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.

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Comments

    I also hate when they say you have broadband but all it is, is re badged optus cable.

    Whilst I applaud the ACCC for wanting to bring in standardised advertising for service levels, the above mentioned tiers sound complex and confusing.

    The change Telstra made recently in response to the ACCC is causing confusion with customers in itself. People think they are getting a lesser service, but in reality its the same service as before, but advertised differently - to appease the ACCC.

    They need to work on it to make it simpler for customers, not more confusing.

      I'm with you. I think of myself as a techie and some of the proposals sound like it'd make life difficult. I'd rather see a proposal where they advertise not speeds at five different time periods but a weighted average. By this I mean peak is more important than off-peak so it's more important to most people. So it needs to be factored in more strongly.

      eg: one a 100mbit connection, unweighted might be 20 hours at 90mbit and 4 hours at 10mbit so they might advertise as 76mbit average. Which sounds great but would leave customers really disappointed since their performance during peak times is so much lower.

      A simple option for the same figures, just add average peak and off-peak (90+10) and divide by two (the two time periods) which gives you an average performance of 50mbit. Still not a great indication of peak performance but seeing Avg 50 would be a bit of a wake up on a 100mbit plan.

      There are probably even better ways to calculate an average to be more meaningful to the customer. But the whole point is the ACC could come up with a formula to calculate a single meaningful figure. Then if customers can't get that over time they have a right to complain.

    this all lies at the feet of the NBN - not the resellers - they are sold the speed benchmarks and the NBN deliver the product.

    What I find strange, and it apepars to be legal is the avenue the likes of TPG are taking. They advertised their speeds are 5-25mbps, and 12-100mbps. So essentially they are saying that a 88% drop in the expected, and paid for, speed is acceptable (and 80% drop on lower speeds).
    As they have advertised these plans this way, I can't see how you could end your contract as you were told what to expect. So you're signing a contract that you dont know what to expect, and can't get out of as they have set the expectations that you agreed to when signing up.

    How can any consumer know what speed to buy, or what is epected when the allowable buffer is 88%. Im sure if I paid somewhere between $12 and $100 for the $100 plan they'd be quick to black mark me.

    The local Dodo in Hervey Bay is going to get in trouble one day when someone savvy decides to jump up and down. The rep there is selling NBN to people stating they will get 100MB/s meaning its a 1Gb/s connection not having a clue what she is saying and telling ADSL customers they can get up 24MB/s on ADSL 2 instead of 24Mb/s and even then they are miles from the exchange so in reality will only 1.5Mb/s.

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