Telstra to offer NBN customers compensation after ACCC finds it couldn't hit top advertised speeds

- November 8, 2017 2 MIN READ
Rod Sims, ACCC

Telstra is set to compensate 42,000 customers who paid for “speed boosts” on its National Broadband Network (NBN) plans after the Australian Competition and Consumer Commission (ACCC) found the telco was not capable of delivering the specified maximum speeds in “real-world conditions”.

According to the ACCC, Telstra was offering services including a “Super Fast Speed Boost” between September 2015 and November 2017 which advertised download speeds of up to 100 megabits per second (Mbps) and upload speeds of up to 40 Mbps.

However, limitations on both fibre to the node (FTTN) and fibre to the building (FTTB) connections meant that thousands of customers were not seeing these speeds.

Rod Sims, ACCC chairman, said, “In essence, people were paying more to get higher speeds that they just weren’t able to get.”

The ACCC stated that Telstra had approached the body about issues relating to a portion of the affected customers, with the ACCC investigation then finding more.

The investigation found 56 percent, or almost 26,500, of FTTN customers on the 100/40 Mbps plan couldn’t receive this speed. Of those, 9,606 could not receive 50/20 Mbps, the second tier speed plan.

Meanwhile, 45 percent, or over 6,300, FTTN customers on a 50/20 Mbps plan couldn’t receive this speed, and two percent, or over 9,300, of FTTN customers on a 25/5 Mbps plan couldn’t receive 25/5 Mbps.

While pleased that Telstra proactively reported this problem to the ACCC, Sims said the ACCC is mindful that “this is not just a Telstra problem”.

“It is an industry problem where consumers are often not getting the speeds they are paying for,” he said.

According to Sims, the issue around broadband speeds is two-fold.

Firstly, there is the problem of a connection not being capable to deliver the speed that has been sold; then there is an issue where speeds can technically be delivered, but the internet service provider (ISP) hasn’t purchased enough capacity from NBN Co to provide the speeds it’s advertising to customers, especially at peak times.

For this second problem, the ACCC is “urging” all ISPs to advertise the typical or average speeds customers should expect in the busiest periods, between 7pm and 11pm.

“Our message to retailers is that if you advertise a particular speed and customers cannot get that speed, you will risk breaching the Australian Consumer Law,” he said.

With the ACCC handing down its findings, Telstra must now contact current and former customers affected, informing them of the maximum speed they are able to receive and offer those who haven’t already been remediated options.

These options include a costless exit from their contract and a refund, moving to a different speed plan and receiving a refund, or remaining on their current speed plan and not receiving a refund.

Image: Rod Sims. Source: beefcentral.

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