Since the beginning of the coronavirus disease (COVID-19), people have undeniably spent more time online. As a result, the amount of online traffic has increased. In turn, this has caused the Ministry of Science and Information, Communication, and Technology (ICT) to enforce the revised Telecommunications Business Act, also known as the Netflix law. This new law has triggered a heated dispute between content providers (CP), telecommunication service providers (TSP), and internet service providers (ISP). While some say that the Netflix law is necessary, others argue that it will only increase the financial burden on CPs and consumers.

The Netflix law, passed on December 10, 2020 by South Korea’s National Assembly, holds CPs and TSPs responsible for the internet service quality. The Netflix law is applied to companies that average one million daily users and attract more than one percent of Korea’s internet traffic. This decree is not only applied to foreign CPs such as Google, Netflix, and Facebook, but also Korean companies like Naver and Kakao. However, Naver and Kakao only account for 2.5 and 1.8 percent of online traffic respectively, while Google accounts for 25.8 percent. This discrepancy attracted strong criticism from Korean ISPs because they do not account for a comparatively large amount of online traffic, yet encumber ISPs by being included in the scope of the law.

Under the Netflix law, CPs are held responsible for internet service and its stability, so that people can view content under a stable connection. These CPs are also required to consult with TSPs when traffic occurs, and to discuss with ISPs the time when they expect traffic to be high. While these requirements may seem reasonable, the Netflix law is unnecessary and should be revised as it is only causing a burden to CPs as well as consumers.

Moreover, CPs should not be responsible for quality of the internet connection. There have been cases where CPs have sued ISPs, arguing that CPs should not be responsible for online traffic. On April 14, 2020, Netflix Korea sued SK Broadband for apprizing Netflix for the use of its network and requesting Netflix to contribute to the cost of network expansion caused by its popularity. However, Netflix strongly opposed to the claim and argued that the maintenance and management of networks was not their responsibility. As a result, SK Broadband said they will review the lawsuit and Netflix will not pay more for ISPs.

Usually, TSPs are responsible for the network quality, and giving that responsibility to CPs is highly unusual. CPs are demanding the decree to be revised once again, as, according to The Korea Internet Companies Association, it has many problems such as “going beyond the scope of the act and a possible violation of the basic rights” to have to pay more for free entertainment. These CPs are already paying exorbitant costs each year to maintain a stable network; demanding more money from CPs will only cause a greater burden. According to past judicial decisions, Netflix laws impose responsibilities that CPs cannot manage and control. In the case of Kakao and Naver, they have paid nearly 100 billion won a year to mobile carriers in 2016.

With Disney Plus announcing its domestic launch in 2021, the level of domestic traffic is expected to surge in 2021 for overseas CPs. Therefore, the controversy over the Netflix law will continue. This is why the Netflix law has to be revised once again, so it can benefit CPs, ISPs, TSPs, and consumers. If it is not revised, consumers in South Korea will eventually end up paying twice as much money compared to the original price to view content.