More than 8700 Optus customers who paid for unobtainable NBN speeds will be compensated, the Australian Competition and Consumer Commission (ACCC) has announced.
Optus has previously indicated it would compensate some customers who purchased fibre to the node (FTTN) and fibre to the building (FTTB) NBN services.
The NBN speeds encountered by end users with FTTN and FTTB services can vary greatly depending on factors such as the quality and length of the copper wiring used to connect a household, and in the case of FTTN the distance from a node.
The ACCC said that 48 per cent of the 5430 Optus customers who purchased 100/40Mbps FTTN services between 1 September 2015 and 30 June 2017 could not achieve those speeds — and 21 per cent could not even achieve 50/20Mbps with their connections.
Around a quarter of the telco’s FTTN customers on 50/20Mbps NBN plans could not achieve 50/20Mbps, while 3 per cent of 25/5Mbps services were not capable of those speeds.
The majority of customers who will be compensated were connected via FTTN; only around 433 FTTB customers paid for unachievable speeds.
Today’s announcement follows the news in November that some 42,000 Telstra FTTN and FTTB customers will receive compensation due to the slow speeds they received.
Vocus, whose brands include Dodo and iPrimus, has said it may also have to compensate customers. TPG has previously indicated it would be discussing the issue with the ACCC.
“Optus is the second major internet provider we have taken action against for selling broadband speeds they could not deliver to their customers,” ACCC chairperson Rod Sims said today.
“Worryingly, many affected Optus FTTN customers could not even receive the maximum speed of a lower-tier plan. This is a concerning trend we have seen throughout the industry and we are working to fix this.”
According to the figures released by the ACCC, 3 per cent of the Optus FTTN customers on the top 100/40Mbps NBN speed tier could not even achieve 25/5Mbps.
“Optus supports greater transparency on broadband speeds and is taking a number of measures to improve quality of experiences for our customers,” a spokesperson for the company said.
“Optus acknowledges that it did not have the appropriate procedures in place to confirm the speed of the NBN service at the time of purchase by affected customers.
“We apologise to customers who have been affected by this error and are putting a process in place to rectify this issue.”
Optus revealed it had also recently purchased additional CVC capacity, which can improve performance for end users on the NBN.
“Labor welcomes steps by Optus to compensate customers who have been sold speeds which their copper NBN infrastructure cannot deliver,” shadow communications minister Michelle Rowland said in a statement.
“On every measure, Malcolm Turnbull's copper NBN experiment has become a liability.”
"Consumers and small businesses are stuck in a lotto in terms of what speeds they can receive, and taxpayers have been left with a dud network that costs more and does less,” Rowland said.
The ACCC said that Optus had provided it with a court-enforceable undertaking that outlines a range of remedies including refunds, shifting speed tiers, discounts, and the ability to exit a contract without a termination fee.
Optus will be contacting customers “on or before 2 March 2018,” the ACCC said.
“Affected customers should carefully consider the remedies Optus is offering them to assess which best suits their needs. In some cases, consumers may consider it preferable to simply exit their contract with a refund rather than accept a service that does not meet their needs,” Sims said.
Optus has committed to checking the speed potential of a line within four weeks of connecting a customer to a new NBN plan.
The ACCC has launched an assault on retail service providers (RSPs) over their marketing practices. It recently announced that UK company SamKnows will implement a broadband speed monitoring program that will focus on NBN services.
The competition and consumer watchdog has called for telcos to provide details of broadband performance including such as the actual minimum speed during typical busy periods.
NBN chief Bill Morrow has indicated he will consider publishing internal data revealing the theoretical maximum speeds for households but has called on RSPs to release the data to consumers.
NBN recently paused its activation of services based on hybrid fibre-coaxial (HFC) due to performance issues.