Broadband Advertising Is Too Vague, Says ACCC

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Has a grinning olympian convinced you to upgrade to the NBN? Or maybe you've hooked up to "super fast high speed" internet. But do you most people actually know what they are buying when they sign up to an internet service provider deal?

We need to be provided with better information about broadband speeds, the Australian Competition and Consumer Commission says, amid concerns about the current state of advertising claims.

"At the moment, it is difficult for consumers to access accurate information as broadband advertising is not focusing upon speed and performance," says ACCC Chairman Rod Sims. "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.”

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.

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 and will be open until 25 August.

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