ACCC questions consumer need for higher-priced 100Mbps NBN services

Australia’s competition watchdog took the unusual step of questioning whether consumers really needed to pay a premium for 100Mbps NBN services, given the performance characteristics of cheaper 50Mbps plans.

The comments were made in conjunction with the release of new broadband monitoring numbers by the Australian Competition and Consumer Commission (ACCC), which “show, for the first time, how different NBN plans perform in streaming popular video content from Netflix and YouTube.”

The report [pdf] found that for most retail service providers (RSPs), “nearly all NBN50 services would be able to stream from Netflix in high definition, even if two people were watching different programs at the same time.”

“This remained true even during busy hours,” it said, as well as for streams from YouTube.

ACCC chair Rod Sims said the results showed “that higher priced NBN100 services are not generally required to support many households’ consumption of streaming services, and that in most cases an NBN50 service is sufficient.”

He noted that a 100Mbps plan costs around $20 more than a 50Mbps plan.

“These results should prompt consumers to consider whether they actually need to pay extra for a higher-priced plan, or whether a cheaper plan could meet their needs,” Sims said.

Future iterations of the ACCC report will test to what extent streaming needs can be supported by even cheaper NBN plans.

“Slower-speed plans will also provide support for video streaming; we aim to quantify exactly what kind of streaming they will support in future reports to compare alongside NBN50,” today’s report states.

Measuring the usefulness of NBN services by the number of streams they can support is reminiscent of past commentary by the Government around what consumers really need from the NBN.

Having the ACCC talk down the need for 100Mbps services is unlikely to help NBN Co much, given the network builder has recently tried to cut 100Mbps prices to encourage higher uptake.

Prior to the price cuts, NBN Co also tried rebates to get more 100Mbps sign-ups, and even pitched the sale of 100Mbps-plus services to RSPs as a capacity boosting measure at one stage.