NBN Co offers relief credit to providers: Does this matter to your internet?

NBN Co. has offered over $5 million in ‘relief credit’ to internet service providers, but has ignored calls to reinstate measures it implemented earlier in the COVID-19 pandemic. The proposed relief comes after half of Australians re-entered lockdown, causing online traffic to increase by 30-40%.

More traffic also has secondary impacts, especially on cost.

NBN Co. has therefore offered to provide this relief credit payment on a proportional basis to eligible providers, which it says will lower additional wholesale data coverage costs caused by an increase in internet usage during peak hours, while ensuring providers can maintain customer’s download speeds.

Representatives from both Telstra and TPG Telecom have labelled the one-off credit payment as insufficient, noting that while the telcos have incurred extra costs in order to match the increase in customer demand, NBN Co. are instead making money.

Ensuring your high speed internet

Providers pay NBN Co. a Connectivity Virtual Circuit (CVC) fee in order to ensure high speeds are available to customers during the peak hours of internet access. An increase in internet usage from customers, particularly in lockdown areas, means providers are paying more in CVC fees to ensure their service meets the needs of customers.

A number of internet service providers have called for the reinstatement of measures that NBN Co. implemented in earlier stages of the lockdown. Between March 2020 and January 2021 NBN Co. introduced a free 40% CVC bonus, reducing rising costs for providers as internet usage rose. The company said reintroducing the earlier scheme is unnecessary due to an existing provision of additional data across most speed tiers and the introduction of national CVC pooling.

There have been discussions about the modification or complete removal of the CVC fee already, as providers prefer to shift towards a flat-price payment per customer. While NBN Co. have provided a number of options of future pricing frameworks, nothing has been agreed to on that front.

As a part of the relief package, NBN Co. will waive charges for any breaches of the CVC utilisation conditions from utilisation between June 25 and July 31 of this year.

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