Telstra to compensate nbn customers over slow speeds

Telstra has agreed to compensate around 42,000 customers for slow nbn speeds after the ACCC found the operator had been promising higher speeds in advertising than it was capable of delivering.

The operator had, since September 2015, been advertising a “Super Fast Speed Boost” plan advertising maximum speeds of up to 100 Mbps download and 40 Mbps upload.

Some of these plans were sold to customers stuck on nbn fibre to the node (FTTN) or fibre to the building (FTTB) connections, meaning a number were incapable of receiving the maximum advertised speeds of the plans.

“Our investigation revealed many of Telstra’s FTTN and FTTB customers could not receive the maximum speed of their plan. Even worse, many of these customers could not receive the maximum speed of a lower-speed plan,” ACCC Chairman Rod Sims said.

The investigation found that 56% of FTTN customers on this plan could not receive the promised speeds, and more than a third of these could not receive the 50 Mbps download 20 Mbps upload promised in the next speed tier plan down.

In addition, 45% of FTTN customers on the 50 Mbps plan and even 2% of customers on the base 25 Mbps plan could not receive the advertised speeds.

After the ACCC opened the investigation, Telstra admitted that this conduct is likely to have contravened Australian competition law, which prohibits engaging in misleading or deceptive conduct and making false or misleading representations.

Telstra has provided a court-enforceable undertaking to the regulator committing to offer remedies to affected customers including refunds.

As part of its pledge, Telstra has agreed to conduct a speed test within four weeks of connecting a new service, and if the recorded speed is below advertised to notify the customer and offer remedies.

Telstra Group Executive for Consumer and Small Business Vicki Brady said the company has been conducting such speed testing since May and has been offering refunds in cases where speeds fall below advertised.

“We also give these customers the option to move to a different speed tier, or to cancel their contract altogether,” she said.

Sims said Telstra had preemptively reported issues related to some of the affected customers, and the ACCC investigation uncovered the remaining issues.

“We are pleased that Telstra proactively reported this serious problem to the ACCC and has cooperated in creating a remediation plan for affected customers,” he said.

“However, we are mindful this is not just a Telstra problem — it is an industry problem where consumers are often not getting the speeds they are paying for. We will continue to investigate other retail service providers selling broadband plans over the nbn and take enforcement action where appropriate.”

This suggests that more such investigations into other service providers could be on the way. As well as deceptive advertising, the ACCC is also exploring matters related to retail service providers not purchasing adequate capacity to deliver advertised speeds during peak times.

“To address this second problem of underprovisioning, the ACCC is urging all ISPs to advertise the typical speeds customers can expect in the busy evening period between 7 pm and 11 pm,” Sims said, adding that the regulator expects major ISPs to adopt this approach to advertising over the next month.

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