Telstra, Optus and TPG are in hot water, with Australia’s Federal Court finding that the major telcos have made misleading statements about the maximum speeds achievable on their NBN plans. They’ll now collectively be paying AU$33.5 million in fines, as ordered by the Court.
The proceedings were brought on by Australia’s consumer rights watchdog after it found that Telstra, Optus and TPG had each made false promises to consumers in regards to how fast their speed would be on certain NBN plans.
The false statements were specifically made about NBN 50 and NBN 100 plans, with the consumers affected those on the NBN’s fibre-to-the-node (FTTN) technology – the connection type serving millions of Australians.
In one form or another, the ACCC allege that Telstra, Optus and TPG each told FTTN customers that they would be contacted if their chosen internet plan was unable to reach its promised speed.
If the FTTN customers were found to have lower-than-advertised NBN speeds, the fine print read that they could then be moved to a cheaper NBN plan, and be eligible for a refund on the plan that was not performing as promised. In its findings, the Court determined that this was not the case.
In reality, the Australian Competition and Consumer Commission (ACCC) allege that Telstra, Optus and TPG – the three biggest players in the NBN space – didn’t have, “adequate systems, processes and policies in place to ensure they would do what they said they would."
Why FTTN is the worst NBN
FTTN is a notoriously terrible connection type, as it’s made up of existing copper phone wire to make the final connection to a household from a central node in its neighbourhood. It deviates significantly from fibre-to-the-premises (FTTP) connections, which use a fibre-optic cable all the way through to connect a household to the NBN.
Consumer NBN 50 and NBN 100 plans have a cap on their maximum upload and download speeds. For instance, an NBN 50 plan has a maximum download of 50Mbps and a maximum upload of 20Mbps. For NBN 100, it’s a maximum download of 100Mbps and an upload of 20Mbps (or 40Mbps, depending on the plan).
“For some consumers on FTTN connections, their connection is not capable of supporting the maximum speeds of their chosen internet plan," said a spokesperson for the ACCC. “The actual capability of each line (i.e. the download and upload speeds a person experiences) is dependent on a variety of factors, for example the length of the copper wiring in the connection is different for each customer.”
The consumer rights watchdog further allege that the telco’s false claims affected nearly 120,000 consumers over a period of at least 12 months across 2019 and 2020.
What happens now?
The false promises on behalf of the telco giants were found to be in breach of Australian Consumer Law, with the Court ordering Telstra to cough up AU$15 million, while Optus and TPG will be required to pay AU$13.5 million and AU$5 million respectively.
The ACCC says that Telstra, Optus and TPG have each already contacted affected customers to provide refunds, though the Federal Court is requiring Optus to reach out to impacted customers again, as there was a lower uptake by Optus’ customers compared to those from Telstra and TPG.
Telstra, Optus and TPG still each state on their respective websites that FTTN customers will be contacted after connection to confirm their actual speeds. Meanwhile, we've spoken to all three of the telcos, with each confirming that they now have this capability properly in place.
If you have an FTTN connection, and you’d like to know the maximum NBN speeds available at your address, you can now enter your address on Telstra’s website to receive an estimate. In the example below, you can see that the estimated maximum download speed is between 60Mbps and 66Mbps, which rules out the possibility of receiving what’s promised on an NBN 100 plan.
