K-drama hit reveals net-neutrality flaw

Bandwidth in New Zealand, and around the world, is disproportionately dominated by a handful of companies – Netflix, YouTube, Amazon, Apple, and Facebook.

And last week, the success of Netflix’s Korean-made hit show Squid Game led to South Korean internet service provider SK Broadband suing Netflix to pay the costs for the increased demand the show put on its network.

A Seoul court agrees with SK

Broadband, saying Netflix should ‘‘reasonably’’ give something in return.

Squid Game’s popularity in South Korea – reported to be 24 times greater than usual – made Netflix the country’s second-largest data traffic generator, with only YouTube ahead of it.

Netflix and YouTube do not currently pay network usage fees in South Korea. However, rival content providers – such as Amazon, Apple and Facebook – do.

SK Broadband estimated the network usage fee Netflix needed to pay was about 27.2 billion won (NZ$32.8 million) last year alone – and that’s before Squid Game landed on Netflix.

The question I’ve been wrestling with this week is whether it’s reasonable to ask Netflix, YouTube, Amazon and company to pay for the bandwidth they so obviously dominate. Cold maths suggests they should. The politics of net neutrality is far from cold, though.

For example, my website, theBit.nz, is in a totally different league – it gets 75,000 page views a month, and each page is 1.14MB dripping wet. So, would it be fair to ask me to pay-to-play on New Zealand’s dumb pipes?

I’d argue that it’s very unfair. So where should that line be?

Even Stuff – New Zealand’s most popular news website – is still in the minor leagues regarding bandwidth. Stuff.co.nz averages roughly 5 million page views a day. Each page is roughly 25MB according to GTMetrix (note that I am taking the worst-case scenario here and using desktop page sizes).

This means (by my shoddy maths) that Stuff’s theoretical demand on the network could be as high as 125,000GB a day – or 0.125 petabytes – though the reality will be less than that because of the high percentage of mobile page views (which are lighter) and proper caching technologies.

Should Stuff pay Chorus for the ability to serve free news to Kiwis? Of course not.

So how can we keep our network – which we all pay our internet service providers (ISPs) hundreds, often thousands, of dollars for each month – from collapsing under the pressure caused by a handful of companies?

It’s not unreasonable to suggest there’s merit in forcing these embarrassingly rich companies to contribute in some way, as this is not an issue that’s not going away.

The problem with this approach is that it goes against the idea of what the internet is all about. And I think supporters of net neutrality are right when they say innovation shouldn’t be limited to those who can afford it.

If it was a pay-to-play environment, it’s likely that YouTube and Netflix would not have been able to cover the bandwidth fees they racked up in the early days.

Well-intended ideas only go so far, though. A recent article from The Guardian on the subject suggested that the United Kingdom is paying a high price to keep up with demand. ‘‘Every Tbps [terabit per second] of data consumed over and above current levels costs about £50 million [NZ$100m],’’ says Marc Allera, the chief executive of BT’s consumer division.

And ‘‘in the last year alone we’ve seen 4Tbps of extra usage, and the cost to keep up with that growth is huge’’.

New Zealand’s bandwidth pressures aren’t as severe. Yet.

During the 2019 Rugby World Cup, Chorus reported that New

Zealand had a throughput ceiling of 3.5Tbps and the closest we got to this (back then) was 2.6Tbps.

It didn’t take us long to exceed that limit, though. On August 18 this year – the day the country went into level 4 lockdown – we hit a new record peak throughput of 3.6Tbps. Thankfully, our new throughput ceiling is now at least 4.5Tbps. So what’s the answer?

In the United States, net neutrality laws were passed that gave power to ISPs to block or throttle content as they see fit.

The UK’s telecommunications regulator, Ofcom, has also started collecting evidence on the subject to see if it needs to copy the lead of the US. Any rule changes would be a matter for the UK Government.

Here in New Zealand, there doesn’t seem to be any suggestion that we’re about to start asking Netflix, Google/YouTube, Amazon, Apple or Facebook to pay for the bandwidth they so clearly dominate. But I think it’s time we started having the conversation, at least.