ACCC accuses Telstra, Optus and TPG of misleading customers on NBN speeds, takes them to court

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Working from home during lockdown means Mohammad Makki needs reliable internet.

But when the university tutor tried to use NBN through his provider, TPG, he realised it couldn’t give him fast enough speeds to deliver his classes.

“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.

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 fixed line connections (known as fibre to the node), is that if a customer’s home is too far away from the street connection, or an object like a tree interferes with that connection, it can impact the speed and connection quality.

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.

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.

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.”

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.

“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 and its processes were intended to provide the correct MAS [maximum attainable speed] information to customers”.

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.

“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’re 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.”

By business reporter Nassim Khadem (Original ABC Article)