NBN Co has agreed to pay daily rebates on slow, congested and underperforming services, as well as for missed appointments and service faults, in a drastic U-turn.
The changes could be in place as early as December when the network operator’s new wholesale broadband agreement - WBA4 - is anticipated to be live.
The present agreement, WBA3, ends November 30. Its negotiation caused so much controversy that it led to two long-running inquiries by the Australian Competition and Consumer Commission (ACCC), which were brought off a COVID-related hiatus today.
Within these inquiries, the ACCC previously raised the prospect of fining NBN Co for failing to meet service levels.
NBN Co vigorously opposed the idea, saying retail service providers would milk it for rebates. It even threatened to pull future upgrades of the fibre-to-the-node network in retaliation.
But as of today that opposition has evaporated - and pending approval from the ACCC and retail service providers (RSPs), a new rebate scheme will be in place for the length of WBA4.
The sudden lack of opposition may be because the company has largely finished what it calls the “initial build”, and is therefore substantially less likely to incur large fines than when it was still rolling out large portions of the network.
Some of these problems - and therefore rebates - could also be overbuilt in the long-term; closed-circulation telecommunications publication CommsDay reported earlier this week that -upgrades to the FTTN and fixed wireless footprints to full fibre could be on the cards to stave off competition and cherry-picking from 5G networks.
The proposed rebate structure is as follows:
On new connections that take too long to make, NBN Co proposes to pay $7.50 per business day (capped at 30 days) on a standard or ‘accelerated’ connection, or $10 per business day for priority assistance users.
Service faults would pay $15 per business day (up to 60 days) for non-priority assistance customers, or $20 per business day (up to 60 days) for priority assistance customers.
On missed appointments, NBN Co proposes to pay $50 “when the initial appointment time is missed”, and then $75 for additional missed appointments aligned to the same service ticket.
If NBN Co turns up late and the user consents to the work taking place, a rebate of 50 percent would still be paid.
There are also new rebates to be paid if FTTN/B/C speeds don’t hit the “PIR objective” i.e. the peak information rate.
This could mean NBN Co is fined for services that don’t hit the minimum 25/5Mbps speeds (though, long-term, NBN Co is likely to move such users to a different type of access technology to meet that minimum mandated service level).
While awaiting remediation, RSPs can expect to see a $10 a month discount in the first 1-3 months, rising to $15 a month for 4-6 months, and $20 a month if remediation work extends beyond that.
RSPs are expected to pass all rebates through to the end user.
NBN Co is also proposing a $20 a month rebate on fixed wireless services that are “persistently congested”; that is, suffering over 0.25 percent packet loss over backhaul, or with average downlink speeds of less than 6Mbps.
It previously argued there was "no strong basis" to pay out on fixed wireless services because it didn't guarantee busy hour speeds there.
Exclusions, other changes
There are a number of exclusions to the rebate proposal, and these are contained in this document [pdf].
In addition to the rebate regime, NBN Co said it would publish a two-year roadmap of price discounts, which is the primary mechanism the company uses to set prices.
The discount mechanism was never intended to be used as such and causes considerable uncertainty for RSPs in not knowing when NBN Co might retract or alter pricing they rely on.
NBN Co's re-positioning
NBN Co said in a separate statement [pdf] that the ACCC’s decision to temporarily halt its inquiries during COVID had given the company more time to engage with RSPs.
However, the halt also “led to some uncertainty about the way forward in relation to our WBA4” agreement, it said.
The company positioned its backdown on rebates as a resolution to an impasse that threatened to prolong the deeply unpopular terms of WBA3.
“We believe it is important at this point in time to gain greater certainty so we can move forward with industry under a new and more balanced agreement,” NBN Co said.
“With this in mind, NBN Co has submitted a proposal to the ACCC which we believe resolves the issues in the public inquiries and enables NBN Co to offer the industry a package under WBA4.
“Extending WBA3 is not preferred because this will delay the introduction of significant benefits to industry and end-users under WBA4.”
NBN Co said its proposal would offer “greater pricing certainty” to RSPs and end users, and ensure customers received services that “matched their expectations”.
It would also push “stronger incentives” onto NBN Co “to meet its service standards for connections, fault repair, appointment keeping, and network performance.”
The ACCC will take industry submissions on the proposals up until September 11.
NBN Co's proposal was immediately welcomed by the Australian Communications Consumer Action Network (ACCAN).
“People have the right to know what level of service they can expect from their internet service provider and what steps their telco will take when these levels aren’t met,” ACCAN CEO Teresa Corbin said in a statement.
“Ideally, we would like this service level information to be made public so that consumers can compare providers based on this metric before they sign up to any NBN broadband plan.”
Corbin also supported the rebate regime, with appropriate pass-through obligations on RSPs to ensure end users benefitted.
“It is not the telcos who are inconvenienced when an NBN technician doesn’t show up when they promised to do so - it is consumers," she said.