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ACMA drafting rules to require telcos pass on NBN fault rebates to customers

New rules to be drawn up by ACMA as the ACCC reopens its NBN wholesale standards inquiry, and NBN proposed to pay for slow copper connections.
Written by Chris Duckett, Contributor

The Australian Communications and Media Authority (ACMA) has said it will require the rebates paid by NBN for failing to meet its wholesale service levels to be passed onto customers by retailers.

As it currently stands, NBN pays rebates to retailers and there is no requirement for consumers to receive any of the rebate itself, despite consumers needing to see some benefit. For instance, the Australian Competition and Consumer Commission (ACCC) previously said one benefit could be a replacement service.

The ACCC last year said it did not want a general pass through requirement that would force retailers to hand rebates to customers, with the one exception being missed appointment rebates.

However, on Thursday, as the ACCC announced it was resuming the NBN inquiry it paused due to coronavirus, ACMA said it had worked with the consumer watchdog on the implications of wholesale rebates.

"The ACMA intends to make rules that will require telcos to: Pass on to affected customers any wholesale rebate received from NBN Co, in monetary form or in kind, should a framework for wholesale rebates be implemented; clearly spell out the retail service levels they will commit to providing customers, including what they will do for their customers when these levels are not met," it said.

The ACMA said it would release a draft legislative instrument alongside a discussion paper addressing the rebates later this year. 

"The ACMA aims to have new obligations in place at the same time as agreement by telcos with NBN Co's new wholesale broadband agreement, which implements the wholesale rebate scheme," it said.

Also on Thursday, the ACCC said it was looking for feedback on a response by NBN relating to its entry-level access pricing and its wholesale service standards inquiries. 

"These inquiries were launched in response to concerns that NBN access terms were limiting competition and efficiency and risked making NBN products unaffordable for some consumers," ACCC chair Rod Sims said.

"We are now seeking feedback on NBN Co's proposed access arrangements with respect to each inquiry. Our current view is that NBN Co's proposals are reasonable but we want to hear from others."

If approved, the measures would be included in the wholesale broadband agreement between NBN and retailers that is due to start in December, and be in force for two years.

In its proposal, NBN said it was compromising to get the new agreement up in time for December by agreeing to increase capacity on its 12Mbps plan and shift to daily rebates.

For the entry level pricing, retailers would pay AU$22.50 for 1.7 Mbps of capacity, compared to the current AU$24.70 for 1.4Mbps rate. 

With rebates, NBN said it would shift from a AU$25 one-off connection rebate to daily rebates capped at 30 business days. For priority customers, that rebate would be AU$10 for each business day, while it would be AU$7.50 a business day for non-priority customers.

Changes to service fault rebates were also proposed, which would switch a AU$25 rebate to daily rebates of AU$20 per business day for priority customers, and AU$15 a business day for non-priority customers, capped at 60 business days.

For missed appointments, the AU$25 one-off payment would shift to a AU$50 rebate for missing an initial appointment, and AU$75 for each subsequent missed appointment dealing with the same issue.

The government-owned wholesaler also proposed to pay for when a fibre-to-the-node, fibre-to-the-basement, or fibre-to-the-curb connection is unable to hit the minimum guaranteed speeds of 25Mbps where an area is out of co-existence, or 12Mbps when it is in co-existence. 

In addition, NBN proposed paying a rebate of AU$10 a month for the first three months a connection is unable to hit those speeds, which would increase to AU$15 a month at the six-month mark, and AU$20 a month thereafter.

For users on congested fixed wireless towers, NBN proposed paying a AU$20 a month rebate for connections that are "persistently congested", which includes those connected to towers where average busy hour backhaul packet loss is greater than 0.25%, or a user is receives less than 6Mbps in busy hours.

NBN said it would also bring its service transfer fee down to AU$5, as it flagged last year. 

Updated at 3:20pm AEST, 20 August 2020: added NBN's proposed changes to rebates. 

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