ACCC wants ISPs to be honest about their peak usage NBN speeds

22 August 2017

The Australian Competition & Consumer Commission (ACCC) has published new guidance for internet service providers on how to advertise the speed of NBN plans. Rather than promoting theoretical maximum speeds, the ACCC wants ISPs to advertise the speeds subscribers can realistically attain during peak usage periods.

ACCC Chairman Rod Sims said that many NBN subscribers on high speed services experience speeds slower than what they're paying for due to "under provisioning of capacity by their retail service provider".

"Retailers should be very clear with customers about the typical speeds they can expect during busy evening periods," said Sims. "It is not acceptable to advertise an 'up to' speed claim, as this can give the false impression that the speed advertised is achievable at most times, including during the busy period."

To communicate this is a standardised manner, the ACCC is proposing that the industry use standardised labels to advertise performance during peak hours. "Basic evening speed" would have no guaranteed minimum, "standard evening speed" would have a minimum speed of 15Mbps during busy periods, "standard plus evening speed" 30Mbps, and "premium evening speed" 60Mbps.

"With this guidance, if you buy a 'basic evening speed' plan you should generally not expect speeds much different to your pre-NBN experience," said Sims. "If you buy 'standard evening speed' or higher plans, you should expect certain minimum speeds during busy periods."

This guidance is however just guidance, and as such, Australian ISPs are under no obligations to implement any of the ACCC's recommendations.

The ACCC's recommendations come amongst a blame game between NBN and its retailers surrounding speed. NBN has accused ISPs of not purchasing enough network capacity (CVC) while ISPs have suggested that CVC is too expensive.

CVC is the amount of network capacity shared between an ISP's customers. ISPs previously paid $15.25 per Mbps per month, which under new volume based discounts, could go as low as $8 per Mbps per month. CVC is typically blamed as the leading cause of National Broadband Network congestion, given that it is impossible for ISPs to buy enough to guarantee every single customer the speeds they're paying for at peak times.

NBN CEO Bill Morrow has however accused ISPs of drastically under purchasing CVC.

"The average CVC being purchased across the industry works out to about 1Mbps for each end user," said Morrow. "Under our pricing model that could be doubled to 2Mbps for each end user for around an extra $5 per month."

Despite Morrow's accusations, he has however admittedly that the company is considering an overhaul of its wholesale pricing model. Following this, Federal Communications Minister Mitch Fifield ordered a review into "NBN customer experience" in order to identify where customer issues most commonly arise and how they can be either avoided or resolved faster.

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