Confusion about broadband claims prompts ACCC guidance

10 February 2017

Australian Competition and Consumer Commission consultation on fixed broadband speeds has found eighty percent of consumers are confused and want broadband speed information to be presented in a simple, standardised format to enable them to easily compare offers.

The ACCC has today published principles to help ensure internet service providers’ claims about broadband speeds aren’t misleading under the Australian Consumer Law.

“The ACCC is concerned that the use of vague speed claims is not providing consumers accurate, comparable, or useful information. Four out of five consumers have trouble comparing broadband speeds and this is causing a high level of complaints, confusion, and dissatisfaction,” ACCC Chairman Rod Sims said.

“Consumers believe they aren’t getting what they sign up for, and pay for, when it comes to home internet speeds. It is time the industry met consumer demand for accurate information about broadband speeds so consumers can compare offers and make informed decisions about their internet services.”

The ACCC has developed six principles to guide ISPs on best practice marketing when it comes to broadband speeds, including how to make a clear statement on the typical speeds consumers can expect during busy hours.

ISPs should make accurate information about broadband speeds available to consumers during sales processes and on their websites to help consumers compare plans, identify how various applications will perform (including video streaming), and provide customers with support if the service falls short of expected speeds.

“The ACCC has listened to the views of consumers and industry in identifying the fundamental areas of concern and developing principles by which to resolve them. The ACCC will now work with industry and issue more detailed guidelines to ensure they are able to use this framework to provide better information to their customers. It’s the first step of a longer-term plan to bring about meaningful change,” Mr Sims said.

 “Greater transparency around broadband speeds will enable consumers to make clearer comparisons on product choices, further encourage ISPs to compete on speed and save consumers money.”

The ACCC consultation received more than 400 responses from consumers and industry participants on its discussion paper last year. In addition to the principles published today, the ACCC will publish a best-practice broadband speeds advertising guide for providers in the coming months.

The ACCC is also in discussion with the Federal government about the possible introduction of a fixed broadband performance monitoring and reporting (BPMR) program in Australia.

Notes to editors

Complaints to the Telecommunications Industry Ombudsman about internet data speeds increased 48 per cent during 2015-16, making it the single largest issue for consumer complaints during the year. There are around 7 million fixed broadband subscribers and a further 6 million mobile broadband users (ABS, December 2015).

The report is available: Broadband Speed Claims – Consultation outcomes report.

The six principles

  1. Consumers should be provided with accurate information about typical busy period speeds that the average consumer on a broadband plan can expect to receive
  2. Wholesale network speeds or theoretical speeds taken from technical specifications should not be advertised without reference to typical busy period speeds[1]
  3. Information about the performance of promoted applications should be accurate and sufficiently prominent
  4. Factors known to affect service performance should be disclosed to consumers
  5. Performance information should be presented in a manner that is easily comparable by consumers, for example by adopting standard descriptive terms that can be readily understood and recognised, and
  6. RSPs should have systems in place to diagnose and resolve broadband speed issues.

 

Background

In July 2016, the ACCC began a public consultation on broadband speed claims issuing Broadband Speed Claims - Discussion paper. The ACCC received over 400 individual responses to this paper, which are available on the ACCC Consultation Hub: Consultation on broadband speed claims.

The ACCC continues to support the implementation of an independent Broadband Performance Monitoring and Reporting program, which would provide consumers and industry with regular verified independent performance information about broadband speeds and would complement improved marketing and business practices. ACCC reporting would be a suitable data source for ISPs to draw upon when making speed claims.

In 2015 the ACCC successfully completed a pilot monitoring program which provided an effective proof of concept that a program could be readily established in Australia. The report on the pilot is available on the ACCC website.

 

[1]      In the provision of broadband services, the ‘wholesale network’ is the underlying infrastructure or part of the network that retailers (RSPs) access in order to connect to and provide retail broadband services to end-user consumers.

 

Release number: 
MR 10/17
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