ISPs are accused of not delivering expected speeds – but current arrangements with the NBN make it difficult to know what they will be for new lines
Regulators are at a standoff with ISPs over broadband speeds: In July, ACMA found that Telstra failed to inform 50,000 customers that the maximum advertised speeds for their plan were not attainable with the NBN infrastructure available to them. Affected customers were allegedly denied the opportunity to downgrade their plan or exit the contract. ACMA expects Telstra to issue refunds of AUD25m (£13.2m). On Monday, the Australian competition authority said it will take to court Telstra, Optus and TPG for similar allegations. The ACCC says that the three ISPs failed to live up to the promises they made to FTTN customers, who were told that the ISPs would offer remedies if the actual speed was not reached. The ACCC says operators were aware of the problem and had previously undertaken to rectify it.
Operators call for more accountability of the NBN: On Wednesday, Telstra’s CEO Andrew Penn explained that while operators have to provide customers with the speed they have chosen, the NBN cannot tell ISPs which speed will be available to a premise ahead of connection. All ISPs have had issues with this process, and haven’t always been able to notify affected customers. Penn calls for the NBN to communicate which speeds are available ahead of connecting a customer, and for regulators to make the NBN subject to the same obligations facing retail ISPs. One of the problems is that ISPs are expected to compensate customers, but still pay the same wholesale price to the NBN when speeds do not match expectations.
The ACCC should be mindful of the challenges facing first-time activations: Retail ISPs face objective difficulties in making a speed promise on a new DSL line. Elsewhere, this challenge has been recognised by regulators. For example in the UK, retail operators relying on the Openreach network receive data of daily tests of the live sync speed of active DSL lines. However, Ofcom’s voluntary code of practice on broadband speeds (to which the largest ISPs have signed up) leaves inactive lines out of scope, recognising the challenges in measuring their performance. Similarly, the ACCC should recognise the problems ISPs face when they connect a customer for the first time, when no data on that line may be available. The ACCC’s industry guidance on broadband speeds recognises that there can be uncertainty for services migrating to a new network (as is the case with many NBN connections) and requires operators to seek out information about the actual speed attainable, but does not currently place requirements on the NBN. Promisingly, the NBN announced it will upgrade 2m premises from FTTN to FTTP by 2023, which should help reduce the scale of the problem.
