The ACCC has published guiding principles on how Australian broadband providers should inform their consumers about their products’ broadband speeds, after finding that 80 percent of consumers were confused by the current language.
Six principles have been outlined following a consultation period that kicked off in July last year. The commission called for views on how consumer information about broadband speed and performance could be improved.
ACCC chairman Rod Sims said vague speed claims provided by service providers was not providing “accurate, comparable or useful information”.
“Four out of five consumers have trouble comparing broadband speeds and this is causing a high level of complaints, confusion, and dissatisfaction,” he said.
“Consumers believe they aren’t getting what they sign up for, and pay for, when it comes to home internet speeds. It is time the industry met consumer demand for accurate information about broadband speeds so consumers can compare offers and make informed decisions about their internet services.”
These six principles are:
Consumers should be provided with accurate information about typical busy period speeds.
Wholesale network speeds or theoretical speeds taken from technical specifications should not be advertised without reference to typical busy period speeds.
Information about the performance of promoted applications should be accurate and sufficiently prominent.
Factors known to affect service performance should be disclosed.
Performance information should be presented in a manner that is easily comparable by consumers, for example: by adopting standard descriptive terms that can be readily understood and recognised.
RSPs should have systems in place to diagnose and resolve broadband speed issues.
The ACCC says the principles will address the limited information consumers have access to, which they argue is raising consumer search costs, inhibiting competition and feeding into an increasing level of consumer complaint.
Complaints to the Telecommunications Industry Ombudsman about internet data speeds increased 48 percent during 2015-16, making it consumers’ largest issue that year. According to the Australian Bureau of Statistics there are about seven million fixed broadband subscribers and a further six million mobile broadband users.
The ACCC reported consumers were consistently contacting the ACCC to report internet connections not living up to promised performance. Concerns raised included purchased speed tiers not actually reaching the advertised “up to” speeds, and speeds hitting significant wells during the periods when consumers most wanted to use the service.
Consumers also complained that when issues were raised with the provider, the retailer defered the responsibility to the access network provider.
“The ACCC has listened to the views of consumers and industry in identifying the fundamental areas of concern and developing principles by which to resolve them," Sims said.
"The ACCC will now work with industry and issue more detailed guidelines to ensure they are able to use this framework to provide better information to their customers. It’s the first step of a longer-term plan to bring about meaningful change.
“Greater transparency around broadband speeds will enable consumers to make clearer comparisons on product choices, further encourage ISPs to compete on speed and save consumers money.”
According to the ACCC, the 2016 consultation yielded more than 400 responses, including 19 submissions from network owners and operators, broadband service providers, consumer advocates, IT service providers and more that 390 consumer responses.
Notable responses collated in September include submissions from Optus and Telstra, who appeared to show support for updated guidelines, as did NBN Co in its submission. TPG Telecom was hesitant to encourage regulation but suggested the ACCC undertake its own education campaign and provide guidelines on the difference between “access connection speed” and throughput speed.