ISPs to Reimburse Misled FTTN Customers

Internet Australia calls for all ISPs to follow Telstra and Optus’s recent example, examine their FTTN and FTTB customers and reimburse those unable to achieve the speeds they have subscribed to.

“With Telstra and now Optus revealing the extent of customers being misled over attainable FTTN and FTTB line speeds, we call all other NBN service providers to proactively review service speeds of customers and follow their example,” said the Chair of Internet Australia, Dr Paul Brooks.

Following increased scrutiny by the ACCC, in May 2017, Telstra outlined that almost 8000 customers on FTTN connections would receive refunds or be moved to a lower priced plan because they could not ever achieve the line speeds they had subscribed to.

In early November Telstra offered to remedy around 42,000 such customers, where almost 10,000 customers subscribed to the 100/40 Mbps plan couldn’t even achieve 50 Mbps, and over 9000 customers could not even reach the Government’s minimum line speed guarantee of 25 Mbps, due to their FTTN copper lines being too long to achieve the subscribed service speed.

Optus 3 also offered to remedy more than 8,700 customers on FTTN or FTTB lines, including almost 1400 customers who could not reach the Government’s target minimum linespeed of 25 Mbps.

“This is not actually a restriction caused by the Telstra or Optus service – this issue will be affecting a similar percentage of customers with all service providers using the NBN FTTN and FTTB technology types” noted Dr Brooks. “All service providers should follow Telstra and Optus’s lead, and proactively check each of their FTTN customers’ actual achieved line-speed, compare with the subscription plan, and work with any customer who cannot achieve their expected performance to refund and/or remedy their problem. All service providers that use an aggregator or wholesale provider rather than connecting directly to the NBN should push their wholesaler to make available the line speed data that NBN Co has for each of their customer lines.”

Internet Australia notes this is not a new revelation, and could have been avoided if the service providers and NBN Co had not decided three years ago to treat subscribers with contempt by misleading customers about the speeds their house or building might achieve.

In April 2014, in a consultation paper issued to retail ISPs (not publicly available at this time), NBN identified that selecting the correct speed plan would be “the responsibility of the end user and the provider”. As reported by journalist Renai LeMay 4 the document from NBN Co stated ”For example, NBN Co does not intend to prevent end users and/or providers from ordering the ‘Up to 100Mbps’ speed tier for a service that would typically experience speeds of less than 50Mbps”. This passing-the-buck on to the RSPs is at the heart of the refunds now being required, as only NBN Co has the data and means to match predicted line speed against the ordered speed, and could have flagged the problem at the time of each order from the service providers.

Shortly after this ACCC identified in a Senate Estimates session that NBN Co might be considered to be misleading consumers if it allowed RSPs to order speeds higher than the speed the line could actually achieve – which is exactly what has been allowed to occur.

For all new subscribers, we call on all service providers to show more respect for their new customers and consumer law, and not sell service characteristics like line speeds that the customer will never be able to achieve. Ideally all customers should be informed of the likely maximum speed they will be able to achieve prior to signing up – the data is now available from NBN Co, and some RSPs now provide a service qualification tool to staff. Failing that, all FTTN and FTTB subscribers should have their line speed reviewed by the ISP within weeks of connection, and be contacted proactively by the provider and permitted to switch to a lower cost plan consistent with their actual line-speed if there is a discrepancy.



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