Optus to compensate customers for slow NBN speeds

Optus will offer remedies to more than 8,700 of its customers who were misled about maximum speeds they could achieve on certain Optus NBN plans.

Between 1 September 2015 and 30 June 2017, Optus offered NBN services to consumers advertising a range of speed plans. This included a “Boost Max” which advertised maximum download speeds of up to 100 megabits per second (Mbps) and maximum upload speeds of up to 40 Mbps (100/40 Mbps).

Technical limitations on the customers’ fibre to the node (FTTN) or fibre to the building (FTTB) NBN connections, however, meant they could not get the speeds that were advertised.

“Optus is the second major internet provider we have taken action against for selling broadband speeds they could not deliver to their customers,” ACCC Chairman Rod Sims said.

“Worryingly, many affected Optus FTTN customers could not even receive the maximum speed of a lower-tier plan. This is a concerning trend we have seen throughout the industry and we are working to fix this.”

The issue affected a range of customers across a number of different-tiered speed plans, including:

• 5,430 (48%) Optus FTTN consumers on a 100/40 Mbps plan could not receive 100/40 Mbps, and 2,337 (21%) of those consumers could not receive 50/20 Mbps
• 1,519 (26%) Optus FTTN consumers on a 50/20 Mbps plan could not receive 50/20 Mbps
• 1,381 (3%) Optus FTTN consumers on a 25/5 Mbps plan could not receive 25/5 Mbps.

Optus has admitted that by promoting and offering speed plans that could not be delivered, it likely contravened the Australian Consumer Law (ACL) by engaging in misleading or deceptive conduct and making false or misleading representations.

Optus has provided a court-enforceable undertaking to the ACCC detailing the remedies it will provide to affected customers, including refunds, moving speed plans, discounted speed plans, and exit from contracts without paying a fee. Optus will be contacting affected consumers on or before 2 March 2018 by email or letter.

“Affected customers should carefully consider the remedies Optus is offering them to assess which best suits their needs. In some cases, consumers may consider it preferable to simply exit their contract with a refund rather than accept a service that does not meet their needs,” Mr Sims said.

The court-enforceable undertaking also requires Optus to check within four weeks of connecting a customer to a new NBN speed plan that they are getting the advertised speeds they are paying for. If it is below the advertised speed, Optus will notify the customer and offer remedies.  

“This undertaking is yet another step towards an industry standard of providing accurate information to consumers about the speeds they can achieve in real-world conditions, and ensuring that consumers get what they pay for,” Mr Sims said.

“We are continuing to investigate other retail service providers selling NBN broadband plans, and will take enforcement action if we consider that they are not delivering on their promises to customers.”

Notes to editors

The undertaking requires Optus to contact current and former customers who could not receive the maximum speed stated in their speed plan. Optus will inform these customers of the maximum speed they are able to receive and offer customers a range of options. 

Consumers who purchased an internet-only plan will be offered the option of:

• remaining on their current plan with no refund;
• moving to any lower speed plan of their choice and receiving a refund; or

• exiting their contract without cost and with a refund.

Consumers who purchased NBN as part of a bundle will have the option of:

• remaining on their current plan with no refund;
• moving to the base speed for their bundle with a refund and, where applicable, a discount for the remainder of their contract; or
• exiting their contract (including the bundle) without cost and with a refund. 

However, these bundle customers will not be offered the option of moving to a lower-tiered speed plan other than the base speed plan with Optus. 

Consumers who choose to exit their contracts and move to another provider should be aware that the maximum attainable speed may not change if they purchase an NBN internet plan from another provider.

The undertaking is available at the ACCC's public registers website.

Table 1 – Optus’s FTTN customers

Table 1 shows between 1 September 2015 and 30 June 2017, the number of Optus FTTN customers on each speed plan, and, for each speed plan, the total number of consumers who could not achieve the maximum speed of each of the speed plans Optus offers.

For example, 5,430 of the total FTTN consumers on a 100/40 Plan could not achieve 100/40Mbps (48%). Of these 5,430 consumers, 2,337 could not achieve 50/20Mbps. This accounts for 21% of total FTTN consumers on the 100/40 Plan. 

Table 2 – Optus FTTB customers

Table 2 shows, between 1 September 2015 and 30 June 2017, the number of Optus FTTB customers on each speed plan, and, for each speed plan, the number of consumers who could not achieve the maximum speed of each of the speed plans Optus offers.

For example, 248 of the total FTTB consumers on a 100/40 plan could not achieve 100/40Mbps (18%). Of these 248 consumers, 116 could not achieve 50/20Mbps. This accounts for 8% of total FTTB consumers on the 100/40 plan. 

Background

On 7 November 2017, the ACCC accepted a section 87B undertaking from Telstra for the same conduct as the Optus undertaking.

The ACCC has previously published guidance for retailers on how to advertise speeds for NBN broadband services, including clearly identifying typical minimum speeds during peak periods. The ACCC has also announced a broadband performance monitoring program to provide Australian consumers with accurate and independent information about broadband speeds.