ACCC Investigating Telcos Advertising On Broadband Speed

ACCC Investigating Telcos Advertising On Broadband Speed
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The Australian Competition and Consumer Commission (ACCC) is seeking submissions from consumers about their broadband speed and performance, and what they were promised by the telcos and advertising.

In the first quarter of 2016, the ACCC said there were 2159 issues reported to the telecommunications industry ombudsman about slow data speeds. More consumers contacted the telco ombudsman with internet complaints than any other issue.

ACCC Chairman Rod Sims said in a press release: “Consumers are entitled to expect clear and accurate information about broadband services. At the moment, it is difficult for consumers to access accurate information as broadband advertising is not focusing upon speed and performance.

“Consumers are being presented with little information or vague claims like ‘boost’ and ‘fast’, or just pictures in advertising of athletes or animals. Consumers need accurate information about broadband speed and performance so that they can understand if what they are being offered will actually meet their needs.”

An Optus spokeswoman told SBS: “We always take consumer information seriously and take steps to verify technical claims made in our marketing materials. We indicated some time ago that we’d like to work with the ACCC to ensure a common industry-wide understanding of speed measures.”

A spokesman for Telstra told SBS: “We want to offer our customers the best possible experience when they’re connecting to the internet – whether that’s through NBN, broadband ADSL or mobile.”

The ACCC didn’t name drop any telco in particular, but here are some ads by the big internet providers Optus and Telstra.

Optus:

Telstra:

FULL RELEASE:

ACCC calls for better broadband speed information

The Australian Competition and Consumer Commission wants to see consumers provided with better information about broadband speeds, to improve competition and consumer outcomes in the retail broadband market.

A discussion paper published today calls for views on how consumer information about broadband speed and performance can be improved.

The ACCC is concerned about the current lack of clear information about broadband performance in advertising and other material available to consumers, and will look at steps that could be taken by the ACCC, industry participants, and others to help address the problem. 

“Consumers are entitled to expect clear and accurate information about broadband services,” ACCC Chairman Rod Sims said.

“At the moment, it is difficult for consumers to access accurate information as broadband advertising is not focusing upon speed and performance. Consumers are being presented with little information or vague claims like ‘boost’ and ‘fast’, or just pictures in advertising of athletes or animals. Consumers need accurate information about broadband speed and performance so that they can understand if what they are being offered will actually meet their needs,” Mr Sims said.

In the first quarter of 2016, there were 2,159 issues reported to the TIO about slow data speeds. It was the top internet complaint issue, and more consumers contacted the TIO about internet complaints than any other issue.

The ACCC considers that improved consumer information will minimise the potential for consumers to be misled, reduce consumer search costs, and assist consumers to make informed purchasing and switching decisions. This will encourage broadband service providers to compete on performance as well as price and inclusions (such as data allowances).

These issues have been considered or are being looked at in Australia and other countries due to changes in the market and consumer expectations.

“The ACCC believes that it is timely to consider what further steps need to be taken in Australia,” Mr Sims said.

Background

Australia has around 7 million fixed broadband subscribers and a further 6 million mobile broadband users (ABS, December 2015). Consumer demand for data is increasing (fixed network data demand grew by 40 per cent in 2014-15, from 0.96 million terabytes (TB) to 1.3 million TB).

The ACCC is inviting submissions on how information about broadband performance and speed can be improved, including views about the factors that may be inhibiting retail service providers from presenting this information. Submissions will assist the ACCC to identify the best ways to facilitate improvements.

The closing date for submissions is 25 August 2016.

The ACCC Broadband Speed Claims – Discussion paper and consultation questions for consumers are available on the ACCC Consultation Hub here: Consultation on broadband speed claims

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