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NBN kills 'Netflix tax' idea and unveils basic unlimited plan

Fofo Kwadzovi

Sept. 17, 2019

NBN Co has shot down an idea for a “Netflix tax” for high-volume users of video streaming services, as the company also looks to target people holding out from moving on to the NBN because it is too expensive.
In a proposal put to internet service providers earlier this year, NBN suggested breaking out how streaming video traffic was treated in NBN’s wholesale pricing, with media reports at the time labelling the suggestion as a “Netflix tax” aimed to address the growing demand for streaming video on the NBN.
NBN Co announced on Tuesday the Netflix tax idea had been canned after 12 weeks of consultation. The company’s general manager for consumer, Ken Wallace, told Guardian Australia the feedback on the idea was clear.
“We never proposed as such segments pricing; what we did was identify video streaming as a significant driver of traffic. We needed to make sure we were getting feedback from industry on how they were supporting supplying video services,” he said.
“We flagged some possible ways it could be done to get feedback … and we got a very clear message from industry that it wasn’t something they felt we should be looking at at this time.”
Instead the company proposed plans geared more towards high -volume streaming consumers by introducing a new wholesale 100Mbps packages with a lower upload speed of 20Mbps rather than 40Mbps. The wholesale price proposed is $58 per month, rather than $66 for the 100/40.
There will also be higher-speed tiers for people on the multi-technology mix NBN who are able get those speeds. NBN has proposed a 250Mbps down, 20Mbps up plan for $68 per month, and a 1Gbps down, 50Mbps up plan for $80 per month.
NBN’s focus on driving uptake of the mid-tier 50Mbps plan has been wildly successful, with 64% of users on the NBN now on that level, but there has been concern it has been too focused on driving customers to products they might not need and be paying more for in order to recoup the government’s $51bn investment in the project.
The ACCC chair, Rod Sims, told Guardian Australia this meant a basic product offering had fallen by the wayside , with a focus on getting people to pay more than they do on ADSL today. He said the regulator was considering intervening to force the company to offer better entry-level plans.
“We need to fix that. The way NBN is doing its pricing it has moved away from that,” he said in July .
“If you [the customer] want more, you pay more. You make the call. Once you have the anchor price there it can provide the framework for the subsequent pricing. But you need that 12/1 anchor.”
In response, NBN Co announced a new proposed plan for a 12Mbps bundle with unlimited data. The communications minister, Paul Fletcher, said at a press conference on Tuesday it would allow retailers to offer $60 per month plans with unlimited downloads.
He said it was estimated it could be taken up by up to 500,000 households concerned about the price for internet on the NBN. The $60 pricing point is still almost double some of the download-capped basic ADSL plans on the market from TPG.
NBN Co will take on more feedback from industry until November and will launch most of the new plans in May 2020. As the retailers push to get as many customers moved over to the NBN before the network is completed, the basic unlimited plan could be brought to market in October this year.
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