Telstra Corporation Limited - s.87B undertaking

The Australian Competition and Consumer Commission (ACCC) has accepted a court enforceable undertaking from Telstra Corporation Limited (Telstra Corp) in relation to its representations about speeds available to consumers on its fibre-to-the-node (FTTN) and fibre-to-the-building (FTTB) broadband plans supplied over the National Broadband Network (NBN) which were likely to contravene sections 18, 29(1)(b) and 29(1)(g) of the Australian Consumer Law.

Telstra Corp

Telstra Corp, among other services offered to consumers, supplies NBN broadband services to consumers under both the ‘Telstra’ and ‘Belong’ brands.

The relevant conduct

Since September 2015, Telstra Corp offered NBN services to consumers with FTTN and FTTB connections through the following speed plans:

• 100 megabits per second (Mbps) download and 40 Mbps upload;
• 50 Mbps download and 20 Mbps upload;
• 25 Mbps download and 10 Mbps upload;
• 25 Mbps download and 5 Mbps upload; and
• 12 Mbps download and 1 Mbps upload.

Telstra Corp promoted the Speed Plans online, on television, in newspapers and on radio. Telstra Corp’s promotion of Telstra Speed Plans included statements such as “Very Fast Speed Boost…can provide speeds up to 50/20 Mbps into the home” which represented to consumers that their NBN connections could deliver speeds up to the maximum speed of their Speed Plan.

In fact, Telstra Corp was not capable of delivering those speeds to many consumers, because those consumers did not have NBN connections capable of reaching those speeds.

The relevant undertaking

To address the ACCC’s concerns, Telstra Corp provided the ACCC with a section 87B undertaking which provides that, among other things:

• Telstra Corp will contact all previous and current affected consumers within four weeks via letter or email to explain the maximum speed they are able to receive, the types of remedies available and how to obtain a chosen remedy.
• The type of remedy available to a consumer will depend on the consumer’s plan. Some options for consumers will include:

• Option 1 – Change to a plan of the consumer’s choice and receive a refund for the speed boost charges.
• Option 2 – Exit the plan without cost and receive a refund for the speed boost charges.
• Option 3 – Remain on their current plan with no refund.

• Consumers who Telstra Corp has already remediated will be offered the option to move plans or exit their plan but will not be entitled to a refund.

• For the next three years, Telstra Corp will not represent that it can or will provide consumers on FTTN or FTTB connections with download and upload speeds at the maximum speeds specified in the consumer’s plan unless it also, within four weeks of the activation of a Telstra or Belong speed plan, checks the maximum speed each consumer can receive. If the maximum speed a consumer can achieve is below the advertised maximum speed of the consumer’s speed plan, Telstra Corp will notify the consumer and provide them with options to remedy the situation.

Variation to undertaking

On 6 December 2017, the ACCC accepted a variation to the section 87B Undertaking provided to the ACCC by Telstra Corporation Limited, previously accepted by the ACCC on 7 November 2017.

The purpose of this variation of the Undertaking is to amend Telstra’s obligation to display a corrective notice to affected consumers, extend the period for Telstra to contact affected consumers, and correct inadvertent errors in the Undertaking.