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(AUSTRALIA) ACCC REPORT: Accusses Telstra, Optus and TPG of misleading customers on NBN speeds, takes them to court #AceNewsDesk report

#AceNewsReport – Aug.25: About 400,000 residential broadband customers moved to higher speed plans in the June 2021 quarter as the recent trend of Australian consumers upgrading to faster NBN connections continued, the ACCC’s latest NBN Wholesale Market Indicators Report reveals…

#AceDailyNews says but people trying to use NBN through his provider, TPG, realised it couldn’t give fast enough speeds to deliver whats needed …..ABC has developed an internet connection widget which shows how your connection compares to other options in terms of speed, reliability and cost.

Working from home during lockdown means Mohammad Makki needs reliable internet: It was frustrating because I could not communicate,” he said.

“I had to apologise every day to students for a week or two that, ‘Sorry, this is happening. Sorry, there is a problem with the internet.'”

Mr Makki was angry that telecommunications retailers advertise high speeds that they can’t deliver.

He moved house to Figtree NSW earlier this year and had wanted to carry over his fixed-line service with retail provider TPG.

The retailer was advertising speeds of 100Mbps for an NBN plan. But Mr Makki was dubious about the speed being delivered.

“I ran a couple of speed tests [online] over a couple of days. And it [the result] was consistent – it was only 8 Mbps and it was not good.”

Mr Makki spent much time speaking to his provider and eventually had NBN workers visit his premises to confirm the same — the speed was slower that what he was promised.

ACCC report
The ACCC has been measuring NBN speeds offered by retailers and they have not stacked up.

NBN Co said before connection it would “estimate the line speed that should be attainable at that property”.

“And once each property is connected to the NBN network, NBN Co updates internet retailers on the actual performance observed.”

As Mr Makki discovered, the problem with many fixed-line connections under the fibre-to-the-node model is that if a customer’s home is too far away from the node it can impact the speed and connection quality, which also can be affected by the condition of the copper wire going to the home.

Mr Makki has chosen to leave his provider, and instead opt for a wireless connection that relies on a 4G mobile signal.

But there are hundreds of thousands of Australians who have slow internet after signing up for fixed-line NBN connections.

This is why Australia’s consumer watchdog, the ACCC, is taking Telstra, Optus and TPG to court, alleging they misled hundreds of thousands of consumers over NBN speeds.

If it succeeds, the companies could each be forced to pay millions of dollars in fines.

Who checks NBN speeds?

Despite the $60 billion investment in NBN Co, Australia lags far behind the world’s best in broadband speeds, ranking at number 53 on the Speedtest Global Index.Now the NBN rollout is complete, what comes next?

Government declared the rollout was complete late last year. But some Australians remain unhappy and confused about what happens next.

While speeds being provided to customers are improving, complaints about slow speeds and lack of connectivity ran high at the start of the pandemic

The Telecommunications Industry Ombudsman found that in 2019-20 more than one-third of complaints lodged with the ombudsman were related to issues around internet service (42,883 complaints making up 33.7 per cent of all complaints about telcos).

More than 19,000 were specifically NBN issues.

Mr Makki’s main frustration is that, rather than retailers and the NBN Co working together to help consumers, they are leaving these issues for consumers to sort out themselves.

“I shouldn’t have to pursue this myself,” Mr Makki said.

“I shouldn’t have to pursue with TPG, I shouldn’t have to pursue with NBN. That’s their responsibility to make sure that if I pay for something, I get what I pay for.

“If they don’t [provide the speeds promised] they should face the consequences, they should pay the penalty.”

‘Disregard for consumers, disregard for the law’

Hefty penalties could be on the cards if Australian Competition and Consumer Commission (ACCC) boss Rod Sims gets his way.

Rod Sims standing in a park in Vaucluse during NSW lockdown.
ACCC chairman Rod Sims is seeking court penalties against the three telcos. (Adam Wyatt)

The consumer watchdog alleges the three telcos had promised some customers they would test line speeds and offer remedies such as cheaper plans with refunds, but had failed to do so.

Mr Sims said the companies would be taken to court for making alleged false or misleading representations in their promotion of some 50Mbps and 100Mbps NBN plans, in breach of the law.

“The misleading element was that they told consumers they would do something — that is, check the line and offer them a remedy if it couldn’t provide the service they were paying for — and they did not do that.”

Mr Sims said he understood the telcos were getting a service off NBN, but argued “they are the ones providing the service to the consumers”.

“They are the ones making promises to consumers that they didn’t keep. I should also add that we were onto this activity in 2017,” he said.

“Rather than take litigation action [at the time], then they gave us an undertaking that they would do all these things.

“They freely gave that undertaking, and then not to do it, I think shows a disregard for their consumers, and frankly, a disregard for the law.”Australia’s internet options compared

The ACCC also alleged Telstra, Optus and TPG wrongly accepted payments from certain customers for NBN plans when they were not provided with the promised speeds.

The telcos have started offering remedies to affected customers, including compensation or a chance to change to a new plan or provider.

Mr Sims said he’s pleased the telcos are providing their customers remedies, but remained firm that it’s also time to send the telcos a message.

“We need penalties [imposed], so that they [the three telcos] don’t do this again, and as a message to others,” he says.

“This is a very concentrated industry. These are the three main players by far in that industry and I think that probably means that they are fairly comfortable and not trying to please their customers as much as you would in a more competitive market.

“The message we want to send is, ‘do what you say you’re going to do. Look after your customers and adhere and take seriously the Australian Consumer Law.'”

Telcos want to work more closely with NBN Co on speeds

The three telcos have apologised to their customers, but have argued that the issue of speeds was complex and NBN Co had left it entirely to retailers to sort out.

