ACCC cracks down on NBN plan advertising


The Australian Competition & Consumer Commission (ACCC) today has announced new guidelines for NBN retailers on how to correctly advertise broadband speeds.

The new guideline stipulates that internet service providers (ISPs) clearly identify typical minimum speeds during peak periods. These peak periods, as the ACCC has acknowledged, are times between 7pm and 11pm.

These guidelines apply to ISPs themselves, and not NBN Co – the company that wholesales the national broadband network to retailers.

Peak periods are often when users see drastic slowdown from the maximum advertised on their NBN plan, which ACCC Chairman Rod Sims said is a major problem.

“Currently around 30 per cent of NBN customers have been sold low-speed plans, with many not realising their internet speeds may not be any better – and in some cases worse – than existing ADSL services,” Mr Sims said.

This comes down to retailers inadequately provisioning bandwidth to handle peak demand. Instead, the ACCC has created labels to give a better indication as to what speeds customers can realistically expect.

The suggested labels are:

  • Basic evening speed
  • Standard evening speed
  • Standard plus evening speed
  • Premium evening speed

This moves away from the ‘up to’ speed indication providers currently use, which Mr Sims said can be misleading.

“It is not acceptable to advertise an ‘up to’ speed claim, as this can give the false impression that speed advertised is achievable at most times, including during the busy period,” Mr Sims said.

Currently, the four NBN speed tiers available to consumers are:

  • NBN 12 – Up to a 12Mbps download speed, and 1Mbps upload
  • NBN 25 – Up to 25Mbps download and 5Mbps upload
  • NBN 50 – Up to 50Mbps download and 20Mbps upload
  • NBN 100 – Up to 100Mbps download and 40Mbps upload

These speed tiers advertised the maximum speed tier available, which may change depending on how much bandwidth retailers purchase and what time of the day it is. Peak periods such as between 7pm and 11pm often see drastic slowdown, according to the ACCC.

“In some cases it is not clear from the advertisements what sorts of internet speeds consumers can expect at all,” Mr Sims said.

The guidelines, however, are voluntary – meaning ISPs do not have to adhere to them. The ACCC stated this could be a good thing, as it promotes transparency.

“It provides a strong benchmark against which the ACCC, and more importantly the community, will judge the advertising of retailers. The ACCC will also be closely monitoring retailer compliance with the Australian Consumer Law,” Mr Sims said.

On top of clearer labelling, the ACCC has also stated that ISPs should provide remedies to customers who cannot obtain typical operating speeds. These remedies would include billing refunds and reductions, supplying a more appropriate plan, or offering customers the opportunity to exit contracts without penalty.

As the NBN rolls out across the country, more customers are signing up and choosing advertised speeds, which the ACCC says can give false impressions. Over 5.7 million premises are ready for the NBN, and 2.4 million have signed up for NBN retail products. This move is an unusual one for the ACCC, which usually does not suggest standards in advertising, but was determined a necessary step because the NBN is going to be unavoidable for most Australians in the coming years.

“Such a step is necessary because the current advertising around NBN products is poor, which is unacceptable in the context of a forced migration to the NBN,” Mr Sims said.

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