Telstra, Optus, TPG ‘misled NBN customers’ on broadband speeds

Australia’s biggest telcos are facing Federal Court action for underperforming broadband plans.

The ACCC is alleging that Telstra, Optus and TPG didn’t have adequate systems in place to implement the speed checks, notifications and remedies they said they would carry out.

Australia’s three largest telcos – Telstra, Optus and TPG – each allegedly breached consumer law by making false or misleading statements in their promotions of NBN plans, according to the competition watchdog, which has kicked off Federal Court action against them.

ACCC chairman Rod Sims said that with some fibre-to-the-node (FTTN) plans the telcos claimed they would test the maximum speed of connections, notify the impacted consumer of their maximum speed if their line was underperforming, and offer remedies if the maximum speed was below their plan’s stated speed.

In many cases the telcos failed to do so, he said, and they also allegedly wrongly accepted payments from some customers for NBN plans when they were not provided with the promised speeds.

“Telstra, Optus and TPG each promised to tell consumers within a specific or reasonable time frame if the speed they were paying for could not be reached on their connection,” Mr Sims said.

“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.

“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.

“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.

“We are very disappointed that these companies do not seem to have taken seriously the undertakings they gave to the ACCC.”

The regulator is alleging that Telstra, Optus and TPG didn’t have adequate systems in place to implement the speed checks, notifications and remedies they said they would carry out.

ACCC chair Rod Sims. Picture: Zak Simmonds

Both Telstra and Optus have previously been in hot water for other false and misleading statements.

Telstra, Optus and TPG have each said they will contact current and former customers who are affected to advise them if they are eligible for a refund, and offer alterative plans, or an opportunity to leave their contract without penalty.

“We are pleased that Telstra, Optus and TPG have promised to compensate consumers even before the court case is finalised,” Mr Sims said.

The Covid pandemic has highlighted the importance of reliable broadband for both consumers and businesses.

A TPG spokeswoman said the telco apologised and “will be making things right”.

“We will be contacting impacted customers to offer them the option to move down a plan and receive a refund, leave and receive a refund, or stay on their current plan.”

Telstra executive Michael Ackland said: “First and foremost we are very sorry to have let these customers down. We are managing this important and complicated issue proactively and accept that there are some things that we didn’t do right.

“We self-reported these issues to the ACCC and we’re already taking steps to make sure customers are offered remedies and our processes are improved. As we’ve seen today with Optus and TPG, this issue is not isolated to us and is happening more broadly across the industry because of a complicated process.

“Transparency around speeds is a complex topic, and one which NBN Co have left entirely to the 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 retail service providers.

“While NBN Co are promoting their ‘focus on fast’ promotional rebates they need ensure they can deliver those speeds.”

 

An Optus spokeswoman said the telco “acknowledges the ACCC‘s decision to commence proceedings today and we are carefully considering this matter.

“As acknowledged by the ACCC, we have been contacting impacted customers to offer appropriate remediation options,” she said.

“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. 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.”