The ACCC Is Finally Cracking Down On 'Misleading' NBN Claims

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Telecommunications companies are misleading customers over broadband internet speeds and the worst offenders will likely face prosecution over dodgy advertising by the end of the year, the consumer watchdog says.

Chairman Rod Sims said the Australian Competition and Consumer Commission (ACCC) would conduct "compliance sweeps" of broadband marketing and telco websites later this year in a bid to keep telcos honest about speeds available on the national broadband network.

"Right now, consumers are not getting the basic information they need to make an informed choice. Indeed, they are often being misled," Mr Sims said on Thursday.

"We want to see consumers presented with information based on the realistic speeds they can expect to experience, particularly during busy periods. Not just best-case scenarios."

Broadband was an ACCC compliance and enforcement priority this year, he told a telco industry conference.

"We are investigating and expect to be taking action in respect of misleading conduct around broadband speeds," he said.

As more Australians migrate to the government-owned NBN, tensions are building between consumers and telcos over download speeds, particularly during peak evening periods.

In turn, NBN Co and telcos are blaming each other for bandwidth pricing and provisioning, or pointing the finger at consumer equipment, modem placement and habits.

ACCC chairman Rod Sims wants consumers to have more information about actual broadband speeds, not just 'best-case scenarios'. Photo: Ben Rushton However, the government-owned NBN Co already knows exactly how much capacity each telco purchases and how often their network reaches congestion.

"We advise the [retailers] when they are hitting capacity levels but it is a matter for the [retailers] to decide whether to purchase more [capacity]," a spokesman said.

NBN Co also provides telcos with weekly reports on actual speeds being reached at each active copper connection on its fibre-to-the-node network, but does not share this information with consumers or the ACCC.

Mr Sims told Fairfax Media consumer expectations were shaped by marketing. If telcos told consumers a 12 megabit per second [Mbps] connection on the NBN was "superfast', this could be considered misleading because it was similar to pre-NBN speeds.

"Of course, there is something lodged in the consumer mind that says 'NBN is coming here to provide you with fast speeds'."

But he told consumers not to expect faster speeds unless they were prepared to pay more.

The ACCC had the power to gather information for legal actions, but the upcoming broadband monitoring scheme was "the big hope" for solving the speed mystery, Mr Sims said.

He said telcos had told the commission they didn't like selling faster plans because consumers expected to pay only $60 a month for internet, which was not enough to cover bandwidth fees.

However, one smaller retailer, Aussie Broadband, has a growing reputation for consistently delivering NBN speeds consumers had paid for. It does this by restricting excessive use and adding new customers only when sufficient bandwidth is available. And unlike some telcos, it does not offer unlimited plans.

"Unlimited service makes it very difficult for us to predict usage, and thus difficult to control the network quality," acting managing director John Reisinger said.

"Unlimited services tend to attract people who use very large amounts of data, which can affect other users in their area."

Aussie Broadband's prices are higher for 100 Mbps speeds - ranging from $80 a month for 500 gigabytes to $170 a month with 3 terabytes of data. In comparison, TPG offers unlimited data at that speed for $100 a month while Optus charges $110 a month.

Market reports published by the ACCC show smaller telcos - outside the big four providers of Telstra, Optus, TPG (which owns iiNet and Internode), and Vocus (which owns iPrimus) - are growing their market share on the NBN.

"Other" providers increased their market share for fibre-to-the-premises connections from 2.4 per cent at December to 2.8 per cent in March, and on fibre-to-the-node connections it was up from 1.8 per cent to 2.1 per cent in the same period. The next ACCC report is expected before the end of July.


This article originally appeared in Digital Life, The Sydney Morning Herald's home for everything technology. Follow Digital Life on Facebook and Twitter.

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Comments

    All that will happen out of this is the removal if useful information and advertised speeds to hold ISPs to. They won't offer up "speeds" any more, just branded products. You won't know what speed you're supposed to get, because they won't tell you.

    Like normal, the ACCC is utterly screwing over consumers.

    Oh good, they can start with Optus because these guys mislead you all the time regardless of Usain Bolt being in the commercial

    Perhaps force Telcos to note the following in their T&Cs:

    "NBN speeds vary. To estimate your speed visit nbnspeed.gov.au" - then have a tool that gives a speed range for customers after they enter their particulars.

    Not knowing the speed is the number 1 barrier for me signing up to NBN.

      But what happens when all ISPs provide the range "Between 0 - 100 MBPS"?

        Oh no. You've got me. I can't see how to get around that.

    I signed up for Aussie BB last month and then added the unmetered 1am-7am $10 package for backup of home server etc

    I just can't see how this can be practically measured and enforced. I've recently signed up to FTTN and during the day when everyone is at work / school, I get the advertised 25 MBPS, but when I actually want to use the interwebs between 6 and 10 PM it drops to 15 MBPS.

    So my ISP can turnaround and show that during particular quiet times, the speeds are achievable.

      15 MBPSIs this a capitalisation issue or do you really get 'only' 15MegaBYTES per second in peak times?
      Only asking as the best I've ever got from Optus is about 20 MegaBITS per second (20Mbps). That's nearly an order of magnitude difference.

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