ACCC Cracks Down On “Unacceptable” NBN Advertising By Telcos

The competition watchdog has had a gutful of the “poor” advertising campaigns by internet providers to spruik National Broadband Network (NBN) service speeds, tackling the problem with an unusual approach.

The Australian Competition & Consumer Commission (ACCC) has published an industry guidance which seeks to move retailers from advertising their services based on the maximum internet speeds that may be delivered during off-peak periods, to the speeds consumers can expect to achieve during the busy evening periods between 7pm and 11pm.

ACCC chairman Rod Sims said currently around 30 per cent of NBN customers have been sold low-speed plans, with many not realising their internet speeds may not be any better – and in some cases worse – than existing ADSL services.

“Many other NBN customers, while on higher speed services, experience lower than expected speeds during busy periods due to under provisioning of capacity by their retail service provider,” he said.

The ACCC has created standard labels it would like the industry to adopt in order to give consumers better information about what sort of speeds they can expect during the evenings and better allow consumers to compare plans.

“With this guidance, if you buy a ‘basic evening speed’ plan, you should generally not expect speeds much different to your pre-NBN experience,” Sims explained.

“If you buy ‘standard evening speed’ or higher plans, you should expect certain minimum speeds during busy periods.

“Retailers should be very clear with customers about the typical speeds they can expect during busy evening periods. It is not acceptable to advertise an ‘up to’ speed claim, as this can give the false impression that the speed advertised is achievable at most times, including during the busy period.”

“In some cases, it is not clear from the advertisements what sorts of internet speeds consumers can expect at all.”

The guidance stipulates that if consumers are experiencing problems with their network connections or other faults that affect their service, they will be resolved quickly or be offered a refund or cancellation of their contract.

“Under the ACCC’s new guidance, retailers should work quickly to identify faults and resolve customer complaints about the speed or performance of their retail services,” Sims said.

“In circumstances where a retailer is unable to provide timely resolution of a speed problem, the retailer should offer refunds and alternative products or the option to leave their contract.”

Sims noted that providing such detailed guidance to industry is an unusual step for the ACCC.

“We judge, however, that such a step is necessary because the current advertising around NBN products is poor, which is unacceptable in the context of a forced migration to the NBN,” he said.

“While the guidance is voluntary, it provides a strong benchmark against which the ACCC, and more importantly the community, will judge the advertising of retailers. The ACCC will also be closely monitoring retailer compliance with the Australian Consumer Law.”

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