GoConnect, a Melbourne based Internet service provider, will stop the unqualified promotion of its free ISP service after Australian Competition and Consumer Commission intervention.
Since the beginning of this year, more than 300,000 consumers across Australia have registered with GoConnect expecting to take advantage of this free Internet service. To date, less than five per cent of these customers have actually been connected. Connections have only been made in Brisbane, Sydney and Melbourne.
"Consumers viewing GoConnect's advertisements and website would have been entitled to think that once they had registered with GoConnect, their Internet service would be activated immediately. This is not the case", ACCC Chairman, Professor Allan Fels, said today.
"GoConnect should have been up-front about their capacity to connect members and the delays that would reasonably be expected".
GoConnect now expects that approximately 60,000 consumers from Melbourne, Sydney and Brisbane who had registered in January and February will be offered connections by the end of June. Those who registered after this date or who reside outside these capital cities will face a delay of at least several months before being connected.
"The advent of free Internet service providers is very welcome in Australia, as it increases competition between ISP's. Even though these ISP's are providing free services, businesses must still be mindful of the consumer protection provisions in the Trade Practices Act 1974.
"The Internet, as an integral part of the 'New Economy', is a priority area for the ACCC. Consumers must have confidence that the consumer protection provisions of the Trade Practices Act are enforced in relation to these emerging industries.
"Consumers must be able to make informed decisions when choosing between ISP's and clearly the relative availability of competing services is an important consideration when deciding between providers. ISP's cannot mislead or deceive consumers concerning such issues.
"This outcome sends a strong message to businesses that make statements about future matters. They must ensure that they have a reasonable basis for making those statements. If they don't have reasonable grounds, their statements can be deemed to be misleading under the Trade Practices Act".