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The consumer watchdog wants NBN retailers to show 'typical speeds' -- but can't force them

JAIME REINA/AFP/Getty Images

The Australian Competition and Consumer Commission has recommended NBN retailers to start showing the “typical” minimum speed for evening peak periods when advertising and selling broadband plans.

The consumer watchdog published a guidance document for the industry on Monday, recommending significant changes to the way broadband retailers indicate speeds for their NBN plans.

However, the “best practice guide” is voluntary, with the ACCC merely encouraging the retailers to take up the recommendations.

The recommendations come on the same day Optus revealed it would look to refund customers that have bought plans based on promised speeds that can’t realistically be delivered, coming three months after Telstra handed out similar refunds.

Internet service providers currently spruik the maximum theoretical speed of their plans, which has been criticised as meaningless because very few customers would reach them and many have suffered slowdowns during the evening when most people are home and connected.

The ACCC made four recommendations retailers should follow:

  1. Instead of showing the maximum speed, start showing the “speeds at which the plans typically operate during the busy evening period”.
  2. To help customers compare, adopt a standardised labelling system for plans – basic evening speed, standard evening speed, standard “plus” evening speed, and premium evening speed.
  3. If the customer doesn’t receive the “typical” speed advertised, then fix the issue by boosting capacity, giving a refund, changing the plan, or allowing them to exit the contract without penalty.
  4. For fiber-to-the-node and fibre-to-the-basement customers, who are especially vulnerable to neighbourhood congestion, retailers should make this situation clear and provide assistance to affected customers.

The NBN now covers 5.7 million premises, with two thirds of the non-metropolitan roll out completed and a third of metro deployment done. But as the roll out accelerated this year, its performance not meeting customer expectations became a high-profile issue.

While the ACCC’s recommendations are voluntary and not enforceable, the watchdog urged retailers to adopt them amid intense public scrutiny.

“Given the significant consumer detriment currently being reported in relation to these issues, the ACCC encourages RSPs to immediately implement measures in accordance with this guide,” chairman Rod Sims said.

The guide, which updates previous versions in 2007 and 2011, was written with consultation from internet retailers, the NBN, and consumer representatives.

The Communications Alliance, an industry group representing internet retailers, admitted that peak hour performance can vary significantly from theoretical maximum speeds.

“During the busiest hours, for example, typical off-peak average speed of 10Mbps may slow significantly during busy periods (i.e. 7.00pm to 10.00pm),” it said.

The ACCC said the current marketing focus on maximum speeds, price and download quotas makes it difficult for consumers to select a reliable NBN provider.

“Advertising tends to restrict descriptions of speed to imprecise, inconsistent qualitative statements (for example, RSP-specific use of ‘quick’, ‘fast’ or ‘boost’), uses pictures of animals or athletes, or relies on statements of the speed of the underlying access (wholesale) network,” the organisation said in its guidelines.

“This makes it difficult for consumers to accurately assess and compare offers and may mislead consumers about the nature of the service they are buying, especially during busy periods (peak demand times) when most consumers will want to use the service.”

The ACCC also announced in April that it would start tracking the speeds delivered by retailers, in order put more pressure on them to do the right thing by consumers.

NBN chief executive Bill Morrow said last week the top five retailers’ customer satisfaction ratings ranged from 5.9 to 7 out of 10, indicating they had plenty of influence over what the end user experienced.

“Overall satisfaction of [each retailer’s] broadband experience can look quite different, considering it’s tapping into the same NBN access network, using the same NBN processes, and using the same NBN systems,” he said.

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