NBN Co has announced plans to cut wholesale prices on some broadband plans to quell criticism.
NBN Co has announced plans to cut wholesale prices on some broadband plans to quell criticism.

NBN ditches ‘Netflix tax’ proposal

The National Broadband Network has ditched a wildly unpopular proposal to slug consumers with a "Netflix tax" for streaming video, and will instead roll out a series of discounts in an attempt to entice more internet users to make the switch, it revealed today.

The price cuts on both high and low-speed broadband plans could be as much as $100 per month and take effect as soon as November.

But there are conditions attached to the new NBN deals: they offer slower upload speeds and not everyone will be able to access them.

NBN Co revealed its latest proposals to cut prices after discussions in its Wholesale Pricing Review leaked to the press earlier this year.

Chief residential customer officer Brad Whitcomb said the company intended to introduce three new high-speed plans with lower prices and slower upload speeds to make the NBN more attractive to demanding internet users.

NBN Co chief executive Stephen Rue is overseeing the $51 billion infrastructure project. Picture: Aaron Francis/The Australian
NBN Co chief executive Stephen Rue is overseeing the $51 billion infrastructure project. Picture: Aaron Francis/The Australian

"As the industry matures, overseas we are seeing evidence there is an appetite for those higher speed tiers," Mr Whitcomb told News Corp Australia.

"For our market in Australia we would expect to see that as well."

The new wholesale broadband plans will feature packages offering 100 megabits per second, 250mbps, and 1000mbps but all will feature significantly slower uploads speeds than previously offered.

The 1000mbps plan, for example, will only feature 50mbps uploads rather than 400mbps, but it will be priced at $100 less than before.

Only households with fibre-to-the-premises or HFC connections to the NBN will be able to use the new plans.

NBN Co also revealed proposals to cut the wholesale price of its 25mbps and 12mbps packages.

The price discounts will replace a widely criticised proposal to charge NBN users extra fees to stream video from services such as Netflix, Foxtel Now, and Stan.

Mr Whitcomb confirmed the company did raise the idea of charging users more to access video-on-demand in discussions but it was shot down by providers.

Only NBN households using FTTP or HFC will be able to access the new top speed NBN plans. Picture: Lawrence Machado
Only NBN households using FTTP or HFC will be able to access the new top speed NBN plans. Picture: Lawrence Machado

"We did recognise that video traffic is one of the so-called killer apps that is driving a lot of traffic across the network so we wanted to explore with the industry if there were alternative models that they were interested in," he said.

"What ultimately came back (was a demand) to keep it simple."

He said NBN Co would brief internet service providers on its planned pricing changes later today, with the results of consultation due in November.

But independent telecommunications analyst Paul Budde said the minor discounts would do little to improve broadband services delivered by the NBN.

"The changes are a Band-Aid," he said.

"None of it is really addressing the issues. It's not really going to make a huge difference."

Mr Budde said NBN Co still had yet to reveal a plan to upgrade its mixed technology network after the June 2020 deadline, and criticised the reduction in upload speeds and talk of slowing video streams.

"It's ridiculous that we, as a country, are coming up with all sorts of twists to undermine high-speed broadband access, be it by separating video streaming or reducing the upload experience," he said.

"It indicates the NBN are unwilling to do something structural."



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