Why NBN’s ‘Netflix Tax’ Could Be The Final Nail In Its Coffin

Why NBN’s ‘Netflix Tax’ Could Be The Final Nail In Its Coffin
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Earlier this month, it was revealed NBN Co had started initial talks with ISPs about how they could chuck an extra fee on video streaming, according to Commsday and iTNews. Naturally, all of Australia simultaneously freaked out because video streaming sites like Netflix, Stan and YouTube had become as much of a necessary part of daily life as food or maybe even oxygen.

So, while the conversation around net neutrality has been ongoing in the United States for years, it had finally arrived to Australian shores. But with the 5G rollout picking up speed, it’s likely Australians would just move to this and other alternatives for their streaming needs.

Broken down simply, net neutrality is the idea that all internet traffic should be treated equally, regardless of what page you’re loading. The NBN Co asked ISP retailers whether they would support a “price response” to “charging of streaming video” where it “could be differentiated from the charging of other traffic/services.” An idea that, if implemented, would undermine net neutrality in Australia.

NBN Co’s statement, released after the news broke, offered no real answer as to whether the throttling of video streaming would ever be made a reality.

NBN Co has released an industry-wide Wholesale Pricing Review Consultation Paper, which seeks RSP feedback on balancing industry economics with affordability and choice for customers. As part of this consultation process we’re interested in engaging in a constructive dialogue with Retail Service Providers (RSPs) and the industry about any challenges and opportunities they may face. Video streaming is an important part of using broadband for many customers and a significant proportion of overall internet traffic and future traffic growth, and one of the particular areas where we are seeking feedback.

The focus of the paper is not about levying additional charges on customers, but rather to engage with RSPs and the industry on how we can collectively deliver the best possible service to customers, including for video services.

Ditch The NBN With These Fast Mobile Alternatives

The National Broadband Network has become a bit of a crapshoot - with emphasis on 'crap'. Depending on the technology deployed in your suburb and the type of plan you plump for, you could be getting speeds as low as 20 megabits per second. This clearly isn't good enough.

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While there’s no concrete timeline from NBN Co on when a drastic overhaul of its service could be implemented, if ever, it’s got people like IBISWorld Senior Industry Analyst Liam Harrison contemplating the alternatives and solutions if it ever comes to fruition.

5G is still in its infancy but Harrison believes Australians will simply move over to mobile 5G if the ‘Netflix Tax’ is ever introduced. As he explained in a statement:

“The introduction of a premium service could also accelerate mobile substitution, which is already considered a threat to the NBN model. Although current 5G fixed-wireless offerings are in their infancy, they are already both price and speed competitive with wired internet services from the NBN.

“For the moment, the NBN has some breathing room, as the ACCC’s rejection of the TPG-Vodafone merger has meant that only two major competitors will be in the 5G market in the short-term. Vodafone has appeared to take a slow and steady approach to 5G, most likely due to the uncertainty surrounding the outcome of the merger appeal.”

The Early Adopter's Guide To 5G

You were the first of your friends to migrate from a dumb phone to a smartphone. You were also first to join a 4G plan. You always get the new version of Android before anyone else and buy the latest handset on launch day. You are a tech pioneer - and now, your time has come again. At long last, the wonderful world of 5G is open to consumers. But you will need to tread carefully. As the adage goes, here be dragons!

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With a fully-functioning 5G network still a few years off in Australia, let’s just hope a Netflix Tax never eventuates before it enters our lives. You can also ‘future-proof’ yourself against new fees by committing to a longterm contract.

Here are a few options worth considering: