Optus has been fined $51,000 by the ACCC for the advertising of its HFC cable network as having “NBN-like-speeds”, although it’s the same network the government broadband rollout authority bought to provide, along with Telstra’s HFC the NBN to 34% of the country.
Optus got into trouble for ads between January and August 2015 due to the upload speed capabilities of HFC. The maximum upload speed offered by Optus on that network is 2Mbps, with only limited NBN areas achieving higher speeds. The fibre-to-the-premises NBN network speed is up to 40Mbps.
FTTP was the former Labor government’s preferred broadband network. The Coalition has focussed on a multi-technology NBN, which offers a range of speeds. The NBN finalised the Optus cable cable deal in question in December 2014.
The speed discrepancies between different technologies being rolled out by the NBN has the ACCC increasingly worried about telcos not advertising network performance capabilities accurately.
“As consumers migrate to the NBN, the ACCC’s action in this matter is a timely reminder to broadband internet providers that they must not misrepresent the performance of the services they are selling,” chairman Rod Sims said.
“While businesses may use comparative advertising to promote the superiority of their products over those of competitors, this advertising must be accurate and businesses should be able to substantiate these claims.”
As the NBN takes over the cable networks next year, with no upgrades outside of a pilot suburb in Queensland slated to be done for some time, this type of advertising, especially around upload speeds is something that will be monitored closely.
An Optus spokeswoman told Business Insider that:
“Optus has taken the following steps to rectify the issues which were identified including: writing to customers who purchased the product between 1 January and 23 August 2015; and provided an undertaking not to use the unqualified phrase ‘NBN-like speeds’ in promotions for Optus HFC cable service.”
The Optus HFC cable has already caused headaches for the government, with reports last month suggesting the network, originally rolled out in the 1990s for pay TV, may need to be rebuilt at a cost of over $375 million.
Leaked documents claimed the Optus HFC network is “not fit for purpose” and nearing the end of its life, while it claimed other parts of it are already oversubscribed and wouldn’t be able to deliver on the speeds promised by Malcolm Turnbull and his government.
These new plans would see the Optus network rebuilt with either Telstra’s HFC or fibre-to-the-node technology, which was originally planned for 38% of the network.
On top of the huge cost blowout, which is already expected to be $15 billion over budget, the NBN will be missing the rollout targets of 633,000 premises in 2017 and 2018, which will now have to wait until 2019 at the earliest to be connected.