Telstra chief executive Andy Penn told The Business earlier this month that his company did not deliberately try to mislead customers.

Andy Penn defends Telstra saying his company 'do more than anybody to keep regional Australia connected'
Telstra chief executive Andy Penn says the retailer did not deliberately try to mislead customers.(News Video)

“There’s more of a problem in the process in the industry rather than anybody I think deliberately seeking to mislead customers,” Mr Penn said.

“The practical reality is that when an RSP (retail service provider), such as Telstra or one of our competitors, sells an NBN service to a customer, we are not able to know what the speed is. We then have to connect the customer and then at that point … we’re able to determine the speed that’s available.

“And if it’s less than what the customer was advertised in the speed plan, we then go back to that customer and give an opportunity for the customer to change their mind or give them a credit.

“There’s a lot of to-ing and fro-ing and we don’t always get it right. And it’s not deliberate.

“But if we could fix up that process so we knew what the speed was in the first place — we would need to be able to work closely with the NBN to be able do that – then it will eliminate this issue within the industry.”

An Optus spokeswoman said speed achievable on some NBN connections could be impacted by “issues including the length and quality of the copper line that connects a customer to the NBN” and that “unfortunately, not all NBN connections can deliver the same speeds.”

A TPG spokeswoman said there was “no intention whatsoever by TPG Internet to avoid its obligations”.

“The decision to make telcos responsible for the failings of the NBN was flawed from the start,” she said.

“The fact that Telstra, Optus and TPG Internet have all experienced the same issue points squarely at the fundamental problems with the NBN.

“That is why we have decided to focus on offering 4G and 5G fixed wireless services using our own mobile network as an alternative to NBN services.”

Call to stop the ‘finger-pointing’

Australian Communications Consumer Action Network (ACCAN) spokeswoman Melyssa Troy said the finger pointing between retailers and NBN Co needed to stop.

“Consumers are just frustrated about not getting a product that they’re paying for,” she said.

Melyssa Troy on her laptop at the park looking at a report her organisation did on consumer complaints.
Australian Communications Consumer Action Network (ACCAN) spokeswoman Melyssa Troy says better consumer protections are needed. (Adam Wyatt.)

“We need better protections when it comes to fault repairs and timeframes, and when it comes to getting consumers connected to the NBN in the first place, and making sure that consumers can get the speeds that they’ve paid for.”

She said when the refunds are issued by NBN, they currently go to the retailer to pass on to the consumer.

“But there’s no obligation for the telcos to pass that on to you the consumer,” she said.

“If you have an NBN technician who doesn’t show up for an appointment, the telco gets the refund, but there’s no guarantee that they have to pass that through to you [the customer].

“If we have good consumer protections in place, then we can get to a place where broadband products are affordable and reliable for consumers.”

More consumers take up faster NBN plans

About 400,000 residential broadband customers moved to higher speed plans in the June 2021 quarter as the recent trend of Australian consumers upgrading to faster NBN connections continued, the ACCC’s latest NBN Wholesale Market Indicators Report reveals.

The report, released today, looks at the wholesale market for NBN services in which retail service providers purchase access to the NBN so they can supply broadband internet to consumers and businesses.

Consumers and businesses increased their take-up of higher speed services of 50Mbps or above in the June quarter. Almost three-quarters of all NBN wholesale connections are now at speeds of 50Mbps or above, including 17.3 per cent of all services at speeds of 100Mbps or above.

“Most broadband customers are now using higher speed tiers and that is a result of more retail providers and NBN promoting higher speed plans,” ACCC Commissioner Anna Brakey said.

“NBN Co’s incentives for retail providers, such as its ‘Focus on Fast’ promotion, have been welcome as many Australians work and study from home.”

“Retailers may revert to standard pricing for premium services once a promotion ends, and we urge customers to monitor their usage to make sure that their service meets their ongoing needs,” Ms Brakey said.

Retail service providers acquired significantly more bandwidth over the June quarter, up 9.2 per cent, which resulted in total Connectivity Virtual Circuit (CVC) acquired per customer increasing from 2.54Mbps to 2.74Mbps. The amount of bandwidth acquired is one of the key factors that impact customer experience.

“We are pleased that retail providers are acquiring additional capacity to support network demand and keep consumers connected,” Ms Brakey said.

“The ACCC will continue to monitor CVC to see what effect the end of the ‘Focus on Fast’ promotion has on it.”

Wholesale market shares for the four main retail service providers remained fairly stable in the June quarter. Of the smaller retail providers, Aussie Broadband continued to make strong gains and accounted for 26 per cent of the wholesale services added in the quarter, lifting its market share to 4.7 per cent.

Further information, including time series data, is available on the ACCC website at NBN Wholesale Market Indicators

Background

The ACCC’s Wholesale Market Indicators Report contains information on NBN’s provision of services to retail service providers. It does not report on the services supplied by retail service providers to end users.

Retail service providers use the NBN’s wholesale access service to supply retail services to their own customers or, alternatively, to supply a wholesale service to another (usually smaller) retail service provider.

Most small retail service providers do not directly connect with NBN Co, instead reselling services that they buy from larger providers (such as Telstra, TPG and Optus).

Change in speed tiers December 2017 to June 2021*TC4 AVCs12Mbps25Mbps50Mbps≥100MbpsDecember 20171,022,4941,884,662158,959400,848Low/high speed83.8%16.2%June 2021968,6441,165,1704,585,8631,451,104Low/high speed26.1%73.9%

*NBN ‘Wireless Plus’ services (2.4%) are excluded from the table, as they cannot be categorised by speed tier.

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