TELSTRA is offering to pay back about 42,000 customers some of their costs after conceding the NBN speed plans were spruiked as having maximum speeds that could not be reached in the real world.
The telco told customers who signed up for its "Super Fast Speed Boost" plan to expect top speeds of up to 1000 megabits per second for downloads and 40 Mbps for uploading. However most customers' internet providers were unable to reach that speed.
The refunds will be targeted at customers who signed up for various plans through Telstra and its Belong brands.
The ACCC has lashed the telco in a statement today, saying not only could NBN customers not reach the top end of those high speed plans, but users could often not reach the top end of lower-speed plans.
"In essence, people were paying more to get higher speeds that they just weren't able to get," ACCC Chairman Rod Sims said.
"All businesses have a responsibility to ensure that claims about the performance of their products or services are accurate.
The issue affected a range of customers across a number of different tiered speed plans, including:
26,497 (56%) of NBN customers on the 100/40 Mbps plan could not receive 100/40 Mbps. Of those customers, 9,606 could not receive 50/20 Mbps, which was the next speed tier plan down.
6,352 (45%) of NBN customers on a 50/20 Mbps plan could not receive 50/20 Mbps.
- 9,342 (2%) of NBN customers on a 25/5 Mbps plan could not receive 25/5 Mbps.
Telstra did flag some of these issues with ACCC and has worked alongside the regulator to find a solution.
"We are pleased that Telstra proactively reported this serious problem to the ACCC and has co-operated in creating a remediation plan for affected customers," Mr Sims said.
"However, we are mindful this is not just a Telstra problem; it is an industry problem where consumers are often not getting the speeds they are paying for."
"We will continue to investigate other retail service providers selling broadband plans over the NBN and take enforcement action where appropriate.
"As we've said previously, we expect RSPs [retail service providers] to provide consumers with accurate information upfront about the internet speeds they can expect to receive, and then deliver on those promises."
"The ACCC is keen to separate out two issues affecting customers' broadband speeds. First, and the subject of today's action, is the situation where the connection is not capable of delivering the speed that has been sold."
"Telstra has undertaken that, where it advertises or otherwise represents to potential customers that they will receive a particular speed, it will, within four weeks of connecting a new service, check each customer's attainable speed. If it is below the advertised speed, Telstra will notify the customer and offer remedies."
Mr Sims said the second issue was where speed could be delivered technically but the customer's provider had not bought enough capacity from NBN Co to make it happen, particularly at the busiest points in the day.
"To address this second problem of under provisioning, the ACCC is urging all ISPs to advertise the typical speeds customers can expect in the busy evening period between 7:00pm and 11:00pm," he said.
"Our message to retailers is that if you advertise a particular speed and customers cannot get that speed, you will risk breaching the Australian Consumer Law."