NBN Co has put $5.2 million in “relief credit” on the table for retail service providers to mitigate the increasing bandwidth costs of recent COVID-19 lockdowns.
The broadband builder will offer a credit payment on a proportional basis to eligible retailers and claims it will reduce additional wholesale data overage costs brought on by an increase in usage during the peak evening hours while ensuring they can maintain customers’ download speeds.
However, NBN Co has declined to bring back last year’s additional 40 per cent free Connectivity Virtual Circuit (CVC) capacity boost, which lasted from March 2020 until January, despite pleas from retail service providers (RSP).
The announcement follows the end of recent lockdowns in South Australia and Victoria and comes as NSW looks set for another month locked down.
The company said the return to the CVC boost was unnecessary because of its provision of additional data across most speed tiers and the introduction of national CVC pooling, which it claims makes procurement of CVC “more efficient”.
“NBN Co’s previous offer of additional capacity at no additional costs to internet retailers, which was in market from March 2020 and transitioned out by 31 January 2021 was originally intended as a short-term measure to assist retailers’ adjustment to the initial increase in customers’ data consumption at the onset of COVID restrictions,” said executive general manager of commercial Ken Walliss.
“It was the right thing to do at the time, but it came at a cost, some of which was borne by taxpayers. 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.”
RSPs will receive the COVID-19 relief credit from 3 August, including July, and 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. The offer will apply to all TC4 services on Bundled CVCs.
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.
The announcement follows NBN Co's recent handout of $1.1 billion over four contracts for the upgrading of fibre-to-the-node connections to fibre-to-the-premises for homes and businesses.