ACCC criticises nbn advertising plans

The ACCC has criticised the way internet retailers advertise the download speeds provided by their nbn plans and wants the industry to specify typical minimum download speeds.

The industry has come under fire for promoting plans based on theoretical maximum download speeds, which in practice are not achieved due to shared loads, particular during the popular evening peak.

“Currently around 30% 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,” said ACCC Chairman Rod Sims.

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

The ACCC has published a guide, called Broadband Speed Claims — Industry Guidance, that “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”.

Sims said the ACCC would like the industry to adopt standard labels so that consumers can know what sort of speeds they can expect during the evening peak, and therefore enable better comparison of 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. If you buy ‘Standard evening speed’ or higher plans, you should expect certain minimum speeds during busy periods,” Sims said.

“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,” Sims said.

The ACCC said 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.”

The ACCC said 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,” Sims said.

Industry body ACCAN has welcomed the move, saying that it “should help clear up the consumer confusion around broadband speeds”.

“At the moment consumers are unable to tell what speed they can expect from a service during busy periods,” said ACCAN CEO Teresa Corbin. “The ACCC’s advice to RSPs to focus their marketing on speed performance during busy periods will help consumers to know what speeds their services will actually deliver during peak times.

“The ACCC has recognised the frustrations consumers experience when services don’t work as advertised and expected, and is suggesting that retail providers can do better in these areas. We fully support this initiative and hope retail providers will get behind it.”

ACCAN also welcomes the ACCC’s assertion that RSPs should quickly fix problems with network connections and other faults and offer consumers a refund or cancellation of their contract where they are unable to provide a timely resolution of a speed issue.

“If a consumer does experience an ongoing issue, they can also take their complaint to the Telecommunications Industry Ombudsman,” added Corbin.

Follow us and share on Twitter and Facebook