TPG will offer compensation to almost 8000 of its customers who purchased fibre to the node (FTTN) and fibre to the building (FTTB) National Broadband Network services.
Today’s announcement means that, in total, some 60,000 households with FTTN and FTTB services through TPG, Telstra and Optus will be compensated after being sold NBN services with unachievable speeds.
The majority of TPG customers who purchased 100/40Mbps FTTN services between 1 September 2015 and 30 June 2017 could not achieve 100 megabits per second downloads, the Australian Competition and Consumer Commission revealed.
The ACCC said that the retail service provider (RSP) had provided it with a court-enforceable undertaking detailing the compensation options it would offer to customers.
Affected TPG customers will be able to move to a lower tier speed plan and receive a refund or exit their plan and receive a refund.
“We apologise to the NBN customers that have been confused about broadband speeds, the total number of which represents less than 3.5 per cent of our total NBN subscriber base,” TPG COO Craig Levy said.
“One of the key differences in the cost of the products sold to us by the NBN is speed. So we do need somehow to differentiate between those products so that consumers have some understanding about why one product is more expensive than another.
“Unfortunately, promoting speed on the NBN has not been simple for any of the service providers including TPG. Due to the multiple NBN technologies available, TPG and other retailers have found themselves in a very difficult position because FTTN and FTTB technologies speeds are dependent on a number of factors including distance, co-existence and copper quality.”
“Furthermore, the RSP only finds out about the actual speed a consumer will obtain after the customer service has been activated,” Levy said. “For that reason, TPG never made the particular speed tier (for example, 100Mbps) the main focus of its TV, radio or Internet advertising.”
The COO added, however, that online and in direct mail the RSP did differentiate between broadband products by reference to the speed tiers sold to TPG by NBN.
“TPG has recently implemented the new ACCC guidelines which includes promoting Typical Evening Speeds as well as confirming FTTN/B speeds after activation,” the COO said. “We hope that the risks of such confusion will diminish.”
When the ACCC announced in November that Telstra would compensate some 42,000 FTTN and FTTB customers, TPG told Computerworld that it planned to have discussions with the consumer watchdog about the speed issue.
“Some months back TPG companies wrote to FTTB/N customers and invited them to switch plans if they were dissatisfied with their connection speeds,” a TPG spokesperson said at the time.
“The technical limitations of NBN’s fibre to the node technology meant many TPG customers could not reach the advertised 100/40 speeds they paid for. Some couldn’t even get half those advertised speeds,” ACCC chair Rod Sims said in a statement released today.
“TPG charged customers higher prices for the promise of faster speeds, misleading many customers into paying a premium price for a service they could not get.”
“This is the third major internet provider we have taken action against in the past few weeks. Internet service providers must take responsibility to ensure that their customers get the promised speeds that they pay for.”