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ISPs should be more accurate about broadband speeds: ACCC

Inaccurate broadband speed claims by ISPs are obstructing competition and causing increased complaints, the regulator has said.
Written by Corinne Reichert, Contributor on

The Australian Competition and Consumer Commission (ACCC) has published a set of guidelines for internet service providers (ISPs) to follow when advertising their broadband speeds in order to improve accuracy and prevent misleading claims.

The ACCC in 2015 suggested monitoring broadband services in an effort to encourage competition between fixed-line broadband retail service providers (RSPs) and aid consumers in making more informed purchasing decisions, with a discussion paper released in July 2016.

After an enquiry into the matter, the ACCC said 80 percent of consumers consulted said they want simple, standardised broadband speed information in order to accurately compare packages from different ISPs.

"The ACCC is concerned that the use of vague speed claims is not providing consumers accurate, comparable, or useful information. Four out of five consumers have trouble comparing broadband speeds, and this is causing a high level of complaints, confusion, and dissatisfaction," ACCC Chairman Rod Sims said.

"Consumers believe they aren't getting what they sign up for, and pay for, when it comes to home internet speeds. It is time the industry met consumer demand for accurate information about broadband speeds so consumers can compare offers and make informed decisions about their internet services."

In its Broadband Speed Claims: Consultation outcomes report [PDF], the ACCC said the limited information currently provided to consumers is "raising consumer search costs, inhibiting competition, and feeding into an increasing level of consumer complaint".

The report said ISPs 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 ISPs, and diagnostic systems installed to resolve any issues.

The ACCC is conducting further consultation with industry next month on how to implement these principles, with guidance to be published within the first half of this year and the speed claims monitoring to commence during 2017.

"Further action may be needed if RSPs elect not to apply the ACCC principles and guidance," the report noted, saying this would be a breach of Australian Consumer Law.

During consultation last year, Australia's ISPs spoke out against the proposal, saying many of the factors affecting speed fluctuation are out of their control.

According to TPG, the regulator should not step into an area already taken care of through competition, and RSPs should not be forced to provide information on speeds because many of the factors affecting speeds are out of their control.

"There are a number of factors that affect an end user's perception of 'speed', including the type of technology used, backhaul capacity, end-user hardware and connection method, source of content, distance to exchange, weather, interference, quality of the connection (cable, copper wires). Many of these, as noted in ACCC's Information Paper dated July 2011, are beyond the control of RSPs," TPG pointed out.

"Consumers are, in many instances, not aware of the extent of those issues and often will not understand that local issues, such as underlying computer and network resource consumption that may or may not be known (eg, virus traffic or unknown download traffic), and third-party issues such as congestion at, or a poor quality of, data source, can be affecting their perception.

"These factors limit a RSP's ability to provide representations of actual broadband speed that is likely to be attainable by consumers at their premises."

Telstra also pointed out the many factors that affect a user's speed, such as "the performance of devices, Wi-Fi or cabling within a consumer's premises, the line speed of the broadband service, the capacity of the backhaul network to cope with changes in aggregate customer demand at different times of the day, and the performance of remote servers and their connections to the internet", making it difficult for RSPs to provide accurate information.

"These factors are all variable and many of them are outside the control of the RSP," Telstra said.

"Consequently, it is not possible to accurately forecast a specific speed for any individual customer for any specific time. The best that can be done is to forecast a probability that the actual speed experienced will be within a certain range of speeds."

Optus argued that all that would result from regulation on broadband speeds is ISPs constantly risking breach of the rules thanks to factors outside of their control affecting speeds.

"Given the technical limitations of legacy-based services, where the length of the copper runs and quality of the copper means that performance can differ on a premise-by-premise basis, it is not surprising that ISPs are reluctant to advertise speeds," Optus said.

"The benefits to be gained from providing performance information are likely to be outweighed by the risks of breaching the ACCC's guidelines and facing enforcement action and reputational damage."

The ACCC said it is also currently undertaking discussions with the Australian government about whether to introduce a fixed broadband performance monitoring and reporting program.

The Australian Communications Consumer Action Network (ACCAN) said it welcomes the ACCC's decision, as it will give consumers certainty on what speeds they will get during peak periods online. ACCAN is also calling on the government to introduce and provide funding for an independent broadband monitoring and reporting program.

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