16 September 2016
by Lucy Battersby

Consumers want ACCC to monitor broadband speeds, industry doesn't

Consumer expectations are too high when it comes to broadband speeds, particularly for the national broadband network, leading to an increase in complaints about slow data speeds, according to the telco industry.

However, rather than introduce an independent speed monitoring service, industry wants to create guidelines so consumers have more realistic expectations. And NBN Co has warned it would be far too expensive to provide minimum speeds all the time.

ACCC chair Rod Sims wants $6 million to set up an independent broadband speed monitoring system.

But consumers are overwhelmingly in favour of more transparency and independent speed monitoring, according to more than 400 public submissions received by the Australian Competition and Consumer Commission (ACCC) inquiry into broadband speeds.

Consumers suggested they should pay for the speeds received, not speeds promised. They complained there was no way of knowing what speeds they could get before purchasing a service, other than "hearsay and other consumers' experiences".

The ACCC tested a speed monitoring program that would cost $6 million to set up and $1 million per year after. However, it is facing strong opposition from the telecommunications industry, which argues it is nearly impossible to tell consumers exactly what broadband speeds they will get at home.

While NBN Co acknowledges dissatisfaction when speed expectations are not met, it submits industry should have a chance to improve guidance before monitoring is introduced. It believes customers need better information, for example that products like 25 Megabits per second [Mbps] services "are generally not a minimum guaranteed speed".

"If retail service providers were required to reflect minimum speeds in their marketing to end users, and therefore guarantee these service speeds, end users would likely see an increase in the cost of basic broadband products," NBN's submission notes. However, it also confirms retailers have access to real-time monitoring of network performance and could improve speeds by paying for more capacity.

Industry peak body CommsAlliance would rather issue information guidelines so consumers know how what factors affect internet speeds. While industry giant Telstra argues strongly against the ACCC's proposal and says if it does go ahead, it should only apply to NBN connections.

"Consumers are likely to be confused, and quite possibly misled, if the ACCC introduces additional information into the market that is seen by consumers to have some higher 'official' status when it is unlikely to be any more accurate or useful than information from other sources," Telstra's submission states.

It is nearly impossible to accurately predict what speeds a consumer will experience, due to the "vagaries of the cabling and electromagnetic interference environment within the customer's premises". The telco also blamed subscription video on demand [SVOD] services for the recent increase in speed complaints, saying service providers have only had a short time to adapt to changing consumer demands.

And that "some longer ADSL lines are not designed for the large increase in data customers are now expecting to be supported".

Telstra also reveals most ADSL2+ customers experience less than 5 Mbps if they live more than three kilometres from the exchange.

"Network wide ADSL2+ speeds are fairly evenly distributed between 1 and 20 Mbps. It is clear that a significant proportion of all services are below 5 Mbps," it wrote.

Another way to reduce complaints is for consumers to change expectations, according to the Telecommunications Industry Ombudsman, which is funded by the telco industry.

"Consumer expectations about the quality of internet services are shaped by their perceptions of the underlying technology," Ombudsman Judi Jones submitted. "A common cause of consumer complaints about slow data speeds arises from differing expectations from consumers and their providers about achievable data speeds."

The TIO is not advocating that consumers need to lower their expectations, Ms Jones told BusinessDay, rather public information needs to improve.

The TIO received 1229 complaints about slow data speeds on NBN services in the 2015-16 year, up from 371 complaints the previous year.

And even though complaints are rising, "this is not a problem that is of such scale that it requires any regulatory intervention", TPG told the ACCC.

"This is not an industry where consumers are operating in an information vacuum. There is a wealth of information about telecommunications providers that exists in social media and online forums. As a consequence, consumers should be understood as relatively well informed about the performance of retail service providers," TPG wrote to the competition watchdog, adding if consumers wanted faster speeds, they should chose a more expensive service.

But a compilation of 150 responses by consumer group StreetSpeed found 80 per cent did not find it easy to compare speeds before purchasing a broadband service. About 45 per cent wanted to know the practical speeds they were likely to get, while 38 per cent wanted to know what their peak speeds would be.