Why NBN's 'Netflix Tax' Could Be The Final Nail In Its Coffin

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Earlier this month, it was revealed NBN Co had started initial talks with ISPs about how they could chuck an extra fee on video streaming, according to Commsday and iTNews. Naturally, all of Australia simultaneously freaked out because video streaming sites like Netflix, Stan and YouTube have become as much of a necessary part of daily life as food or maybe even oxygen.

So, while the conversation around net neutrality has been ongoing in the United States for years, it had finally arrived to Australian shores. But with the 5G rollout picking up speed, it's likely Australians would just move to this and other alternatives for their streaming needs.

The Internet Reacts To NBN Co's 'Netflix Tax'

If you ask any Australian in the country how reliable and fast their internet is, their answer would most probably fall in the "shit" to "abysmal" range. And if you asked them online, expect to wait awhile.

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Broken down simply, net neutrality is the idea that all internet traffic should be treated equally, regardless of what page you're loading. The NBN Co asked ISP retailers whether they would support a "price response" to "charging of streaming video" where it "could be differentiated from the charging of other traffic/services." An idea that, if implemented, would undermine net neutrality in Australia.

NBN Co's statement, released after the news broke, offered no real answer as to whether the throttling of video streaming would ever be made a reality.

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. 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.

The focus of the paper is not about levying additional charges on customers, but rather to engage with RSPs and the industry on how we can collectively deliver the best possible service to customers, including for video services.

Ditch The NBN With These Fast Mobile Alternatives

The National Broadband Network has become a bit of a crapshoot - with emphasis on 'crap'. Depending on the technology deployed in your suburb and the type of plan you plump for, you could be getting speeds as low as 20 megabits per second. This clearly isn't good enough.

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While there's no concrete timeline from NBN Co on when a drastic overhaul of its service could be implemented, if ever, it's got people like IBISWorld Senior Industry Analyst Liam Harrison contemplating the alternatives and solutions if it ever comes to fruition.

5G is still in its infancy but Harrison believes Australians will simply move over to mobile 5G if the 'Netflix Tax' is ever introduced. As he explained in a statement:

"The introduction of a premium service could also accelerate mobile substitution, which is already considered a threat to the NBN model. Although current 5G fixed-wireless offerings are in their infancy, they are already both price and speed competitive with wired internet services from the NBN.

"For the moment, the NBN has some breathing room, as the ACCC's rejection of the TPG-Vodafone merger has meant that only two major competitors will be in the 5G market in the short-term. Vodafone has appeared to take a slow and steady approach to 5G, most likely due to the uncertainty surrounding the outcome of the merger appeal."

The Early Adopter's Guide To 5G

You were the first of your friends to migrate from a dumb phone to a smartphone. You were also first to join a 4G plan. You always get the new version of Android before anyone else and buy the latest handset on launch day. You are a tech pioneer - and now, your time has come again. At long last, the wonderful world of 5G is open to consumers. But you will need to tread carefully. As the adage goes, here be dragons!

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With a fully-functioning 5G network still a few years off in Australia, let's just hope a Netflix Tax never eventuates before it enters our lives. You can also 'future-proof' yourself against new fees by committing to a longterm contract.

Here are a few options worth considering:


Comments

    It still makes me actually angry that nbn could have positioned Australia in prime position for emerging digital technology and commerce, but instead the politicians got their hands on it and turned it into an embarrassing money pit.
    I bet nbn are praying 5G data quotas don't hit sensible prices any time soon. I imagine they'll be lobbying quite hard to try and see off 5G.

    What speeds can we reasonably expect from 5G in a few years when every man and his dog is using it?

      More than the average NBN connection

        Nope.

        You put everyone's home connection on 5g you will get speeds akin to dial-up.

        Light spectrum > Radio Spectrum.

          Do please give your factual evidence showing how 5G is better than optical fibre @phil

          We all await it.

