The Australian Competition & Consumer Commission has just started separate proceedings against Australia’s three biggest internet service providers over NBN speeds. The ACCC is alleging that Telstra, Optus and TPG made false or misleading statements in promotions for some of their NBN50 and NBN100 plans for FTTN (fibre to the node) customers.
In a statement released today, the ACCC claims that all three service providers told customers that they would perform speedtests and then inform the customer if their line was unable to reach the promised speeds and offer a remedy of either a downgraded or cancelled plan with no penalty.
“Telstra, Optus and TPG each promised to tell consumers within a specific or reasonable timeframe if the speed they were paying for could not be reached on their connection. They also promised to offer them a cheaper plan with a refund if that was the case. Instead, we allege, they failed to do these things, and as a result many consumers paid more for their NBN plans than they needed to,” ACCC Chair Rod Sims said.
“Collectively, hundreds of thousands of consumers were allegedly misled by these three big internet providers, Telstra, Optus and TPG, which accepted payments for NBN speeds they could not provide.”
The bigger problem, according to Sims, is that these providers have form for this kind of behaviour.
“What makes this behaviour even more concerning is that Telstra, Optus and TPG were well aware of these issues and had earlier given undertakings to the ACCC to provide remedies to consumers who purchased NBN plans with speeds that couldn’t be delivered,” Sims said.
“We are very disappointed that these companies do not seem to have taken seriously the undertakings they gave to the ACCC.”
These allegedly false statements were made to Telstra and TPG customers in April 2020, and Optus customers in December 2019.
Telstra’s alleged wording was: “If your NBN connection doesn’t allow you to properly benefit from the speed tier you’re on, we’ll provide you with a maximum line speed, once it’s available, along with alternative options.”
Optus’ supposed wording was “options will be provided if the actual speed you achieve is lower than what’s included in your plan or speed pack,” while TPG said it would email consumers their line speeds “around three weeks after activation” and that consumers would “have the option to move to a lower speed plan (if available) or to change providers without contract break fees”.
The ACCC alleges the three services providers lacked the proper systems to follow through with the speed checks, notifications and remedies.
The good news is that the issue was caught by Telstra’s own self-reporting practices, as well as the ACCC’s Measuring Broadband Australia Reports. The better news is that the ACCC says that Optus, Telstra and TPG have promised that customers will be compensated before the court case is finalised.
This action comes after Telstra, Optus and TPG made court-enforceable undertakings to the ACCC to make sure customers were getting the speeds they were paying for, or providing remedies when that wasn’t possible. This is not the first time Telstra or Optus have run afoul of the ACCC in regards to the NBN. You can read the full release here.
Update: Telstra has released a statement from Michael Ackland, Telstra Group Executive, Consumer & Small Business, acknowledging the issue.
“First and foremost we are very sorry to have let these customer down. We are managing this important and complicated issue proactively and accept that there are some things that we didn’t do right,” Ackland said in the statement.
“We self-reported these issues to the ACCC and we’re already taking steps to make sure customers are offered remedies and our processes are improved. As we’ve seen today with Optus and TPG, this issue is not isolated to us and is happening more broadly across the industry because of a complicated process…”
Ackland also pointed out that the problem was not entirely Telstra’s fault.
“In most cases, if NBN Co sells an RSP a connection that fails to deliver the speed the customer wants, and the RSP has paid for, the RSP is left to wear it,” he said. “The customer doesn’t receive what they want, the RSP still pays full price, and NBN Co have limited obligations to do anything about it and continue to charge RSPs for a plan they know the connection may not deliver. This is why we strongly support the current ACCC process examining the price RSPs pay for access to the NBN, and the service standards to which NBN Co should deliver.”
The statement also pointed to a recent Telstra Exchange blog which gives more information about speeds and the NBN.