ACCC has instituted Federal Court proceedings against Australia’s Telstra for making false promises about upload broadband speed to its Belong customers.
Telstra in October and November 2020 migrated nearly 9000 customers who were on a Belong NBN plan with a download speed of 100 Mbps and a upload speed of 40Mbps, to a service with an upload speed of 20Mbps, ACCC said in a news statement.
ACCC alleges that Telstra failed to notify customers of the reduction in the upload speed, and did not lower their charges, though the cost charged by NBN to Telstra was $7 a month less for the new service.
“We allege 8,897 consumers who signed up to a Belong NBN plan between May 2017 and October 2020 were affected by this change and deprived of the opportunity to make an informed decision about their internet service,” ACCC Commissioner Liza Carver said.
Telstra in March and April 2021 acknowledged this failure in respect of approximately 2,500 customers and provided them with a one-off $90 credit.
ACCC said Telstra did not inform more than 6,300 Belong customers that their plan has changed to a lower upload speed. Telstra continues to represent to them that the Belong broadband service supplied to them has not been altered.
Telstra’s general customer terms contain the following clause: “Our right to migrate your service: If we give you reasonable notice, we may migrate you to an alternative service or pricing plan. If you’re not satisfied with the alternative service or pricing plan, you can cancel your service and any ETCs [early termination charges] will be waived.”
The ACCC is seeking declarations, penalties, consumer redress, costs and other orders.
In May 2020, NBN launched wholesale consumer speed tiers, including a new 100/20Mbps wholesale speed tier, which costs retail service providers $7 less per month than the 100/40Mbps plan on a wholesale level.
Before migrating Belong customers onto the 100/20 tier, Telstra determined the extent to which they used the upload capacity by measuring the amount of data uploaded at multiple intervals, averaged over a five-minute period. However, this may have underestimated customer’s peak usage as increments of 30 seconds are more commonly used as the period over which speed is measured. This means some customers who use high upload speeds may have received slower upload speeds due to Telstra’s actions.
In November 2022, Telstra was ordered by the Court to pay $15 million in penalties after they admitted making false or misleading representations to consumers when promoting certain NBN internet plans.
In October 2022, ACCC published revised Broadband Speed Claims Industry Guidance that promotes more transparent information about upload speeds in broadband services provided to consumers.
In May 2022, the Federal Court ordered Telstra to pay $50 million in penalties for engaging in unconscionable conduct when it sold mobile contracts to more than 100 Indigenous consumers, in proceedings brought by the ACCC.
In April 2018, Telstra was ordered to pay $10 million in penalties for making false representations to customers in relation to its third-party billing service known as Premium Direct Billing.
In November 2017, Telstra agreed to offer remedies to around 42,000 Telstra and Belong customers for promoting some of its NBN speed plans as being capable of delivering specified maximum speeds, when those maximum speeds could not be achieved in real-world conditions.