we have to do more, I will directly review [possible measures],” Lee told lawmakers.

The Naver founder denied the allegation that Naver collected more commissions from local partners using its online platform because of their profit growth. “Regarding that controversy, my answer is Naver didn’t ask local partners to pay more commissions in return for using our online platform because of their profit growth.”

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