TPG refunding 8,000 NBN customers for slow speeds

More than 60 percent of TPG's FttN customers on the top speed tier could not reach those speeds, the ACCC has found, with one customer unable to get even 12/1Mbps speeds while paying for 100/40Mbps.
Written by Corinne Reichert, Contributor
(Image: Screenshot by Corinne Reichert/ZDNet)

The Australian Competition and Consumer Commission (ACCC) has announced that TPG will join Telstra and Optus in refunding National Broadband Network (NBN) customers after not providing them with the speeds they were paying for.

According to the watchdog, TPG "misled" customers about the maximum speeds their lines were capable of between September 1, 2015, and June 30, 2017.

"TPG advertised its high-speed plan as 'Seriously Fast Internet. Up to 100Mbps'," the ACCC said.

"TPG has admitted that by promoting and offering speed plans with maximum speeds that could not be delivered, it likely contravened the Australian Consumer Law (ACL) by engaging in misleading or deceptive conduct and making false or misleading representations."

ACCC Chair Rod Sims said fibre-to-the-node (FttN) and fibre-to-the-basement (FttN) technical limitations meant "many" of its 100/40Mbps customers could not reach those speeds, or even half those speeds.

According to the ACCC, 62 percent of FttN customers on the 100/40Mbps speed tier could not receive those speeds, which amounted to 7,509 customers. Of those, 2,088 could not receive 50/20Mbps speeds; 144 could not receive 25/5Mbps speeds; and one customer could not even get 12/1Mbps speeds.

In addition, 2 percent of TPG's 25/5Mbps FttN customers could not reach those speeds, which amounted to 411 customers, and 12 could not reach 12/1Mbps speeds. 17 of its 12/1Mbps FttN customers could not reach those speeds.

In regards to FttB customers, 4 percent of its 100/40Mbps customers could not receive those speeds, amounting to 42 customers, and three of those could not receive 50/20Mbps speeds. Of its 25/5Mbps customers, four could not reach those speeds, and one of those could not reach 12/1Mbps. One of its 12/1Mbps FttB customers could not attain those speeds.

"TPG charged customers higher prices for the promise of faster speeds, misleading many customers into paying a premium price for a service they could not get," Sims said.

"This is the third major internet provider we have taken action against in the past few weeks. Internet service providers must take responsibility to ensure that their customers get the promised speeds that they pay for."

Under a court-enforceable undertaking, TPG will refund customers between AU$10 and AU$30 for each month they were paying for their plan, and they will be entitled to switch plans or leave their contract without exit fees. Affected customers will also be notified of the maximum speed their line is capable of.

In responding to the ACCC's NBN speed-advertising guidelines, it was last week revealed that TPG's 100Mbps plan only hits around 50Mbps during peak evening times. By comparison, Optus and Telstra have said their 100 plan hits 60Mbps during the evening, while Aussie Broadband said its speeds are between 60 and 100Mbps.

Last week, Optus also entered a court-enforceable undertaking to refund thousands of FttN and FttB customers who were sold speeds not technically possible on their NBN connection.

Over two years, Optus had sold a "Boost Max" package offering 100/40Mbps speeds; however, the ACCC said around 5,400 of all Optus FttN customers on a 100Mbps plan could not hit maximum speed, while 2,300 could not even hit 50Mbps speeds.

At the same time, 26 percent of its customers on its 50Mbps plan could not attain speeds of 50Mbps, while 3 percent of all 25Mbps customers could not reach 25Mbps.

The Optus refund followed Telstra having to refund around 42,000 customers for the same issue last month, with Sims at the time saying the ACCC was continuing to investigate other RSPs.

NBN last week set up 50Mbps as the flagship speed for its services, unveiling a new wholesale pricing structure designed to provide discounts for retailers offering services on its 100Mbps and 50Mbps speed tiers.

Under the changes, NBN's access and bandwidth charges will be bundled together across connectivity virtual circuit (CVC) and access virtual circuit (AVC) for the two top-tier plans.

The 50Mbps wholesale bundle will cost retail service providers AU$45 per month -- a 27 percent discount -- and include 2Mbps of bandwidth, while the 100Mbps wholesale bundle will be reduced by 10 percent to cost AU$65 for 2.5Mbps of included capacity.

However, NBN CEO Bill Morrow recently claimed it would not be "prudent" for NBN to provide line speed test results to customers before they sign with an RSP for service,

Instead, Morrow suggested that customers ask their RSP for speed data, who would in turn get that data from NBN, saying he doesn't want the government-owned wholesaler becoming the "data speed police".

Citing concern over rising consumer complaints, the ACCC earlier this week also kicked off its public inquiry into NBN's wholesale service standard levels to determine whether regulation, including resolutions for consumers when wholesale standards are not reached, is necessary in order to improve customer experience.

ACCC action against Optus saw proceedings begin in the Australian Federal Court last week, with the watchdog alleging that the telco misled customers about having to move from its hybrid fibre-coaxial (HFC) network to the NBN.

According to the ACCC, between October 2015 and March 2017, Optus had advised its customers in writing that they would be disconnected from the Optus HFC network within a specified period due to the availability of NBN in their area.

This constituted false and misleading representations, the ACCC has argued, because the timeframes it advised were shorter than those contractually permitted.

During the period between October 2015 and September 2016, Optus is also alleged to have misled customers about NBN plan purchase options; it "created the impression" that customers had to buy their NBN connectivity with Optus as their retail service provider, the ACCC said.

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