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Australia investigates misleading or evasive broadband speed claims

Wed 27 Jul 2016

An Australian consumer watchdog is calling for public submissions for a pending enquiry into evasive, vague, inexact or just plain mendacious claims made by broadband providers in regards to the broadband speeds they sell to consumers.

The Australian Competition and Consumer Commission (ACCC) is proposing an enquiry based on a number of key issues, including growing consumer claims that their broadband connections drop to unacceptable levels of performance during peak periods (7-11pm).

The ACCC also wishes to investigate the effect of ‘traffic prioritising’ on the consumer experience, as this can see popular services such as Netflix and YouTube achieve higher-than-average consumer performance whilst other high-demand services languish in the slow lane.

Of most concern in the discussion paper is the vague advertising language which describes offered broadband speeds as ‘fast’, or represents the idea of speed with imagery of athletes, animals or other symbolism, rather than stating what the exact predicted speeds might be.

Additionally the paper shows concern about the way broadband providers advertise ‘tiered’ packages (always as an ‘upgrade’), with claims that a service reaches ‘up to’ [X]mbps – but provides no context for when the consumer can expect such performance.

The paper opines that retail service providers (RSPs) are ‘not currently translating the wholesale speed tier information and presenting it to consumers in a way that will allow consumers to understand the speeds that the associated retail services will provide.’

The general indication of the discussion is that broadband demand has risen to such an extent in the past two years – 40% from 0.96 million terabytes (TB) to 1.3 million TB in the 2014-15 year – that network service providers are struggling to accommodate it, and may be neither investing in their capacity in order to fulfil their commitment nor be adequately managing customer expectations or setting appropriate pricing based on realistic performance level.

At the end of 2015 Australia’s Telecommunications Industry Ombudsman (TIO) reported that consumer complaints about slow data speeds increased by 56.8% during October-December of that year, relative to the same period in 2014.

Slow data speed complaints - Telecommunications Industry Ombudsman

Slow data speed complaints – Telecommunications Industry Ombudsman

Last year the ACCC piloted a Broadband Performance Monitoring and Reporting (BPMR) Program, which it intends to take forward as a platform to provide realistic information about broadband services to Australian consumers.

The initial report notes that both the United Kingdom and the United States have taken measures to lower the fantasy-factor in broadband advertising. In the UK consumers are now allowed to terminate service contracts where less-than-promised performance is delivered. However this is a voluntary code of practice, and additionally is one where shortfalls can prove difficult to quantify.

Stateside, the United States Federal Communications Commission (FCC) implemented the Open Internet Transparency framework in 2010, which partly has the ambit of providing consumers with accurate information, but whose consumer aspect has been overshadowed in recent years by more political concerns about network neutrality.

Neither of the above regulatory frameworks subjects ISPs or network providers to strict regulation in terms of reporting mean speeds or constricting the language and nature of the advertising that they may use.

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