ACCC to drag big telcos to court for over-promised, under-delivered NBN

Some of Australia’s largest telecommunications service providers — such as Telstra, Optus, TPG and Vocus — are under investigation due to “misleading” NBN advertisements, according to the consumer watchdog.

Australian Competition and Consumer Commission chairman Rod Sims told The New Daily that “some” of these “big four” service providers were already under investigation and have been put on notice over allegedly false NBN internet speed claims.

He confirmed that legal action would be taken against at least “a few” of the providers later this year for any breach of Australian Consumer Law.

“The big four telcos have been singled out because they’re the big players —they make up about 90 percent of the market — not because they are the biggest offenders. This is an industry-wide problem,” Sims told The New Daily.

“But in order to bring about major industry change, we need to be targeting them.

“We’re concerned consumers are being misled. Advertising is ambiguous or misleading to consumers and service providers are not buying enough capacity from the NBN.”

“Service providers are to blame, but to some extent NBN Co is also to blame. But no matter what the underlying issue is, service providers shouldn’t be misleading consumers,” he said.

Sims said any service provider selling a product while aware it cannot deliver as promised should place the customer on a new plan and provide appropriate compensation.

“They’re advertising fast speeds up to certain levels when they’re delivering well below that.

“People want to know the typical speeds to expect on and off peak times and the industry has not been doing that.”

Read more: The government is considering a “broadband tax” as experts call for transparency on NBN funding

The ACCC investigation hopes to provide service providers better marketing guidance, while its broadband monitoring program is expected to confirm which telcos are telling the truth when it comes to NBN speeds.

Meanwhile, Shadow Minister for Communications Michelle Rowland has launched a Freedom of Information (FOI) request demanding NBN Co to release its secret database with details about various technologies and internet speeds.

University of Western Australia’s David Glance, director of the Centre for Software Practice, said that while lack of data was a “fundamental problem” at the hands of service providers, NBN’s lack of transparency is also “disingenuous”.

“Setting this aside, it can be argued that this behaviour is being driven by the politics,” he said.

“Service providers are not selling fast broadband because they believe people won’t pay for it. Personally, I don’t accept that argument — I think people would pay more when Gbps speeds come in next year. They should be promoting that.

“If the government really wanted to see broadband make an impact, it would drop the requirement for repayment of the money spent and allow NBN Co to drop the [wholesale] CVC price.”

RMIT associate professor in network engineering Mark Gregory told The New Daily that, at this stage, the best thing an unhappy NBN customer can do is lodge a complaint with the ACCC or the Telecommunications Industry Ombudsman (TIO).

“Nothing will be done if customers don’t complain,” he said.

“I don’t think we’ll see any revelations from service providers or the NBN … but the ACCC’s move to take legal action is extremely positive for consumers.

“This needs to be brought to the courts.”

A Telstra spokesman said it will monitor and manage its capacity on the NBN network to ensure the bandwidth can support customer speeds.

“We will cooperate with the ACCC as it looks into NBN broadband speeds,” he said.

“We have introduced checks once a customer is connected to ensure they are receiving the speeds they expect.

“In any cases where we believe that customers may have paid for a speed boost they haven’t benefited from, we’ll be reimbursing the charges.”

Optus and Vocus declined to provide a statement, while TPG failed to respond to The New Daily‘s request for comment prior to publication.

An NBN Co representative said internet speed could be impacted by a range of factors including how retailers design their networks.

“Of particular importance is how much bandwidth a retailer is making available for end users to ensure that congestion issues do not occur at peak usage times,” he said.

“NBN continues to work closely with our retailers on how we price services on the NBN network.”

This article was first published by The New Daily. You can read it here.