NBN Advertising Sucks And The ACCC Is On The Warpath

NBN Advertising Sucks And The ACCC Is On The Warpath
Image: nbnCo

Over the last few months, the ACCC has been telling RSPs to ensure that their ads accurately represent what sorts of speeds customers can realistically expect from their NBN connection. But this isn’t a new problem – anyone with an ADSL connection knows it’s a game of roulette guessing what sorts of networks speeds to you’ll get depending on proximity to an exchange, the quality of the copper and time of day. However, the ACCC has put RSPs on notice, telling them that misleading ads will see them come down hard.

Back in August, the ACCC released a document for RSPs titled “Broadband Speed Claims: Industry Guidance” [PDF] which set out four main guidelines for RSPs to follow.

  • indicate, in their plan descriptions and when marketing broadband plans that they supply over the National Broadband Network (NBN) and similar fixed-line based broadband access networks, the speeds at which the plans typically operate during the busy evening period
  • in order to assist consumers to readily compare plans, adopt a standardised labelling system (basic evening speed, standard evening speed, standard plus evening speed and premium evening speed) that indicates a minimum ‘typical busy period speed’ for the plan
  • take steps to provide remedies to those customers that cannot obtain the speeds at which their selected plan typically operates due to their particular network connection. This may include taking steps to deliver the speeds promised under the plan, providing billing refunds and reductions, supplying a more appropriate plan and/or offering to those customers the option to exit the contract without penalty
  • for services supplied over FTTB and FTTN connections, where there is clear potential for some consumers to not receive typical plan speeds, RSPs should include clear and prominent disclosure in product descriptions and marketing, and give point of sale or post sale information and assistance to affected customers.

But the message clearly isn’t getting through according to ACCC chairman Rod Sims.

“With the NBN now hitting [peak rollout] a significant number of people are now affected. ADSL services just weren’t sold on the basis of speed. They were sold in other ways. Now you have got this new product on the market and the advertising practices are frankly terrible.”

In the past, the main service ISPs offered was connectivity – we had limited choice when it came to performance, at least at the consumer end of the market. But many RSPs are offering different performance options which has added complexity to the equation. Many consumers won’t know the difference, in practical terms, of a 12Mbps and 50Mbps connection. If they’ve come from a good ADSL service delivering 20Mbps then they might be downgrading if they choose a lower cost service, thinking that NBN is being sold as the “better” network.

According to reports, part of the challenge is that RSPs may not actually know what service level is being delivered to their end customers. Only large providers have the resources and access to put appropriate monitoring equipment into exchanges. That means resellers that purchase access and bandwidth from larger service providers and then on-sell it don’t have any real control over what happens with their customers.

However, that’s not an excuse for smaller RSPs says the ACCC.

Perhaps one approach might be for broadband advertising to not focus on maximum possible speeds but to advertise a minimum speed that they will guarantee delivery of. For example, my current Telstra Cable plan advertises 100Mbps download – I routinely see about 10% better than that when using Speedtest or the management apps associated with the router I’m using.

Another option may be for RSPs to tell us how much bandwidth specific activities use. For example, if I have a PC running with an email client that checks two email services every 15 minutes, a web browser reading a couple of news sites and Spotify playing some tunes, how much bandwidth does that use? What if I add Netflix through a media streamer to the equation?

Consumers need practical information – not technobabble about Mbps, CVC and other jargon.

As a consumer, it is important to monitor service performance. There are ways of doing this yourself. If you’re not getting what was advertised to you, then contact the RSP to follow up and determine what the issue is. Although it is easy to immediately point the finger at the NBN, local issues can impact your performance – I once discovered that the QoS services on a router I was testing didn’t prioritise services but reserved bandwidth, making it unavailable for some applications even when the reserved service was inactive.

However, all things being equal, I think the ACCC is right to force RSPs to be more accurate and transparent in their advertising. Ultimately, an advertisement is a promise to a potential customer.