Telstra, Optus and TPG have been taken to court by the Australian competition watchdog, accused of charging customers for download speeds their national broadband network connections could not provide.
The Australian Competition and Consumer Commission (ACCC) has lodged three separate proceedings against the companies, alleging they made false or misleading representations promoting 50 and 100 megabit-per-second (Mbps) plans to NBN customers on fibre-to-the-node (FTTN) connections.
With FTTN technology – the preferred method of connecting people to the NBN under the Coalition government’s multi-technology mix model – the speed achieved on the service depends on the quality and length of the existing copper line that runs from the node on the street into a home.
The ACCC regularly measures NBN speeds across the country, and its June report found FTTN users on 50Mbps plans had an average download speed 6Mbps lower than other technologies, while 100Mbps users had average download speeds 16Mbps lower than other technologies.
The ACCC alleges the companies told customers on FTTN connections they would test the speeds, notify customers if the maximum speed was not met, and offer remedies, but then failed to do so for many of those customers.
The regulator has also alleged the three companies wrongly accepted payments for people on higher-speed plans when they could not achieve those speeds.
“Telstra, Optus and TPG each promised to tell consumers within a specific or reasonable timeframe if the speed they were paying for could not be reached on their connection. They also promised to offer them a cheaper plan with a refund if that was the case. Instead, we allege, they failed to do these things, and as a result many consumers paid more for their NBN plans than they needed to,” ACCC chair Rod Sims said.
“Collectively, hundreds of thousands of consumers were allegedly misled by these three big internet providers, Telstra, Optus and TPG, which accepted payments for NBN speeds they could not provide.”
In 2017, the three companies signed undertakings with the ACCC to check the maximum speeds on customers’ NBN services and offer remedies to those who weren’t able to get the speeds they were paying for.
Telstra told customers it would test their speeds 21 days after connection, while TPG said it would check three weeks after activation, and Optus said it would offer options if speeds weren’t met.
Telstra and TPG both placed some of the blame squarely on NBN Co.
Telstra’s consumer and small business group executive, Michael Ackland, said Telstra self-reported the issues to the regulator, and has begun offering remedies to customers, but it has been a complicated process.
“Transparency around speeds is a complex topic, and one which NBN Co have left entirely to the RSPs [retail service providers], without providing the tools and information customers need so they know what to expect before they connect. At the point of moving across to the NBN for the first time, the speed a customer can get at their premises is unknown – by both the NBN Co and the RSP.”
“In most cases, if NBN Co sells an RSP a connection that fails to deliver the speed the customer wants, and the RSP has paid for, the RSP is left to wear it. The customer doesn’t receive what they want, the RSP still pays full price, and NBN Co have limited obligations to do anything about it and continue to charge RSPs for a plan they know the connection may not deliver.”
A TPG spokesperson blamed anomalies in its legacy systems as a result of mergers and NBN Co failing to provide timely and accurate speed information to TPG.
TPG has promised to provide notices to customers on speeds, and a refund.
An Optus spokesperson said it was considering the court action, and had been in contact with customers impacted to offer remediation options.
Guardian Australia has sought comment from NBN Co.
The ACCC is seeking penalties and injunctions as part of the cases.
NBN Co is in the process of upgrading millions of homes in the FTTN footprint to full fibre connections where people are seeking faster speeds, as part of a $3.5bn network improvement.
