- NBN Co is considering a special tax to be added to streaming services such as Netflix, according to multiple reports.
- The company posed the question to its 50 retail service providers, asking if they would support the additional charge.
- The proposed move could cause outrage among users as they currently don’t have to pay extra for streaming.
NBN Co is reportedly tossing up whether to charge its users extra for using Netflix and other streaming services.
As reported by Commsday and ITNews, NBN Co, the Australian government-backed broadband provider, proposed the idea in its wholesale pricing review. In the review, the top 50 retail service providers (RSPs) for feedback were asked if they would support charging a different price for the streaming of video compared to other services.
RSPs are the link between wholesalers, such as the NBN Co, and the customer — think Telstra or Optus — that provide individual services or bundles.
According to ITNews, NBN Co asked its RSPs: “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?”
The question was asked in NBN’s Wholesale Pricing Review Consultation Paper, which aimed to get under-represented groups such as low income earners and older Australians to use the NBN.
The proposed tax is likely to create anger among NBN users as streaming is already provided to them at no additional charge and it raises concerns about net neutrality, the internet principle that all internet access should be treated equal. If the proposed charges come into effect, it could mean customers would have to pay more depending on how much they stream online and that puts low-income individuals at a disadvantage.
It also raises the question about how much NBN Co should know about the content that goes through its network.
“NBN is a Layer 2 network — a simple pipe between customer and ISP — and should never be looking deeper into the packets to see or care what form of content is being passed through,” Internet Australia chair Paul Brooks said, according to ITNews.
NBN’s announcement comes after Australia’s Communications Minister Paul Fletcher suggested a new tax could be levied against Netflix as taxation from traditional media platforms is in decline.
“The more you can have companies that are in the same market subject to broadly the same set of regulatory requirements and obligations the better,” Fletcher said in the interview The Australian.
An NBN Co spokesperson told ITNews, “We are engaging with the industry in a confidential consultation process and will not be commenting.”
Business Insider Australia has reached out to NBN and industry experts for comment.
UPDATE 3/7/2019, 2.30PM: NBN Co released this statement to Business Insider Australia:
“NBN Co is building the nbn network to meet the needs of Australians today as well as delivering capacity upgrades to meet growing data demands into the future, which includes the provision of additional capacity within the network to accommodate the rise of streaming services.
“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. Our consultation is geared towards internal pricing mechanisms between NBN Co and RSPs. 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 and their services to customers, while balancing industry economics.
“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.
“We’ve noted the importance of streaming video in the response, which is why we are focused on seeking specific comments from RSPs in this area. 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.
“The next stage of the consultation will include draft proposals from NBN Co after considering industry feedback, and we will then re-engage with the industry and consult further on in detail before finalising and announcing outcomes in November 2019.”