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.
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
"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
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."