The Company Behind the NBN is Thinking About Introducing a ‘Netflix Tax’

You might soon be charged extra to watch Netflix in Australia, if a recent proposal put forward by NBN Co gets the support of internet service providers. The government-owned corporation—responsible for the rollout of the National Broadband Network—floated the idea of charging people extra to use certain online streaming services in its recent Wholesale Pricing Review, asking the top 50 retail service providers (RSPs) whether they would support such a model.

"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?" NBN Co asked. "Would your organisation be likely to productise such a mechanism if developed by NBN?"

This “price response” would essentially amount to a Netflix tax, whereby users would have to pay an additional charge for streaming movies and TV series on the subscription-model platform. That’s annoying for obvious reasons, but it also raises potential concerns around the idea of net neutrality—that is, that all internet access should be treated equally by service providers, and that there should be no additional charges based on the user, content, or platform. NBN Co’s proposed changes could mean that those customers who stream more also pay more—a model that puts low-income individuals at a disadvantage in terms of how much content they can consume, according to Business Insider Australia.

Phillip Britt, managing director of Aussie Broadband, echoed these concerns. "This would discriminate against people according to their usage of the internet," he told iTnews. "It’s not how it works nearly everywhere else in the world, and we don’t believe it should happen here in Australia."

In a statement to iTnews yesterday, NBN Co neither confirmed nor completely dismissed whether a Netflix tax would be rolled out, but rather suggested that they’d be “open” to it if retail service providers thought it was a good idea.

“Our consultation is geared towards internal pricing mechanisms between NBN Co and RSPs [retail service providers],” the company said. “We are not working towards any pre-defined outcomes, and the process is not about levying additional charges on customers. We are undertaking a consultation to ensure our wholesale pricing best supports RSPs… while balancing industry economics… We’ve noted the importance of streaming video in the response… [and] at this stage we are seeking input from industry on whether they believe it is an area that requires attention and, if so, we are open to possible ideas they may wish to suggest.”

NBN Co said they will consider the industry feedback, draft proposals, and “re-engage with the industry and consult further on in detail before finalising and announcing outcomes in November 2019."

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