Almost 8000 customers who paid for national broadband network plans with TPG Telecom will be compensated after being misled about the maximum speed they could achieve.
TPG is now the third major telecommunications company to provide remediation to customers due to NBN speeds after action from the competition regulator.
Its understood other broadband providers, such as iiNet and Vocus, are under increased scrutiny.
TPG marketed its top high-speed plan 100 Mbps download speed and 40 Mbps upload speed tier as “Seriously Fast Internet. Up to 100Mbps”. The plans were sold between 1 September 2015 and 30 June 2017.
Australian Competition and Consumer Commission chairman Rod Sims said technical limitations of NBN’s fibre to the node technology meant some customers couldn’t achieve the marketed speeds.
“Some couldn’t even get half those advertised speeds,” Mr Sims said.
“TPG charged customers higher prices for the promise of faster speeds, misleading many customers into paying a premium price for a service they could not get,” he said.
Mr Sims previously warned the regulator would consider court action to deal with the “bad behaviour” of telecommunication companies.
“We will be picking this [issue] back up again with the other telcos early in the new year,” Mr Sims said.
The advertising of broadband speeds has been a major focus of the ACCC, which led it to issue guidance for internet service providers on marketing fixed-line broadband services.
This included providing information about the typical speed of plans during the busy evening period and the maximum attainable service of an NBN service when known.
TPG customers will be contacted by 2 March 2018 with information about compensation options and the maximum speed they can achieve.
Those impacted are likely to be offered the chance to move to a lower-tier speed plan with a refund, or the option to exit their plan with a refund.
These refunds would be between $10 to $30 per month they paid TPG.
Customers affected are those on plans for fibre-to-the-node (FTTN) and fibre-to-the-building (FTTB).
A total of 7509 customers of 100 Mbps FTTN customers could not achieve this speed – with 2088 of these customers unable to achieve 50 Mbps speeds.
There were 42 FTTB customers on 100 Mbps plans that could not get their paid-for speed, and 411 25 Mbps FTTN customers who could not get their speeds.
TPG no longer sells 25 Mbps plans.
TPG chief operating officer Craig Levy said promoting speed on the NBN had not been simple for any of the service providers.
“We apologise to the NBN customers that have been confused about broadband speeds, the total number of which represents less than 3.5 per cent of our total NBN subscriber base,” Mr Levy said.
“Due to the multiple NBN technologies available, TPG and other retailers have found themselves in a very difficult position because FTTN and FTTB technologies speeds are dependent on a number of factors including distance, co-existence and copper quality,” he said.
The retailers also only find out the speed a consumer can obtain after they have been activated – which is why speed was not a main focus of its TV, radio or internet advertising, he said.
“TPG has recently implemented the new ACCC guidelines which includes promoting Typical Evening Speeds as well as confirming [FTTN and FTTB] speeds after activation. We hope that the risks of such confusion will diminish.”
TPG provided a court-enforceable undertaking to the ACCC and admitted it promoted and offered speed plans with undeliverable maximum speeds for some customers, and by doing so likely contravened Australian Consumer Law.
These laws protect consumers from misleading or deceptive conduct, and false or misleading representations.
TPG will not be able to represent to customers that it can provide FTTN or FTTB customers with download or upload speeds at the maximum specified in the plan, unless it checks the maximum they can receive within four weeks of activating the plan.