Telstra compensates customers for slow NBN

Simone Ziaziaris
(Australian Associated Press)

Telstra has offered to compensate around 42,000 customers after failing to provide customers with the fast National Broadband Network speeds they promised.

The telco will offer remedies, including refunds, to those who purchased internet services through both the Telstra and Belong brands between September 2015 and November this year, after admitting it may have breached consumer law by promoting NBN speeds that it was not capable of delivering.

An Australian Competition and Consumer Commission investigation found many customers were not receiving the top speed of their plan or even the maximum speed of a lower-speed plan.

The watchdog concluded these top speeds “could not be achieved in real-world conditions” due to limitations of customers’ fibre to the node (FFTN) and fibre to the building (FTTB) internet connections.

The investigation was prompted by an alert from Telstra to the ACCC that approximately 9,000 of its customers on two of its plans could not receive speeds above a lower-speed plan.

Telstra group executive, consumer and small business Vicki Brady said, it is not possible to accurately determine what speed the NBN can deliver to a customer prior to connection.

She said remedial action will apply to less than five per cent of Telstra’s NBN customers.

“The majority of our customers have a service that can deliver the speeds of the plan they’ve chosen, but there’s a small group whose NBN connection isn’t capable of delivering the top speeds,” Ms Brady said.

Telstra admitted it was likely to have breached the Australian Consumer Law by engaging in misleading or deception conduct and making false or misleading representations.

The telco has provided a court-enforceable undertaking to the ACCC to offer affected customers the option of a costless exit from their contract and a refund, moving to a different speed plan and receiving a refund, or remaining on their current plan and not receiving a refund.

ACCC chairman Rod Sims said he was pleased Telstra had reported the issue to the watchdog but noted the problem extends to the rest of the industry.

“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,” Mr Sims said in a statement on Wednesday.

“We expect RSPs (retail service providers) to provide consumers with accurate information up front about the internet speeds they can expect to receive, and then deliver on those promises.”

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