ACCC boss slams ‘poor’ and ‘unacceptable’ NBN marketing
The Australian Competition and Consumer Commission (ACCC) has slammed internet providers’ NBN marketing efforts with commissioner Rod Sims describing current advertising as “poor” and “unacceptable”.
NBN plans have been plagued with consumer misunderstandings resulting in Telstra announcing last May dissatisfied users would receive refunds and Optus following suit over the weekend.
The comments come as the watchdog releases guidelines suggesting advertisers avoid publicising the maximum speeds – as nbn™ does – that customers can expect to achieve during evenings.
The ACCC admitted such detailed guidance to industry is an unusual step: “We judge, however, that such a step is necessary because the current advertising around NBN products is poor, which is unacceptable in the context of a forced migration to the NBN,” Sims said in a media statement.
“Currently around 30% of NBN customers have been sold low-speed plans, with many not realising their internet speeds may not be any better—and in some cases worse—than existing ADSL services.
“Many other NBN customers, while on higher-speed services, experience lower-than-expected speeds during busy periods due to under provisioning of capacity by their retail service provider.
“With this guidance, if you buy a ‘Basic evening speed’ plan you should generally not expect speeds much different to your pre-NBN experience. If you buy ‘Standard evening speed’ or higher plans, you should expect certain minimum speeds during busy periods,” Sims said.
The ACCC has created standard labels it would like the industry to adopt so customers can better compare plans and understand the product they will be getting.
| Label | Basic evening speed |
Standard evening speed |
Standard plus evening speed |
Premium evening speed |
| Minimum typical busy period speed | * | 15 Mbps | 30 Mbps | 60 Mbps |
*No minimum speed is specified for the ‘basic evening speed plan’
“Retailers should be very clear with customers about the typical speeds they can expect during busy evening periods. It is not acceptable to advertise an ‘up to’ speed claim, as this can give the false impression that the speed advertised is achievable at most times, including during the busy period,” Sims continued.
The commissioner admitted in the media release the suggestions have no formal legal standing but warned advertisers that the watchdog will take a dim view on those not following them.
“While the guidance is voluntary, it provides a strong benchmark against which the ACCC, and more importantly the community, will judge the advertising of retailers,” Sims said. “The ACCC will also be closely monitoring retailer compliance with the Australian Consumer Law.”
It is a sad day for marketing when the ACCC has to issue such “guidance”. We should not create communications that make promises so incompatible with reality. I think the “up to” wording is particularly egregious. Surely we would not advertise a carton of eggs by noting, “up to 12 eggs contained in this package. Actual quantities may vary due to various factors”. Yet this has become the standard type of promise made when it comes to Internet speeds.
We must be better than this.
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There needs to be some personal responsibility. People are signing onto the cheapest plans and then complaining… you wouldn’t buy a Suzuki Swift and expect the performance of a Porche…
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Unless you are Malcolm Turnbull it seems
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But they’re only complaining when their “cheapest plan” doesn’t deliver as promised.
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G’day Joe.
I’d like to throw another variable into the mix.
All the plans I have seen are in Megabits and not Megabytes. But they use the abbreviations Mb and MB respectively.
I simply don’t know of anyone who talks in Megabits (Mb) any more. Yes, I know modems and comms work based on bits rather than bytes, but when people purchase a device they look at the storage in Gigabytes (GB) or Terabytes (TB), and the memory in Gigabytes (GB). No-one would ever think what was that in Gigabits.
Further people who, say, are downloading or streaming a file will say “how many gig is it” – meaning Gigabytes. Mentally they will do some sort of conversion and say … that’ll take a quarter of an hour.
But if the plans are sold in Megabits and not Megabytes that gives the false impression that they are eight times faster than what the lay person understands the way things are. Of course they are technically correct, but the majority of customers are not tech-heads.
I’ve spoken to various politicians and ministers about this and suggested a “typical time it takes to download/upload a 1 GB file” would be a very helpful and more meaningful adjust to the tech-speak. After all, how many times have you heard a politician say “that money could build five hospitals instead”, or “that’s the equivalent of 20 swimming pools of water saved”.
Let’s bring in some Plain English.
Cheers.
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