The Australian Competition and Consumer Commission (ACCC) has warned Australia’s four largest telecommunications companies, Telstra, Optus, TPG and Vocus, legal action will be taken if they mislead consumers about National broadband Network (NBN) speeds.

Background

After a major push from the Federal Government, the ACCC is now investigating whether telecommunications companies have broken consumer laws by promoting and selling NBN plans with unrealistic speeds that could not be achieved. Communications Minister Mitch Fifield has given ACCC chairman Rod Sims the green light to implement a broadband monitoring program, which will test the reliability and speeds providers are offering in their plans. The program intends to provide customers with “accurate, independent and comparable information” to help them find the best deal that gives them what they actually paid for. However, the program functions on a volunteer basis.

Not-for-profit organisation Internet Australia argues the NBN has been “turned into a dud”. Executive director Laurie Patton said to the ABC the competition watchdog’s monitoring program is not enough to solve the problems behind NBN. Mr Patton said the ACCC scheme only confirms what is already know that the internet speeds are slow.

Slow NBN Speeds That Are Quick To Sell

The decision to monitor NBN speeds followed accusations retailers knew the technical capability and congestion level, which they chose not to disclose to their customers. In March, Senator Fifield detailed in a letter to Mr Sims a series of complaints about Telstra and Optus. One of the complaints was made by a Telstra user in Perth who complained his download speeds were at 0.2 Megabits when his NBN package advertised it would be up to 100 Mbps per second.

Additionally, the federal Opposition has recently lodged a Freedom of Information application to force NBN Co to release its database (which the public was refused access to) that contains maximum internet speeds for every household and business in Australia. Consumers are becoming increasingly aware they are ending up with slower internet speeds because of changes NBN made to bandwidth. Apparently, bandwidth or “CVC” charges are the biggest cause of slow speeds under the NBN. In contrast, there has been much debate about the type of connections, such as fibre-to-the-premises (FTTP) and fibre-to-the-node (FTTN).

The ACCC continues to repeatedly alert telcos against marketing NBN products based on speeds that are either unattainable at all or during a short period of time each day. Mr Sims said to the ABC the ACCC is taking a three part strategy.

  • First, to give telcos better guidance on how to advertise the actual speeds during peak periods.
  • Second, to tell consumers what the speeds are in an investigation of whether providers are telling the truth.
  • Third, to take legal action on against large telco companies before the end of the year.

The ACCC announced its main focus will be on whether large telcos committed misleading conduct, and whether they have the capacity to provide the speeds they are selling. This is because the ACCC has responsibilities under Part XIC of the Competition and Consumer Act 2010 to carry out such checks and balances.

Final Thoughts

Despite NBN complaints increasing by 120 per cent, the ACCC aims to improve consumers’ experience of the $40 million NBN this year through the introduction of tougher surveillance, and the use of legal action as leverage.

Let us know your thoughts on what you think the ACCC should do to address NBN problems by tagging us at #lawpath or @lawpath.

Fiona Lu

Fiona is a Paralegal working in our content team which aims to provide free legal guides to facilitate public access to legal resources. With an interest in information, media, consumer and employment law, her primary focus is on how technology will affect the future of the legal industry.