The Australian Competition and Consumer Commission has welcomed the Federal Government’s announcement that it will fund a new broadband performance monitoring program to provide Australian consumers with accurate and independent information about broadband speeds.

The program will use hardware-based devices to perform remote testing of around 4,000 households to determine typical speeds on fixed-line NBN services at various times throughout the day.

“This program will see the ACCC test and report on the typical speed and performance of broadband plans provided over the NBN. This information will assist consumers in comparing and shopping around, and checking that they receive what they are paying for,” ACCC Chairman Rod Sims said.

“The program will also allow the ACCC to determine if issues are being caused by the performance of the NBN, or by internet service providers (ISPs) not buying sufficient capacity. It will also provide ISPs with independent performance information from which to draw when making speed claims.”

“The ACCC will begin publishing data later this year as a large number of consumers move to the NBN,” Mr Sims said.

“As consumers drive the demand for high-data speeds and data-intensive services, they need access to accurate information to assist them in choosing plans. This improved transparency will help these consumers exercise choice as next generation services are rolled out, including on the NBN.”

The ACCC has recently provided guidance to industry in relation to industry practices when making broadband speed claims to consumers.

“The ACCC’s program will encourage ISPs to compete for business and tailor their products to meet the needs of their customers. It will also provide better consumer information – all of which is currently lacking in the Australian broadband market,” Mr Sims said.

After appointing a qualified testing provider, the ACCC will commence the program in May 2017, and will provide comparative information for consumers during the second half of the year.

Background

The ACCC successfully completed a pilot broadband performance monitoring and reporting program and published a report in 2015.

The program will cost around 7 million dollars to deliver over four years. It will provide consumers with vital information to make efficient decisions in a market where consumers spend over 4 billion dollars per year on broadband services of fixed broadband service, along with the anticipated improvements to competition.

The program will use a hardware-based testing device to sample a representative group of fixed-line broadband services supplied over the NBN. Most of these households will be connected to the NBN and this will form the basis of ACCC reporting on retail broadband plans. A small number of households that are connected to alternative, nbn-like networks (Next Generation Services) and legacy networks will also be recruited to allow the program to also provide a broader view of the state of broadband performance in Australia.

The ACCC will publish information about the speed at which services typically operate, and other metrics relevant to measuring broadband performance and applications consumers commonly use.

The program complements steps the ACCC is taking to encourage ISPs to improve their marketing and business practices. In February, the ACCC published principles to help ensure internet service providers’ claims about broadband speeds aren’t misleading under the Australian Consumer Law, and expects to publish a best practice guide on broadband speeds advertising in due course.

The ACCC’s broadband monitoring program will be similar to established programs in the United Kingdom (link is external) (2008), United States (link is external) (2010), Singapore (link is external) (2011), and Canada (link is external) (2016). Such programs have led to improved transparency of information and increased performance-based competition for broadband services. The ACCC has consulted and engaged closely on the proposed program with industry participants, consumer representatives and other stakeholders since 2013.

The international experience confirms that monitoring programs drive retail competition and differentiation in the broadband market, and deliver benefits to consumers including:

  • lowering the barriers to consumer switching (including reducing time spent shopping around);
  • enabling consumers to more readily assess the value of a service once they have signed up; and
  • prompting retailers to compete on performance as well as price and inclusions (such as data allowances), including by offering ‘budget’ and ‘premium’ deals.

Complaints to the Telecommunications Industry Ombudsman about internet data speeds increased 48 per cent during 2015-16, making it the single largest issue for consumer complaints during the year.

There are around 13.3 million internet subscribers in Australia, an increase of 4.2% from the previous year (ABS, June 2016). Fixed line data downloads increased 52 per cent between June 2015 and June 2016 (ACCC Telecommunications Report 2015-16).

If you have a complaint or personal enquiry about broadband speed claims, please contact the ACCC Infocentre or Telecommunications Industry Ombudsman (link is external).

 

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