ACCC Launches Public Inquiry Into Broadband Speed Claims
Friday 29 July 2016 @ 9.24 a.m. | Legal Research | Trade & Commerce
It has been revealed that the Australian Competition and Consumer Commission (ACCC) has launched a public inquiry into why internet companies cannot deliver advertised broadband speeds.
The consumer watchdog is asking the public what information would be most useful when choosing a new internet plan for fixed and mobile services, with slow data speeds the highest growing area of consumer complaints.
It has called on the industry to explain why it:
- cannot always deliver promised speeds;
- whether the industry is prepared for the popularity of subscription video streaming; and
- what performance promises they could make about mobile broadband speeds.
Background to the Inquiry
The ACCC observed that broadband retail service providers (RSPs) have generally been slow to provide consumers with information that readily identifies the performance and speed characteristics of fixed broadband services and plans and that a lack of accurate information increases the likelihood that consumers will misunderstand or be misled about the quality and capabilities of the broadband options available. It also limits a consumer’s ability to select the most appropriate service for their needs and reduces the incentives for RSPs to compete on performance.
The ACCC is also concerned that advertising just the potential maximum speed, such as "up to 100 megabits per second [Mbps]", might mislead or
"misrepresent the speeds that the retail broadband service can consistently achieve, especially during peak periods when most consumers will want to use the service".
There is also concern that consumers paying for premium speed packages may not receive the more expensive speeds at all times of day because of network congestion and high video volumes.
Comment from the ACCC
The ACCC Chairman Rod Sims, said:
“Consumers are entitled to expect clear and accurate information about broadband services. At the moment, it is difficult for consumers to access accurate information as broadband advertising is not focusing upon speed and performance. Consumers are being presented with little information or vague claims like ‘boost’ and ‘fast’, or just pictures in advertising of athletes or animals.”
Complaints to the Telecommunications Industry Ombudsman
According to the ACCC, in the first quarter of 2016, there were over 2000 issues reported to the Telecommunications Industry Ombudsman (TIO) about slow data speeds.
This figure made speed the most common internet complaint issue, and more consumers contacted the TIO about internet complaints than any other issue.
Purpose of the Discussion Paper
The ACCC’s Discussion Paper is calling for submissions on how information about broadband performance and speed can be improved, including views about factors that may be inhibiting retail service providers from presenting this information.
The ACCC is also interested in views on whether similar issues are arising in the marketing of mobile broadband services.
Previous Prosecutions
In 2011, the ACCC successfully prosecuted Optus for advertising "supersonic" speed packages that throttled speeds to below 1 Mbps once consumers exceeded a data allowance. Optus was fined $5.2 million, but had this reduced to $3.6 million on appeal. The ACCC also released an information paper warning Telcos about advertising big speed and data claims that were undone by fine print conditions.
How to make a submission
Interested parties can upload a submission or complete the online consumer questions in response to the issues raised in the discussion paper or consumer information paper. Further information on how to make a submission is available in the Discussion Paper.
TimeBase is an independent, privately owned Australian legal publisher specialising in the online delivery of accurate, comprehensive and innovative legislation research tools including LawOne and unique Point-in-Time Products.
Sources:
Consumer watchdog launches inquiry into broadband speed claims – smh.com.au
ACCC calls for better broadband speed information – delimiter.com.au
