TPG subsidiaries, Internode and iiNet, are the latest internet providers set to compensate customers for not reaching internet speeds as promised in their National Broadband Network (NBN) contracts with the providers.
A total of 11,000 customers – 8,000 iiNet customers and 3,000 Internode customers – will have the option to choose from moving to a lower tier speed plan with a refund, or exiting their plan without cost and receiving a refund. However, neither iiNet nor Internode has offered a 25/5 plan since 13 December 2017.
The move brings the total amount of Australian customers to be refunded by their internet service providers to almost 70,000 since the Australian Competition and Consumer Commission (ACCC) started investigating providers that had advertised certain speeds for NBN services that they were not delivering.
“iiNet and Internode have admitted that between 2015 and mid-2017 they both likely engaged in misleading or deceptive conduct or made false or misleading representations by promoting and offering NBN plans with maximum speeds that could not be delivered,” ACCC Commissioner, Sarah Court, said.
According to the ACCC, iiNet advertised its highest-speed plan as “Up to 100Mbps. This is our fastest option and is sure to impress”, while Internode advertised its highest speed plan as “NBN Platinum: up to 100/40 Mbps”.
As with the previous cases, iiNet and Internode's customers were not able to reach the maximum speeds, the ACCC said.
"Some customers couldn’t even receive the maximum limit of lower speed plans,” Court said.
Customers will be contacted by email or letter by 27 April and advised of the maximum speed their connection can receive, which is only known once a customer is connected to the network, and their compensation options.
Customers affected were those who purchased fibre-to-the-node (FttN) or fibre-to-the-building (FttB) NBN plans.
A total of 7,621 (64 per cent) customers on an iiNet 100/40 Mbps FTTN plan could not receive the speeds they purchased. Of those, 1,925 could not even receive the speeds of the next lower plan, 50/20 Mbps.
On Internode's side, 1,720 (34 per cent) of its customers on a 100/40 Mbps FTTN plan could not receive the speeds they purchased. Of those, 479 could not even receive 50/20 Mbps.
The ACCC has now received five court-enforceable undertakings from internet service providers in relation to NBN speed claims.
Telstra and Belong National Broadband Network were the first ones to announce compensation after admitting to misleading customers with its maximum speed claims.
Optus followed in December 2017, when it announced it would offer remedies to 8,700 customers over misleading NBN speed claims.
According to the Australian Competition and Consumer Commission (ACCC), however, technical limitations on the customers’ fibre-to-the-node (FttN) or fibre-to-the-building (FttB) NBN connections meant the customers could not get the speeds that were advertised.
Weeks later, on 20 December, TPG Internet became the third telco in Australia to agree to compensate customers that were misled about maximum speeds they could achieve on certain TPG NBN plans, with up to 8,000 customers affected.
“Fixing misleading claims about internet speeds during the transition to the NBN is an enforcement priority for the ACCC and we strongly urge other providers to act quickly to ensure their advertising is accurate,” Court said.
The ACCC revealed plans in July last year to take legal action by the end of 2017 against telcos that are found to have misled consumers over broadband speed claims.
The move to take such cases to court came after ACCC decided to put Australia’s internet service providers (ISPs) in the crosshairs with its program to monitor the country’s broadband speeds and crack down on dodgy speed claims by network resellers.