Almost 60,000 Aussies caught up in NBN speed claim action

Late last year, Telstra, Optus and TPG all agreed to offer refunds to customers

Nearly 60,000 Australians are due to receive compensation from the country’s largest telco over misleading National Broadband Network (NBN) speed claims.

Late last year, Telstra, Optus and TPG all agreed to offer refunds to customers who may have received slower NBN speeds than what was offered in the products they bought through the resellers.

In each case, the promise of compensation was made following action by the Australian Competition and Consumer Commission (ACCC), which spent much of the latter part of 2017 scrutinising NBN retail service providers (RSPs) and their NBN marketing collateral. 

Altogether, roughly 58,700 Australian consumers could receive compensation from Australia’s top three telcos.

Telstra, Australia’s largest telco, was the first to offer up compensation. In early November, the ACCC revealed that 42,000 Telstra and Belong NBN customers were to be compensated after the Telstra admitted misleading customers with its maximum speed claims.

Telstra notified the consumer watchdog that approximately 9,000 of its customers on 100/40 Mbps and 50/20 Mbps plans could not receive speeds above the next lower speed plan. With the ACCC’s investigation subsequently revealed a larger pool of customers were impacted.

According to the ACCC, maximum speeds could not be achieved in real-world conditions due to limitations on affected customer’s NBN fibre-to-the-node (FttN) and fibre-to-the-building (FttB) internet connections.

In early December, Optus quickly followed the lead of Telstra in its move to offer “remedies” to more than 8,700 of its customers who were misled about maximum speeds they could achieve on certain Optus NBN plans.

According to the ACCC, technical limitations on Optus NBN customers’ FttN or FttB NBN connections meant the customers could not get the speeds that were advertised.

Just 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.

Affected customers included those who purchased TPG’s FttN and FttB NBN plans.

According to the ACCC, 7,509 of TPG's 100/40 Mbps FttN customers could not receive the speeds they purchased. Of those customers, 2,088 could not even receive 50/20 Mbps.

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.

The ACCC chairman, Rod Sims, revealed at the time that the consumer watchdog was focused squarely on the four largest players in the local market: Telstra, Optus, Vocus and TPG.

Ultimately, the ACCC wants to ensure that Australia’s broadband customers don’t end up getting a lesser service than they expect, as a result of ambiguous or false advertising advertising from ISPs.

Sims expanded on the ACCC’s concerns in his presentation at the Communications Day Unwired Revolution Conference in Sydney on 20 July, saying that the lack of clear and accurate information about typical broadband speeds is not good for consumers.

“The move to the NBN and the way in which NBN technologies work mean retailers need to dramatically re-think the way they talk about typical speeds and ensure consumers are presented with the information they need,” he said at the time.

The issue of slow NBN speeds can be attributed to a number of factors, with the under-provisioning of bandwidth by some NBN retail service providers (RSPs) potentially leading to slower speeds during peak times.

Another factor is the somewhat limited transparency around the speed potential of some NBN connections to individual premises before end customers are hooked up to the network. This is largely based on technical limitations.

However, NBN Co, the company behind the network's rollout, moved to alleviate the issues arising from under-provisioning with the pricing structure overhaul in December 2017 of some of its top-tier products.

The move was made to encourage the network’s resellers to provision more bandwidth capacity for customers and drive the uptake of high value services among end users.

Under the new changes, NBN Co plans to introduce a number of new products, including a new NBN 50 wholesale bundle charged at $45 a month with 2Mbps of bandwidth included and a NBN 100 wholesale bundle at $65 a month with 2.5Mbps capacity included.

“We’re still seeing more than 80 per cent of end users buying NBN packages of 25Mbps or less. And yet the NBN network has the potential to do so much more,” NBN Co's chief financial officer, Stephen Rue, said at the time.