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Can't say superfast: ACCC tells misleading telcos to lawyer up

Australian Competition and Consumer Commission chairman Rod Sims has said he expects to be taking telcos to court over misleading claims on broadband speeds.
Written by Chris Duckett, Contributor

The Australian Competition and Consumer Commission (ACCC) has said Australian broadband consumers are not getting even basic information on the connections they are buying, and as the nation is making the transition to the National Broadband Network, there has never been a more important time to get it right.

In a speech to the Unwired Revolution Conference, ACCC chairman Rod Sims said the commission was investigating misleading conduct in relation to broadband speed advertising that falls foul of consumer laws.

"We expect to have cases in court before the year is out," Sims said.

"What we want to see is retailers moving away from unhelpful and easily misconstrued claims like 'up to', 'boost', and 'superfast', and from advertising and/or providing information about theoretical maximum speeds that are based on wholesale inputs.

"We want to see consumers presented with information based on the realistic speeds they can expect to experience, particularly during busy periods. Not just best-case scenarios."

Sims said the ACCC would be releasing guidance to industry about truth in advertising, after which it would be making "compliance sweeps", and taking enforcement action if needed.

The ACCC chairman also said retailers had struck out at claims from NBN CEO Bill Morrow that Australians are not interested in taking up the higher speed tiers NBN offers.

"The fact is, NBN already offers a wholesale 1Gbps product to retail service providers (RSPs), which RSPs can make available to more than 1.5 million homes, and has been on sale for around four years," Morrow said in February.

"Currently, there are no retail 1Gbps speed plans on offer from the retailers. This is, in our opinion, because there is still minimal consumer demand for these ultra-fast speeds -- especially at the prices retailers would have to charge for them."

Speaking on Thursday, Sims said ISPs laid the blame at the feet of the connectivity virtual circuit (CVC) charge.

"For RSPs the answer was clear. The general view we heard (from both large and smaller RSPs) was that with current CVC pricing, many were reluctant to sell these services," Sims said.

"That is, far from consumers not wanting higher speeds, RSPs were often not seeking to sell them, at least not at prices consumers are willing to pay. We heard their view that AU$60 per month is the average price point in the market for NBN services."

Sims said some retailers felt the CVC was more suited to a pure fibre to the premises network, where speed tiers could be guaranteed, something that is not possible under the multi-technology mix NBN that embraces fibre to the node.

"It is not clear that this is the case, and we will explore this claim further as we consider NBN's current SAU [Special Access Undertaking] variation."

The ACCC made a draft decision in March to reject NBN's proposed SAU variation, saying one of the amendments may provide the company with too broad a power, causing uncertainty over whether it is reasonable and protects users.

On the topic of TPG's entry into the mobile market, Sims said it will be great for customers, and expects TPG to sign a roaming agreement with one of the existing mobile players.

"TPG doesn't need a network covering 99 percent or even 97 percent of the population to be competitive," he said. "What we see is that TPG has the ability to build a network with significant population coverage given its extensive existing infrastructure assets, its recent investments in spectrum, and given the concentration of Australia's population in cities.

"Having said that, I expect TPG to obtain a roaming agreement around the edges of its network. In these areas, there are three MNOs [mobile network operators] that have incentive to offer a wholesale roaming service.

"We will be disappointed if this does not occur."

Sims also touched on the issue of domestic roaming, which saw Vodafone take the ACCC to court over the process by which it came to its draft decision.

The chairman said subsidies can entrench existing coverage advantages, such as the one Telstra enjoys, and can leave regional customers with the dominant player as their only choice. However, the ACCC is looking to improve the situation.

"We also think that there are a range of measures that could assist MNOs to extend their networks at a reduced cost," he said. "These include improving the facilities access regime and increasing the use of NBN infrastructure where possible.

"By encouraging operators to share infrastructure such as base stations, some build costs can be reduced."

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