ACCC pressures Telstra, Optus and co to advertise minimum NBN speeds

It's part of the competition watchdog's three-prong approach to overhauling how internet is sold.

Telstra, Optus and other broadband providers are facing pressure from the Australian Competition and Consumer Commission (ACCC) to advertise the slowest internet speeds consumers will face on their NBN plans as part of a revised industry guidance.

The providers that don't adopt the revised advertising labels could face a public shaming, government regulation or enforcement action, says Rod Sims, chair of the ACCC.

"I think the state of advertising is pretty dreadful. At the moment, the advertising is meaningless; we want to make it meaningful."

The ACCC is recommending internet service providers (ISPs) stop advertising the theoretical maximum speeds of an NBN connection, and instead promote the practical speeds that can be achieved during the peak evening period.

After having "worked extensively with network providers, retailers and consumer representatives", the ACCC has drafted four different labels to make it easier for people to understand the real-world speeds they're paying for.

Between the hours of 7.00pm to 11.00pm, a 'standard evening speed' should achieve 15Mbps, a 'standard plus evening speed' should reach 30Mbps, and a 'premium evening speed' plan should achieve 60Mbps.

The fourth label, 'basic evening speed', will be the least expensive and does not have a minimum speed defined by the ACCC.

The labels are a response to consumer complaints about broadband performance. Issues with broadband were experienced by 62% of Australians in the last six months, with speed and reliability accounting for 81% of all problems.

Registrations for the CHOICE broadband measuring program are now open. Interested in joining? Sign up here.

Most broadband providers are expected to adopt the voluntary guidance, says Sims, and those that don't will be publicly shamed or worse.

"We're going to give them up to three months to make the change. After that, if they don't make the change, we'll be making it public," he tells CHOICE.

"If this doesn't work, we could recommend to government to set a standard. We've [also] suggested we're going to take enforcement action for companies misleading consumers."

Publication of the industry guidance comes less than 24 hours after Optus offered some of its NBN customers a refund because they couldn't deliver advertised speeds. The move echoes Telstra's decision to refund almost 8000 customers in May for the same reason.

Refunds should be quickly offered to the customers who live in an area where advertised speeds cannot be met, says Sims.

"The providers should be checking that consumers are getting what they pay for. They should be calling them up, pointing it out and refunding them for the service they [aren't] able to get.

"If it can be fixed, it should be fixed quickly."

Sims declined to provide a guidance of what is considered a quick time frame, saying a resolution will depend on each case's individual circumstances.

Around 30% of NBN customers have been sold low-speed plans, with many unaware that their internet speeds are on par – or even worse – than their existing ADSL services.

Overhauling the way ISPs market NBN services is one part of the ACCC's three-prong approach to dealing with the market. The federal body plans to measure the broadband speeds of up to 4000 homes as part of its Broadband Performance Measuring and Reporting program, and use its enforcement powers to help correct misleading behaviour in the industry.

CHOICE has also launched an independent internet measuring program. The service will compare actual speeds against those that are advertised and identify the average download and upload speeds across the country.

The ACCC is investigating major broadband providers and plans to initiate court proceedings against those that are the most egregious.

"We're looking at all of the major providers. Whether we take them all to court, I don't know," says Sims. "We certainly intend that some cases will end up before the court by the end of the year."

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