Squid Game reignites battle on who pays for the internet

By Matthew Field October 26, 2021 â€" 5.38pm

In the South Korean Netflix hit Squid Game, 456 heavily indebted characters are plunged into murderous children’s games for a chance to win £28 million ($51.5 million). The likes of “grandma’s footsteps” and tug of war are turned gory as contestants try to survive long enough to claim a share of the prize.

Its viral success has prompted an escalation of a not quite so life-or-death, but decades-long dispute between telecoms giants and big tech over net neutrality. Almost as old as the internet itself, net neutrality is the concept that internet providers should give equal access to all content, regardless of the product or website.

The Squid Game’s viral success has prompted an escalation of a decades-long dispute between telecoms giants and big tech over net neutrality.

Essentially, the question is: who pays for the internet? Broadband providers cannot charge Netflix more, simply because the 142 million people streaming Squid Game are hogging all the bandwidth. But that could be about to change. South Korean network provider SK Broadband sued Netflix earlier this month, demanding it cough up for delivering Squid Game - the court ordered the parties to agree on a payment, although Netflix is appealing.

In the US, net neutrality has been a hot political issue. Hundreds of millions in lobbying fees crossed both sides of the debate as tech and telecoms firms waged war, while internet activists took to the streets to protest, defending the web.

And in the UK, current rules face a potential shake-up. As revealed by The Sunday Telegraph in March, Ofcom is reviewing whether regulations should change amid pressure from telecoms companies, to force tech giants to contribute to the tens of billions being spent on broadband upgrades. A call for evidence will close in November. The review is still in its information gathering stage and no decisions have been made.

The dispute has heated up, largely spearheaded by Marc Allera, chief executive of EE, who said in March: “We ask ourselves: are current net neutrality laws fit for purpose?” EE argues that, at times, 80 per cent of internet traffic is being driven by just four big tech firms.

“You can understand the motivation [from telecoms companies],” says Paul Bernal, a professor of IT law at the University of East Anglia. “They think: ‘hang on, Netflix is making billions out of our infrastructure. It should pay its way.’,”

But the logic behind their demands falls flat, he says. When a hit like Squid Game or the next Call of Duty is launched, people buy a better broadband package, boosting revenues for telecoms firms. Forcing Netflix to pay more is like getting paid twice for providing the same service.

Still, these network operators believe there are tweaks to net neutrality that regulators may be open to. Ofcom has said it would examine the impact of net neutrality on investment, on new technology such as 5G and gaming, and on zero rating - the process of giving away some services for free.

The last area is one that demands more clarity. During the pandemic, mobile networks were under pressure to “zero rate” education websites as students were forced to study from home, despite it not generally being permitted under net neutrality rules. The UK did it anyway, on a de facto basis with websites such as the NHS, and Ofcom did not intervene.

In fact, the regulator has always been quite light on “zero rating”, allowing several operators to offer social media apps free traffic that doesn’t count towards users’ data allowance.

But telecoms are likely to push for further change. “They want more freedom to have a more commercial relationship with content providers,” says Matthew Howett, founder of consultancy Assembly Research.

That could, he says, see “operators striking deals with games makers to prioritise a particular update or traffic”.

Broadband insiders say gaming giants should be required to work with networks when they are planning to deliver huge software updates, so these can be managed efficiently - for example, so the next Call of Duty download doesn’t clash with an England match.

But tech companies are suspicious, especially after bruising battles in the US. They fear any watering down of net neutrality could cause networks to slow down their services unfairly.

And streaming companies argue they already invest heavily in technology that stops their traffic overwhelming mobile and broadband networks. “Netflix invests millions in content delivery networks to get its traffic to you,” says Howett.

The real overriding problem, critics say, is that networks have not invested enough in fibre and 5G until now, meaning bottlenecks will continue until the infrastructure catches up with our increasingly online world.

After years of trying, UK telecoms have finally got net neutrality back on the agenda, made known by Squid Game. For them to push through even a few tweaks would be toasted as a win.

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