NBN Co will have to pay internet providers a $25 rebate for every late connection, fault repair or missed appointment under a new requirement enforced by the consumer watchdog.
The national broadband network owner has given the Australian Competition and Consumer Commission an enforceable undertaking to pay the penalties as part of an ongoing ACCC review of NBN Co's service standards.
Under the new agreement, internet providers will be required to pass on part of the benefit of any rebate they get from NBN Co to their own customers.
The company will introduce the changes to wholesale agreements in the next three months.
NBN Co has also pledged to improve its reporting transparency and reveal congestion levels in its fixed wireless networks.
ACCC chair Rod Sims said greater transparency will encourage NBN Co to keep prioritising network upgrades designed to increase capacity, as well as allowing industry and the public to assess how well the company responds to congestion issues.
The regulator began the inquiry in November to consider if regulation was needed to force NBN Co to improve customer experiences.
Complaints about the National Broadband Network increased by 204 per cent in the last six months of 2017, with nearly 23,000 people complaining to the Telecommunications Industry Ombudsman.
More than 14,000 of those complaints were about service quality with another 8757 were regarding delays in establishing a connection.
"This undertaking by NBN Co addresses some of the issues highlighted in our inquiry but there are still a range of complex matters to consider," Mr Sims said.