No ‘Netflix tax’ on way: NBN Co floats new high-speed plan and discounts SMH
The National Broadband Network has ruled out a “Netflix tax” in favour of drastic wholesale discounts and a new 1Gbps speed plan amid pressure from major reseller Telstra to cut its prices.
A pricing consultation paper released by the $51 billion NBN Co on Tuesday proposes three new plans, including a 250Mbps and a 1Gbps option, but did not suggest changing the prices for Australians using their broadband for video streaming after intense industry criticism.
The NBN Co has proposed a wide range of discounts across its wholesale plans.CREDIT:LOUIE DOUVIS
The NBN Co raised the possibility of changing the price for those who use data to stream video in a June consultation paper but faced a backlash from the public over the idea of a “Netflix tax” that threatened net neutrality rules, where all types of content are treated the same by telcos. The NBN Co has denied it was angling for a “tax” on streaming, arguing it was considering a range of possible pricing options.
Regardless, NBN Co chief customer officer Brad Whitcomb has now ruled out any video streaming-focused changes, saying there are “no plans” on this front anymore.
The pricing consultation paper said that only two broadband providers supported the initiative, as part of a possibility “of lowering the price of video traffic” by charging different prices.
The new changes come amid intense pressure from major reseller Telstra, whose chief executive Andy Penn has repeatedly criticised the wholesale charges as being too high for his business to make a profit.
A Telstra spokesman said: “We appreciate NBN Co is faced with financial constraints, however we continue to believe additional changes to wholesale pricing are urgently needed.”
NBN Co has now introduced significant discounts across the board as well as new plans. This includes a 250Mbps plan which has 25Mbps upload at a wholesale price of $68 a month and a 1Gbps plan priced at $80 a month with 50Mbps upload.
The highest speed plans will be available to customers on pay-TV cable connections known as HFC and fibre to the premises, and those who are upgraded to fibre to the curb and Gfast technologies.
While it is up to telcos whether to sell these options and whether they pass savings onto customers, Mr Whitcomb expects the different plans will be available by mid next year.
Communications Minister Paul Fletcher said the lower wholesale prices would ease pressure on retailers’ margins and encourage consumers onto the NBN who may currently see little value in its services.
Mr Fletcher said there weren’t many retailers providing an entry-level plan with unlimited data partly because it was “very difficult” for them to make money with the current wholesale prices.
He said the new prices would make it “more feasible for retail service providers to offer that 12Mbps product at a $60 per month price point in a way that lets them generate more profitability than has been the case to date”.
It is estimated there are 500,000 budget-conscious households opting not to sign up to the NBN.
When the NBN Co reduced the pricing of the 50Mbps plan and telcos subsequently passed along the discounts to customers in early-2018, including automatically upgrading thousands of homes onto the faster plan up from 25Mbps, there was a dramatic shift in the proportion of households picking higher speed options.
Another change in the new consultation is the introduction of a new entry-level plan of 12Mbps with 1Mbps upload for $22.50. One of the taxpayer-funded network’s major focuses in the most recent pricing consultations has been how to encourage price-sensitive lower-income households, renters and older people to connect. The 25Mbps plan is also expected to be reduced in price.
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