Competition watchdog finally bites down on 'terrible' advertising for NBN

RELATED: NBN woes worry tech experts

Internet providers should "immediately" change their advertising for National Broadband Network speeds, according to new guidance issued by the competition watchdog.

The regulator is finally biting down on what it calls "frankly terrible" practises of advertising speeds at their theoretical maximum, a practice that has seen complaints about NBN speeds skyrocket in the past year. 

NBN Co currently has 2.68 million active connections and has passed nearly 6 million premises.  

Telcos should "immediately implement measures" set out in the guide, which include: providing consumers with typical peak evening speeds, adopting standardised labelling of peak evening speeds, offering customers discounts or refunds if they cannot get the speeds they expect, and making it clear to consumers on fibre-to-the-node and fibre-to-the-basement that they may not get typical NBN speeds. 

Rod Sims, Australian Competition and Consumer Commission chair, says he won't let go ''now that we have this tiger by the tail''.  Picture: SEAN DAVEY

Rod Sims, Australian Competition and Consumer Commission chair, says he won't let go ''now that we have this tiger by the tail''. Picture: SEAN DAVEY

"With the NBN now hitting [peak rollout] a significant number of people are now affected," chair of the Australian Competition and Consumer Commission, Rod Sims, said on Monday. 

"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."

Consumers are being forced to migrate to the NBN and the ACCC has observed a lot of misleading advertising. Mr Sims added his agency has active investigations into all the major telco providers. 

"Now that we have got this tiger by the tail we are not going to let go of it. I accept we have taken time to get onto this, as I say we can't do everything. This is now almost our top consumer priority and we are going to stay with it until we get significant change," he said on Monday. 

"We have just got to raise [advertising standards] up and I think it would take too long to get [standards] where they have got to be just by taking enforcement action. We will be showing up what speeds are achieved by the end of the year, we will be giving this guidance and see who is advertising on the basis of busy speeds, and we will be taking people to court. I think the troika will have a big effect."

Head of the Australian Communications Consumer Action Network (ACCAN), Teresa Corbin, said consumers have no way of knowing what speeds they will get during busy periods from current advertising. 

"The ACCC has recognised the frustrations consumers experience when services don't work as advertised and expected, and is suggesting that retail providers can do better in these areas," she said.

"We fully support this initiative and hope retail providers will get behind it."

Consumers have been disappointed by their NBN experience, and the ACCC believes misleading advertising is partially to blame.  Picture: ROBERT PEET

Consumers have been disappointed by their NBN experience, and the ACCC believes misleading advertising is partially to blame. Picture: ROBERT PEET

The ACCC wants telcos to avoid selling products over 25 megabits per second (Mbps) to households connected with FTTN until they can guarantee "actual maximum attainable line speed information after activation". 

It also wants telcos to adopt labels for minimum attainable evening speeds of 'basic', 'standard', 'standard plus', and 'premium'. 

"There is no qualifying minimum speed for a plan labelled as 'basic evening speed' given there is no slower speed tier to which a consumer could move," the ACCC's guidance notes. However, it still wants the telcos to provide an expected number of Mbps during typical busy periods. 

NBN is reaching close to peak roll out, but consumers have reported a lot of disappointment with speed performance.  Photo: Rob Homer

NBN is reaching close to peak roll out, but consumers have reported a lot of disappointment with speed performance. Photo: Rob Homer

A 'standard' evening speed should be an average of about 15 Mbps while 'standard plus' is about 30 Mbps and 'premium' 60 Mbps.

The ACCC wants telcos to randomly test 75 services over two weeks every quarter to ensure consumers keep getting the speeds they pay for. The telco should tell consumers if their service changes, or be redressed immediately to restore speeds. 

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