RSPs should advertise based on busy evening speeds: ACCC

Broadband providers should package and advertise their fixed-line services along the lines of evening peak speeds, according to the latest guidance from the Australian Competition and Consumer Commission (ACCC).

The ACCC’s Broadband Speed Claims: Industry guidance [PDF], published on Monday, outlines four overall guidelines for retail service providers (RSPs) of fixed-line National Broadband Network (NBN) services or similar to follow when advertising their broadband speeds in order to improve accuracy and prevent misleading claims.

Included in these guidelines is that RSPs should advertise the speeds typically experienced during “the busy evening period”, and utilise a labelling system outlining the “typical busy period speed” in the categories of basic evening speed, standard evening speed, standard plus evening speed, and premium evening speed.

The basic evening speed category would apply to 12/1Mbps NBN Ethernet Bitstream Service (NEBS); standard evening speed would involve 25/5Mbps NEBS plans with 15Mbps minimum speeds during typical busy periods; standard plus evening speed would be for 50/20Mbps NEBS services with a minimum busy period speed of 30Mbps; and premium evening speed would be for 100/40Mbps NEBS services with a minimum of 60Mbps.

The guidelines also stated that RSPs should take steps to provide relief for consumers who cannot attain the speeds their selected plan typically operates at due to their network connection, including through refunds, reductions, plan changes, and contract exits without penalty.

Lastly, the ACCC said RSPs should ensure that marketing and product descriptions for any fibre-to-the-node (FttN) and fibre-to-the-basement (FttB) services should “include clear and prominent disclosure” where there is “clear potential” for certain consumers to not attain typical plan speeds, along with point-of-sale and post-sale information and assistance on this.

According to the ACCC, its updated guidelines provide more detail on implementing its six principles on broadband speed advertising: To provide consumers with accurate information on peak speeds; to avoid advertising wholesale or theoretical speeds; to provide accurate information about the performance of promoted apps; to disclose factors known to affect service performance; to present the information in an easily comparable manner; and to have in place the systems to diagnose and resolve speed issues.

“In accordance with the principles, the ACCC considers the prevailing practices of describing and promoting broadband plan speeds using ideal, theoretical, and non-busy conditions, and/or using ambiguous, RSP-specific descriptors of ‘speed’ should be discontinued,” the ACCC said.

It added that RSPs should provide consumers with “good quality information about their particular service and its speed and performance characteristics” and “prompt and effective remedies in the event that their particular service does not meet the typical performance of the service as it was promised to them”.

The Australian Communications Consumer Action Network (ACCAN) welcomed the guidelines, saying the ACCC’s new “informative labels” for evening speeds would clear up customer confusion on which services to order.

“At the moment, consumers are unable to tell what speed they can expect from a service during busy periods,” ACCAN CEO Teresa Corbin said.

“The ACCC’s advice to RSPs to focus their marketing on speed performance during busy periods will help consumers to know what speeds their services will actually deliver during peak times.”

While the guidelines are not compulsory, the ACCC has advised that RSPs should implement the principles within three months so as not to risk breaching Australian Consumer Law.

The guide will be reviewed in 12 months, with the ACCC to monitor compliance during that time.

The ACCC had in February published its first set of broadband speed guidelines, saying RSPs should provide accurate information on speeds consumers will likely see during peak times without referencing wholesale network speeds or theoretical speeds, and disclosing any mitigating factors. It also said information should be comparable between RSPs, and diagnostic systems installed to resolve any issues.

This followed the ACCC in 2015 suggesting monitoring broadband services in an effort to encourage competition and aid consumers in making more informed purchasing decisions, with a discussion paper released in July 2016.

During consultation last year, Australia’s RSPs spoke out against the proposal, saying many of the factors affecting speed fluctuation are out of their control — for instance, loss in quality caused by the type of technology being used, backhaul capacity, end-user hardware, Wi-Fi or cabling within a consumer’s premises, and the performance of remote servers.

In June, the ACCC also put out the call for voluntary participants in its NBN speed monitoring program, through which it will install hardware on home connections across 4,000 premises that are connected to fixed-line NBN services.

The program will enable the ACCC to determine which provider is responsible for any speed or congestion issues — NBN’s wholesale network or retailers that have not bought sufficient capacity — with the devices to collect real-time data on speeds being experienced by users throughout the day.

The government had announced in April that it would be providing AU$7 million in funding over the next four years from July 1 to ensure that the ACCC is able to implement the NBN speed-monitoring program.

“Performance information is a key factor for consumers when purchasing plans from a retail service provider. The government acknowledges that this will be vital as demand for data grows,” Communications Minister Mitch Fifield said at the time, despite previously saying that NBN was being unfairly criticised over misleading speed claims being made by RSPs.

NBN also added speed information to its website in order assist customers in choosing what speed tier is most suited to their needs, as well as what may be affecting their broadband speeds — and whose fault it likely is — in May.

According to NBN, the information was to improve customer experience by “reducing confusion regarding the different roles NBN and the retailers play in building and delivering broadband services”.