Aussies could get slugged with a 'Netflix tax' under controversial NBN Co proposal

Netflix Australia
Image Credit: Netflix
(Image credit: Netflix)

NBN Co has put forward a proposal to its top 50 retail service provider (RSP) partners, asking them what they think of charging a different amount for the data used by streaming video compared with other traffic and services.

First reported by telecom industry publication CommsDay, NBN Co is essentially testing the waters to see if companies that sell the NBN to customers – such as Telstra, TPG and Optus – would support and enforce higher rates for users that watch Netflix, Stan and other streaming services.

On June 20, NBN Co sent its Wholesale Pricing Review to the aforementioned 50 RSPs, seeking industry feedback on the service’s pricing structure thus far and how it can be amended in the future.

Included in the pricing review is the following question: “Would your organisation support the development of a price response whereby charging of streaming video could be differentiated from the charging of other traffic/services? Would your organisation be likely to productise such a mechanism if developed by NBN?”

Consequences

According to market research company Roy Morgan, over 11.2 million Australians had Netflix subscriptions as of February 2019, a 25% increase over the previous year’s figures.

Considering that almost half of all Australian residents have a Netflix subscription alone, and this exists alongside a plethora of other video streaming options (including YouTube), it’s safe to assume that raising the cost of accessing these services would be unpopular with the public.

Similarly, considering that it’s typically left up to the RSP to decide on traffic shaping and prioritisation, it’s unlikely that these companies will be willing to lose that degree of control.

The final and potentially most alarming consideration is that of privacy. NBN Co, as a contracted company intended on providing infrastructure, should theoretically not have any deeper insight into specific users and their usage.

It’s unclear at this stage what exactly the pricing changes would be if they were to be put in place – and would likely be up to individual RSPs – and there’s also plenty of opportunities for opposition before it gets finalised, including from the RSPs themselves and consumer-rights organisations like the ACCC.