S.Korea broadband firm sues Netflix after traffic surge

Jared Brown nanog-isp at mail.com
Tue Oct 12 16:04:31 UTC 2021

Doug Barton wrote:
> One incentive I haven't seen anyone mention is that ISPs don't want to 
> charge customers what it really costs to provide them access. 
  For the sake of argument, let's assume this is true.

  For this to work, I am really trying hard to ignore inconvenient facts like:

  "South Korea’s SK Telecom (SKT) has reported operating revenues of 
   KRW4.818 trillion (USD4.2 billion) for the quarter ended 30 June 2021,
   up 4.7% year-on-year, with it saying that the increase was ‘due to 
   continued solid growth trends in all business areas’.

   SKT’s operating income in Q2 2021 totalled KRW397 billion, up 10.8% on
   an annualised basis..."

  Nevertheless, let's go with the hypothesis that service is provided below cost.

  Providing access is mostly fixed costs, as there are very few consumables in running a network.

  IP transit costs aren't an issue, since Netflix will do settlement free peering.

  This leaves the internal network of SK Telecom as the problem and cost center.

  There would have been no marginal cost if SK Telecom's own network was capable of handling the traffic 
  of its customers.

  So basically SK Telecom is mad at Netflix for forcing equipment upgrades faster than budgeted.

  Should Netflix have to pay for SK Telecom sucking at traffic planning and budgeting?

- Jared

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