Telstra failed to tell more than 6300 customers of its Belong subsidiary it switched their NBN plans to slower services – and continues to overcharge those customers by up to $7 per month, the ACCC has alleged in Federal Court action against the telco.

The change in speeds came in late 2020, when Telstra moved 8897 Belong customers from their existing broadband services, which were marketed as ‘100/40 Speed Boost’ plans and rated at 100Mbps download and 40Mbps upload speeds.

The new plan had a maximum upload speed of just 20Mbps, but the ACCC alleges that Telstra not only failed to inform its customers of that fact – but failed to change the price it was charging them, even though the new plans were costing Belong $7 less per month.

By failing to pass on these savings to customers, or even to inform them about the change, the customers were “deprived of the opportunity to make an informed decision about their internet service,” ACCC commissioner Liza Carver said in announcing the legal action.

Telstra’s general customer terms allow the company to migrate customers to an “alternative service or pricing plan”, and customers can cancel their service fee-free if they are unhappy with the change.

However, by failing to inform customers of the change, the ACCC alleges, Telstra deprived them of their rights under those service terms – and the company continued to charge them for the faster plans for nearly six months.

In March and April 2021, Telstra admitted its failure to inform customers of the change and credited 2553 customers with a one-off $90 credit.

Despite this, the ACCC argues, more than 6300 Belong customers – who signed up with the company between 1 July 2018 and October 2020 – still haven’t been informed that they are on a slower broadband plan than they are paying for.

“We expect a company of Telstra’s size and experience to take their obligations under the Australian Consumer Law very seriously” including prohibitions on misleading or deceptive conduct and false or misleading representations, Carver said.

“More than 6300 Belong customers have still not been informed by Telstra that their plan has changed to a lower maximum upload speed,” she continued.

“Telstra continues to represent to them that the Belong broadband service supplied to them has not been altered.”

Getting what you pay for?

Fixed-line broadband providers are failing to supply listed speeds during peak hours (7 to 11pm) around 10 per cent of the time, the ACCC’s latest Measuring Broadband Australia report revealed, with improvements by smaller retailers like Launtel, ACCC commissioner Anna Brakey noted, highlighting the ability for small firms to provide equitable services when they try.

In the wake of revised guidance around broadband speed claims that it published in October, the ACCC is ramping up its attention to broadband speed characteristics other than banner download speeds, with latency and upload speeds particularly coming under scrutiny.

Upload speeds have long been a contentious issue in Australia’s best-effort broadband industry, with providers regularly criticised for providing slow backchannels that have become increasingly important with the growth in video livestreaming and two-way cloud services.

Although they work to meet widely advertised headline download speeds, retail broadband providers have generally deemphasised upload performance, with an August ACCC analysis finding that download speeds were improving while upload speeds remained “substantially below maximum speed plan speeds”.

This disparity has kept Australia lagging New Zealand and other countries in terms of their overall broadband experience.

Because NBN Co doesn’t overprovision upload channels in the way that it does for download channels, retailers’ upload speeds quickly drop off during times of peak usage – causing ‘latency under load’ so significant that, the ACCC noted, it is “noticeable to users”.

Higher latency “can impact the responsiveness of real-time applications being used at the same time such as video conferencing platforms and online games,” Brakey said.

“Retailers currently state their typical download speed reductions during the peak evening hours, and we expect them to do the same for upload speeds”.

The ACCC has instructed retailers to publish the typical busy period upload speeds for their fixed services by January, and for fixed wireless services by the end of April.