In a stunning coup for aggrieved customers of Telstra’s NBN service, the carrier yesterday agreed to pay refunds to those who were not receiving advertised internet speeds.
Following an Australian Competition and Consumer Commission (ACCC) investigation, Telstra agreed that where customers were unable to attain its advertised NBN speeds that it was contravening consumer law.
Under the deal, disgruntled customers will also be able to ditch their Telstra contracts without penalty.
The telco told YourLifeChoices yesterday that 42,000 customers were affected. A spokesman said that those requesting a refund would receive all the money they had paid under their respective plans. So, for instance, a customer who had been on the lowest plan, $69 a month, for a year would receive $828.
The refund offer, which is court enforceable, also applies to the Telstra service Belong, and includes both fibre-to-the-node (FTTN) and fibre-to-the-building (FTTB) services.
The ACCC said the carrier offered five speed plans ranging from 100 megabits per second (Mbps) download and 40 Mbps upload to 12 Mbps download and 1 Mbps upload.
“Telstra Corp promoted speed plans online, on television, in newspapers and on radio. It’s promotion of Telstra Speed Plans included statements such as “Very Fast Speed Boost … can provide speeds up to 50/20 Mbps into the home”, which represented to consumers that their NBN connections could deliver speeds up to the maximum speed of their speed plan,” the commission said.
“In fact, Telstra Corp was not capable of delivering those speeds to many consumers, because those consumers did not have NBN connections capable of reaching those speeds.”
As part of the undertaking extracted by the watchdog, Telstra will alert all former and current affected customers within four weeks to offer the refunds.
The telco is also banned from advertising that it can provide a plan’s maximum speeds unless it checks that speed within four weeks.
ACCC chairman Rod Sims said he was “mindful this is not just a Telstra problem”.
“It is an industry problem where consumers are often not getting the speeds they are paying for.
“We will continue to investigate other retail service providers (RSP) selling broadband plans over the NBN and take enforcement action where appropriate. As we’ve said previously, we expect RSPs to provide consumers with accurate information up front about the internet speeds they can expect to receive, and then deliver on those promises.”
UPDATE: Optus is the latest telecommunications giant to offer compensation to customers who have not received NBN speeds they were promised, ABC News reported this morning.
“We are examining the detail of the announcement by the ACCC, but can confirm that Optus is taking action to provide appropriate remedies to those customers where it has been confirmed that the underlying NBN service cannot deliver the speed they signed up for,” a spokeswoman for Optus said.
Like Telstra, Optus has attributed the underlying source of undelivered speeds to NBN copper wire access – specifically for fibre-to-the-node (FTTN) and fibre-to-the-building (FTTB) connections – noting the ACCC has acknowledged the slow speeds.
Telstra and Optus coming clean over their substandard broadband services is good news for their long-suffering fibre to the node/building customers.
But it does little to calm the rest of us dreading the appearance of an NBN techie at our door.
Telstra’s mea culpa came just six days after the Australian Competition and Consumer Commission (ACCC) launched a public inquiry into the sector, the purpose of which is “to determine whether NBN wholesale service standard levels are appropriate, and consider whether regulation is necessary to improve consumer experiences”.
The watchdog does not expect to hand down any findings until December next year. In the meantime, the NBN techies keep turning up to people’s doorsteps and coercing them to choose a broadband provider or risk being disconnected.
It beggars belief that some authority or other has not stopped the forced household connections until the inquiry can get to the bottom of this ‘fraudband’ and before more consumers are made to switch.
For Telstra to freely admit that its broadband service marketing had been flagrantly outside the law is audacious beyond belief. For the ACCC to let this juggernaut off the hook without a significant penalty is a poke in the eye of consumers.
A refund is not enough. A refund does not compensate the many thousands of households and businesses that have limped along with a substandard service. A service in 42,000 instances that was more costly yet more sluggish than the internet service they had previously.
It looks like solving the broadband conundrum is going to be as slow and painful a process as the substandard service we now know at least 42,000 Aussies had to endure.
Are you connected to Telstra or Optus broadband? Will you accept a refund and move to a different provider? Can you recommend a provider who has delivered the service they promised?