Squid Game’s success opens up the debate about who should pay for the increase in internet traffic | Telecommunications industry
TThe groundbreaking success of the Korean drama Squid Game prompted a local broadband operator to take legal action to force maker Netflix to Help pay for the huge increase in traffic, the latest focal point in the dispute over who should bear the burden of rising data costs fueled by the worldwide streaming boom.
From the latest global sensation from Netflix and the live streams of Premier League soccer games on Amazon Prime Video to the high-bandwidth traffic when online games like Fortnite or Call of Duty are updated, the demand for internet capacity has grown unprecedented in recent years.
The pandemic fueled that trend: lockdown boredom and home work helped fuel the busiest days of internet traffic ever recorded in UK history, with internet usage doubling in the last year.
“Every terabyte of data consumed beyond current levels costs about £ 50 million,” said Marc Allera, general manager of BT’s consumer division. “In the last year alone, we’ve seen an additional four terabytes of usage, and the cost of keeping up with that growth is enormous.”
The overwhelming majority of daily usage, up to 80%, comes from just a handful of companies like YouTube, Facebook, Netflix, and game company Activision Blizzard.
Allera says the rules that keep companies like BT from passing some of the costs on to the biggest drivers of capacity growth – net neutrality rules that mandate that all internet traffic be treated equally – are out of date for the streaming age.
“A lot of the principles of net neutrality are incredibly valuable, we’re not trying to stop or marginalize players, but there needs to be more effective coordination of demand than there is today,” he says. “When the rules were created 25 years ago, nobody could have imagined that four or five companies would control 80% of the world’s internet traffic. They do not contribute to the services they provide; that doesn’t feel right. “
Last month, the UK telecommunications regulator Ofcom a review of the net neutrality rules started in the face of the changing internet landscape, even though any change in policy is ultimately the responsibility of the government.
Proponents of net neutrality fear that any change in their rationale could result in ISPs ultimately choosing to block or limit the speed of some services and speeding up others that pay a fee, which in turn impacts the consumer experience.
“We firmly believe in a free and open Internet,” says Jon Lloyd, campaign director for the Mozilla Foundation. “All content must be treated equally, that is the principle of net neutrality. We have never asked content creators to pay ISPs before, and we shouldn’t. ”The Open Rights Group argues that tampering with net neutrality in the UK could open the door to the Internet potentially“ into a fast track and one slow track ”is split.
However, in the US, Netflix and others have been paying Internet Service Provider (ISP) fees for years to ensure faster streaming speeds, while Amazon and Facebook have been doing so in Korea. “We have not seen the widespread blocking or throttling of data traffic that we feared,” says Matthew Howett, founder of the telecommunications consultancy Assembly.
Streaming companies argue that they are actually paying to have their content delivered through technical systems that drastically reduce costs for ISPs. Netflix has a worldwide network of its own servers that deliver a Squid game or Bridgerton to the Internet doorstep for ISPs, shortening the distance of data to consumers, with the streaming giant paying billions in “transit fees”. Disney has another system in partnership with a technology company called Qwilt, though ISPs also receive fees from its model.
“Lately, we have noticed that governments and ISPs are increasingly looking for financial support from content providers, arguing that they should receive fees to support the delivery of broadband and 5G,” said a streaming industry manager. “We believe this leads to a violation of the principles of net neutrality, as consumers who purchase an Internet service from an ISP should be able to reach every endpoint on the Internet, whether that content provider pays or pays not.”
Telecommunications and broadband providers argue that the measures taken during the pandemic demonstrated the need to reconsider net neutrality. When the schools closed, the operators switched to free educational websites.
“There’s a stress test of the rules,” Howett says. “The challenge isn’t new, it’s about increasing margins and profitability for investors, and they see revenue opportunities from these big content providers.”
Motivations aside, the boom in data usage and the need to manage and pay for capacity will continue at breakneck speed. In 2011, the average household was using 17 GB of data over the Internet each month, according to the Communications Chambers advisory group. Last year, that number averaged 429 GB. In November, Disney said it expected the “dizzying” demand for video content to increase tenfold over the next two years.
“The only contribution consumers make is what they pay, or we, the networks, does that feel fair?” Allera says. “There are other business models that would only require a few adjustments to net neutrality. We are only talking about the biggest players who drive the most content and data consumption; the principles must be further developed. “