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Groundhog Day! ACCC again calls for truth in broadband advertising

100 Mbps? Call it the 60 Mbps customers might actually experience at peak hour

The Australian Competition and Consumer Commission (ACCC) has fired off its latest salvo in its decades-long argument with the telco industry about internet speed claims in Australia, telling them to advertise typical speeds rather than theoretical maxima.

Ever since people complained the 56 Kbps modems of the 1990s didn't seem to hit their rated speed very often, the ACCC has told advertisers that a theoretical maximum speed is no way to advertise services.

The advent of the National Broadband Network has made speed claims a hot topic yet again: retail service providers, who complain they're under a financial squeeze, are under-provisioning their backhaul capacity and consumers are complaining that their services don't hit the speeds they think they're buying.

As ACCC chairman Rod Sims told the Australian Broadcasting Corporation, the advertising used by retail service providers is “pretty dreadful”.

Sims reckons with nearly 30 per cent of NBN customers signing up at the lowest speed tiers (12 Mbps or 25 Mbps), it doesn't take much loss of performance for them to take a step down when they churn from ADSL services to the NBN.

The “typical” speed tiers the ACCC suggests would be below 15 Mbps, 15 Mbps, 30 Mbps, and 60 Mbps (instead of the NBN's wholesale tiers of 12 Mbps, 25 Mbps, 50 Mbps, and 100 Mbps).

“Many other NBN customers, while on higher speed services, experience lower than expected speeds during busy periods due to under provisioning of capacity by their retail service provider,” he told the ABC.

So the ACCC – surely with a weary sigh after so many years – has issued advertising guidance for retailers, the result of yet another round of industry and user consultation, and its third such guidance in a decade (it previously told the industry to tell the truth in 2007 and 2011).

The document [PDF] gives retailers “four key guidelines” they should follow:

  • Tell people what speeds they can expect in peak hours;
  • Adopt standardised labelling for “typical busy period speed” for their plans;
  • Provide remedies for customers who don't even get those “typical” speeds; and
  • Provide “clear and prominent” disclosures to customers connected on NBN fibre-to-the-basement/fibre-to-the-node infrastructure, where there is a “clear potential for some consumers to not receive typical plan speeds”.

The ACCC decided to pick from 7pm to 11pm as the notional busy period, and in this discussion of its consultations [PDF], it explains how the “typical speed” could be arrived at:

The methodology adopted in the Guide allows a mean value to be used in order to calculate the typical speed for the broadband plan during each busy hour in the sample period. The third lowest of these hourly measures over the fourteen day sample period is then identified and used to select an appropriate speed label.

The competition regulator suggests RSPs pay better attention to the wholesale performance they receive, particularly when they buy wholesale services from multiple providers.

The document doesn't mention sanctions, but will be reviewed in 12 months to see if it's having an effect. ®

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