NBN Co to offer a month of bandwidth relief to internet providers

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NBN Co to offer a month of bandwidth relief to internet providers

At a total cost of $5.2 million.

NBN Co will offer internet providers some "relief" on extra bandwidth costs they may be incurring due to lockdowns, but won’t resurrect a bandwidth bonus scheme that ran for much of last year.

The company had been under pressure to act after the top five retail service providers, representing 96 percent of users, wrote to the government seeking intervention.

The RSPs - TPG Telecom, Telstra, Optus, Aussie Broadband and Vocus - said they had seen a “material increase in peak NBN usage” since lockdowns in some states resumed, and were therefore incurring extra costs.

They were unsuccessful in seeking assistance from NBN Co directly and escalated the issue to the communications minister.

NBN Co said today it would put up a total of $5.2 million in “relief credit … to support the provision of additional data to meet increased customer demand for broadband services during the lockdowns in New South Wales, Victoria and South Australia in July 2021.”

Executive general manager of commercial Ken Walliss acknowledged that customer data demand had "incrementally increased as more states have gone into lockdown.”

To counteract that, NBN Co would offer a “credit payment, which will be made on a proportional basis to eligible retailers … to reduce retailers’ additional wholesale data overage costs.”

“To assess the size of the support, NBN Co took into account the long-term annual growth rate of data of around 25 percent and the average spend on data overage costs in FY20,” Walliss said.

“The $5.2 million payment across all eligible internet retailers is intended to help bring retailers’ data overage spend back in line with both baseline costs.”

Walliss said retailers would receive credit, covering the month of July, from August 3.

“It will be allocated according to each retailer’s share of industry total national overage, which represents the additional capacity purchased over and above the total included capacity for wholesale bundle discount speed tiers,” he said.

“NBN Co will also be waiving charges for any breaches of the CVC utilisation conditions from utilisation on 25 June 2021 to 31 July 2021.”

It appears the relief will not stretch beyond July.

Walliss said that NBN Co could not afford to bring back the original bandwidth bonus scheme that ran through much of 2020, whereby retailers received up to 40 percent additional bandwidth on February 2020 levels at no extra cost.

“It was the right thing to do at the time, but it came at a cost, some of which was borne by taxpayers,” Walliss said.

“If this had continued, it would have potentially impacted NBN Co’s ability to invest in network upgrades to deliver faster speeds and additional capacity to meet the historical annual growth in data demand.”

Walliss said that more permanent solutions to bandwidth overage charges may emerge from the special access undertaking (SAU) renegotiation, which is currently being led by the Australian Competition and Consumer Commission (ACCC).

NBN Co had responded to the issue earlier this week, disagreeing with traffic numbers being put forward by the retailers.

The company reinforced that point today, arguing that “as the industry wholesaler, NBN Co has the full picture on daily data demand and the volume of traffic that transits across our network.”

“We have generally seen the largest increase in data demand during the first week of any lockdown, with data demand then stabilising and reducing as restrictions ease,” it said.

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