The Australian Competition and Consumer Commission (ACCC) is once again dragging three of Australia’s major telcos into the Federal Court for allegedly misleading customers about NBN speeds.
Each telco allegedly told customers it would test the maximum NBN speeds of their fibre to the node (FTTN) connections and tell them if it wasn’t as fast as promised – but they didn’t.
ACCC Chair Rod Sims said “hundreds of thousands of consumers were allegedly misled” by the three telcos which instead pocketed money for a service of a quality they couldn’t provide.
“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,” said ACCC Chair Rod Sims.
“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.
This isn’t the first time telcos have been whacked for their NBN lies.
The ACCC has been waging a veritable war against Australian internet service providers for years over misleading claims they make to consumers such as threats that their internet would be cut off if they didn’t switch to an NBN connection immediately, or claims that a paltry 10GB per month of data would be “perfect for streaming”.
It’s not even the first time this telco trio has been caught out: in late 2017 Telstra, Optus, and TPG each started offering refunds to a combined 57,000 customers who didn’t get the internet speeds they promised.
And just last month, Telstra forked out $25 million in refunds to over 50,000 customers because it didn’t inform them the NBN speeds they were paying for weren’t achievable.
Sims said he was “disappointed” the companies apparently hadn’t learned from the previous complaints.
“What makes this behaviour even more concerning is that Telstra, Optus and TPG were well aware of these issues and had earlier given undertakings to the ACCC to provide remedies to consumers who purchased NBN plans with speeds that couldn’t be delivered,” he said.
Don’t blame us, blame NBN Co
Telcos were conciliatory in their responses to the latest ACCC court action, apologising to customers for what they claim are unintentional errors.
Michael Ackland, Telstra Group Executive for Consumer and Small Business, said the issue around NBN speeds was broadly impacting the industry thanks to what he called “a complex process” which NBN Co has largely left up to retail service providers (RSPs) to navigate.
“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,” he said in a statement.
“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.”
NBN Co earned $4.6 billion in revenue in the 2020-21 financial year – a 21 per cent increase on the previous year – while also raising $8 billion of private debt.
Similarly, TPG partially leveled the blame at NBN Co with a spokesperson telling Information Age there were “two key contributing factors” for why it wasn’t able to give customers the speeds it promised.
“The first was failure by NBN Co to provide timely and accurate speed information to TPG Internet,” the spokesperson said.
“The second was anomalies in TPG Internet’s legacy processes in place since 2017, and these have been fixed post-merger.”
Optus chose to stay out of the blame game with a spokesperson telling Information Age that it is "carefully considering this matter".
"The speed that is achievable on some NBN connections can be impacted by issues including the length and quality of the copper line that connects a customer to the NBN," the spokesperson said. "Unfortunately, not all NBN connections can deliver the same speeds.
"Optus will continue to work to measure NBN speeds and inform customers of the options that are available to them."