            Nope. It isn't. But as most people aren't getting fibre that doesn't matter. In a lot of use cases 5G will be better than acceptable, it'll be preferable. I service many, many businesses and users for whom 4G is their primary connection. That's how the real world works.
            I'd have thought that would be obvious.

              5G is not a viable replacement for an optical fibre network as a country's internet backbone.

              Do you want to know why it works for those people? Because not many people are on it.

              5G will only remain as an alternative option for the very few use cases. Not as a replacement for optical fibre.

              Please do continue going through all my old comments to downvote them. It's quite funny that ive made you that butthurt.

                You're right. 5g isn't a viable replacement for backbone or optical fibre. But we're talking about domestic connections. Which you know already.
                Butt hurt? Nah, I'm in the pub so all's well.

              Most of my state is fibre so it does matter.

      Speeds akin to dial up.

      The radio spectrum cannot sustain the bandwidth required for the home internet connections of Australia.

      Not only would you have speeds akin to dial up. You would need Mobile towers every couple of streets to be able provide proper coverage.

      Our current system can sustain All our phones. It cant sustain home internet connections on top of it.

    How in hell did we get to the point where the troglodytes running the NBN are considering breaking net neutrality? Plus, I still want to know just how dangerous the 5G network will be to our health. For the uninitiated, we will have a powerful millimetre wave transmitter right next to everyone, everywhere.

      We voted LNP is how we got to this point.
      ...Multiple times, learning nothing, every time. Because it's important for all this kind of stuff to run second to persecuting brown and poor people and protecting the wealthy and mining jobs.

        We voted LNP is how we got to this pointSpeak for yourself, I've never voted LNP and never will. I do agree with the sentiment though.

          'We' as a nation. The majority did. Those of us who didn't are a minority.

            ^^These guys acting like political two party preference matters atm. Neither party stood for anything thats why we have LNP, they just keep slinging mud in a vote for the least worst candidate competition. If we want action political heads need to start rolling.

            Not by much considering how close the last few elections have been.

      5G is non ionising so now real health dangers. You a bathed everyday in background radiation from banana's, your partner, the earth, the buildings you are in, the sun and all the radioactive shit spewed into the atmosphere by burning coal.

      Even if 5G was bad for you, it'd be so low on the list as to be trivial.

    While 5g may have the theoretical speed to rival the nbn I doubt it will ever be able to take much more then the current 20-30% of internet traffic that mobile internet does now. That is unless they don't double or triple the amount of towers.
    If the nbn did ever actually try and break net neutrality I am certain they would get so much heat they would have to back down too.

    The final nail in the coffin was when they chose FTTN and Copper cables over FTTP.

      I agree with you. I've got FTTN and then HFC and it is extremely unreliable. I need the Internet for my job and I primarily work from home, but these days it is so sketchy that I'd rather tether my phone on 4G than use the home Internet connection.

        that's interesting, we have FTTN and were one of the first adopters in our area. We do use Telstra as our RSP because I did not want to have to deal with multiple people to get issues resolved. When we first connected we were having issues with connections dropping out, I suspect because we are close to the Canning river and the ground water here is reasonably salty. NBN came in and re-ran the copper cable from the Node and since then we have been relatively fault free. I have an unlimited plan and we have 2 fairly hardcore gamers, who will stream youtube videos at the same time as they are playing online, along with multiple Netflix services on TVs through out the house and 4 mobile phones, tablets and laptops. We have to reset the modem maybe once a month? And usually because it has lost connection.
        Mind you, we did offload the wifi to another internet router which is just used as an AP rather than rely on the shitty Telstra modem for wifi.

    I was looking at 5G as a potential alternative to NBN and an IT person told me it's a poor choice for home or business because the signal has significant problems penetrating the walls of buildings, which obviously gets worse the deeper you go in any building. Anyone else hear this?

    Surely sending your traffic over a secure VPN connection would be enough to get around this. You might get a slight drop in speed for the overhead of the VPN, but it is better than what they are planning.

    Via NBN I am streaming Freeview TV to my TV. I wonder how much bandwidth it is taking of my total of 50Mbps line.

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