ACCC wants NBN plan advertising overhaul

21 August 2017

The ACCC has published guidance for retailers on how to advertise speeds for NBN broadband services, including clearly identifying typical minimum speeds during peak periods.

The publication, Broadband Speed Claims – Industry Guidance, seeks to move retailers from advertising their services based on the maximum internet speeds that may be delivered during off-peak periods, to the speeds consumers can expect to achieve during the busy evening periods between 7pm and 11pm.

“Currently around 30 per cent of NBN customers have been sold low-speed plans, with many not realising their internet speeds may not be any better—and in some cases worse—than existing ADSL services,” ACCC Chairman Rod Sims said.

“Many other NBN customers, while on higher speed services, experience lower than expected speeds during busy periods due to under provisioning of capacity by their retail service provider.”

The ACCC has created standard labels it would like the industry to adopt in order to give consumers better information about what sort of speeds they can expect during the evenings and better allow consumers to compare plans.

“With this guidance, if you buy a ‘Basic evening speed’ plan you should generally not expect speeds much different to your pre-NBN experience. If you buy ‘Standard evening speed’ or higher plans, you should expect certain minimum speeds during busy periods,” Mr Sims said.

“Retailers should be very clear with customers about the typical speeds they can expect during busy evening periods. It is not acceptable to advertise an ‘up to’ speed claim, as this can give the false impression that the speed advertised is achievable at most times, including during the busy period."

“In some cases it is not clear from the advertisements what sorts of internet speeds consumers can expect at all,” Mr Sims said.

The ACCC says the guidance stipulates that if consumers are experiencing problems with their network connections or other faults that affect their service they will be resolved quickly or be offered a refund or cancellation of their contract.

“Under the ACCC’s new guidance, retailers should work quickly to identify faults and resolve customer complaints about the speed or performance of their retail services,” Mr Sims said.

“In circumstances where a retailer is unable to provide timely resolution of a speed problem, the retailer should offer refunds and alternative products or the option to leave their contract.”

The ACCC says providing such detailed guidance to industry is an unusual step for the ACCC.

“We judge, however, that such a step is necessary because the current advertising around NBN products is poor, which is unacceptable in the context of a forced migration to the NBN,” Mr Sims said.

“While the guidance is voluntary, it provides a strong benchmark against which the ACCC, and more importantly the community, will judge the advertising of retailers. The ACCC will also be closely monitoring retailer compliance with the Australian Consumer Law.”

The Broadband Performance Monitoring and Reporting program will make public the actual speeds achieved on the main plans of the main retailers. This visibility will inform consumers and push retailers to lift their game. The speed advertising guidance will complement this by seeing consumers properly informed about what they are buying.

The ACCC consulted extensively with network providers, retailers, and consumer representatives in preparing the guidance, which builds upon six principles that the ACCC published in February this year. The ACCC sees this guidance as a short term step as it seeks to 'raise the bar'; it will also review the guide after 12 months to determine its effectiveness.

See also:

Broadband speed claims: Industry guidance

Broadband speed claims: focussed consultation outcomes

Notes to editors

The ACCC is suggesting retailers adopt the labels below, which have a number of interrelated qualifying criteria, including minimum typical busy period speeds and the minimum wholesale access service needed to supply various retail plans.

The particular usage profile that corresponds with each standardised label is set out below.

 

Label

Basic evening speed

Standard evening speed

 

Standard plus evening speed

 

Premium evening speed

 

Minimum typical busy period speed

 

15 Mbps

30 Mbps

60 Mbps

These labels were developed with a view to residential customers with standard, above standard, and premium broadband requirements receiving broadband speeds during the evening busy period that would still allow them a good consumer experience, having regard to the number and type of applications that they operate concurrently over their broadband connections.

The guidance also describes how the ‘minimum typical busy period speed’ should be calculated.

The guidance encourages retailers to, in addition to applying evening speed labels, provide consumers with more detailed speed information in their plan advertising should they wish to do so.

Background

This guidance is part of a three-pronged strategy by the ACCC to ensure consumers understand what they are purchasing. The other elements of the strategy are the Broadband Performance Monitoring and Reporting program, and enforcement action in relation to misleading speed claims.

On 7 April 2017, the ACCC welcomed the federal government’s announcement that it will fund the Broadband Performance Monitoring and Reporting program, which will provide Australian consumers with accurate and independent information about broadband speeds.

The ACCC’s program will install hardware-based devices in around 4,000 households over four years to perform remote testing and determine typical speeds on fixed-line NBN services at various times throughout the day. The ACCC says its Broadband Performance Monitoring and Reporting program will also help it determine if issues relating to poor speeds at peak times are being caused by the performance of the NBN or the network management decisions made by retailers.

Release number: 
MR 138/17
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