Optus fined for false NBN speed claims

Optus has been slapped with a $51,000 fine for misleading claims that its HFC network offered “NBN-like-speeds”.

The Australian Competition and Consumer Commission said that between January and August, Optus advertised plans offering download/upload speeds of 30/2 Mbps that were comparable to NBN speeds. 

The advertised plans are significantly lower than on the NBN network, which ranges from 50/20 Mbps to 100/40 Mbps.

Optus has agreed not to use the term “NBN-like-speeds” in its advertising, and acknowledged that it may have contravened Australian consumer law. Optus also agreed to refund customers their startup fees and cancel their contracts at no cost if they purchased plans when the offer was advertised.

An independent third party will also conduct a review into Optus’s trade practices compliance program and implement any necessary changes.

An Optus spokesperson told CRN it had already taken steps to rectify the situation.

“Optus has taken the following steps to rectify the issues which were identified including: writing to customers who purchased the product between 1 January and 23 August 2015; and provided an undertaking not to use the unqualified phrase ‘NBN-like speeds’ in promotions for Optus HFC cable service.”

ACCC chairman Rod Sims said the industry watchdog would continue monitoring ISPs for misleading claims about their internet speeds.

“As consumers migrate to the NBN, the ACCC’s action in this matter is a timely reminder to broadband internet providers that they must not misrepresent the performance of the services they are selling,” said Sims.

“While businesses may use comparative advertising to promote the superiority of their products over those of competitors, this advertising must be accurate and businesses should be able to substantiate these claims.”

In 2011, Optus agreed to transfer its HFC network to NBN for $800 million. However, leaked NBN documents revealed last month said the network was in such a degraded state that the national network builder was considering replacing Optus’s network for an additional $375 million.