S.Korea broadband firm sues Netflix after traffic surge from 'Squid Game'

Comcast is at $18b in operating profit, with roughly 18% operating income margins. Charter Communications is at $9.6b in operating income, with 19% operating income margins. Those are the two biggest cable companies in the US.

In the early decades of cable, profitability was notoriously flaky for the industry. Enormous amounts of required capital investment, and it took a long time to saturate - scale into - the US market. Now the market is settled and they're printing consistently giant profits.

Interestingly Charter has become a giant, worth $133 billion, and Paul Allen used to own a controlling interest in the early incarnation of it. It was part of his so called wired world collection of investments.

https://www.seattletimes.com/business/economy/paul-allen-cha...

What's happening here is simple: Netflix is so popular that an ISP dare not block their content. Really, put simply: Netflix costs money to deliver, yes, but it is an expectation of ISP customers that they have access to Netflix. If an ISP were to block/charge more for access to Netflix (assuming that's even legal, but let's just say it is), customers would move to another ISP. Outside of cases where moving to another would be impossible[0], that should be the end of it.

It's interesting to me that the article focuses entirely on the courts getting involved. What's happened is that a business made assumptions about cost (that "unlimited" would mostly be users surfing lower-bandwidth web sites, not delivering video) and the market (all of their competitors likely land somewhere near eachothers' pricing) and discovered that those assumptions were wrong. Instead of either accepting that they are not a commodity that will always chase the lowest price and operating accordingly, they've gone to the courts to have the government require Netflix to reward them for their mistakes.

This idea that as an ISP customer, you "paid for unlimited service at a certain rate" but "don't you dare actually use that unlimited service" is absurd. Watching Netflix, even the vast majority of the day/night, isn't a matter of abuse -- akin to bringing a sleeping bag and living at a 24-hour gym that you have a membership to -- it is what most ISPs are advertising as a reason to subscribe to them. They know they can't turn around and tell their customers (that have choices in service providers) that they're going to charge them for access to something that is central to that service, so they go after Netflix. What if Netflix refuses to pay and just leaves the S. Korean market or decides to say "screw it" and shut the business down (ala Atlas Shrugged)? Would that make S. Korean ISPs service more valuable?

[0] In these cases, they're a monopoly to those customers and should be regulated accordingly; preferably in a manner that brings in an ISP that can handle Netflix traffic without the charges.

So if you want to be more accurate, the proposed payments won't be like a tax on truckers (in this analogy the truckers are the users, or maybe ISPs), rather it'll be a tax on supermarkets and shops that are getting the goods.

Your guess is indeed correct! Two out of three major ISPs in South Korea operate their own OTT services (Wavve and Seezn). LG U+ is an exception and also the first major ISP to join the Open Connect Appliance program for the obvious reason.