Communications Alliance Welcomes Broadband Speed Consultation
– Cautions Against Over-Simplification

Sydney, 26 July 2016 – Communications Alliance welcomes the desire expressed by the ACCC today for consumers to have access to better information about broadband speeds.

Ironically, however, one of the main reasons that industry is constrained in its ability to offer more transparent information about broadband speeds and performance is the restriction placed on industry by the ACCC itself.

In the ACCC’s Information & Industry Guidance Paper: Broadband Internet Speed Claims and the Trade Practices Act 1974, the ACCC provides the following guidance:

"ISPs should avoid using hypothetical speeds in headline claims describing a service and in the names or titles that ISPs give to particular plans… ISPs must be able to substantiate stated maximum or “up to” speeds as being achievable by users of their services."

Communications Alliance CEO, John Stanton, commented: “The ACCC guidance also requires ISPs to take account of a wide range of factors when they wish to make any statement about the data transfer rates available to consumers using their services.

“Some of these factors – including the need to consider the numbers of users of a broadband service within a customer’s premises, as well as the nature of the modem- device connection (e.g. cable or Wi-Fi) - are unrealistic for ISPs to identify on a customer- specific basis, thus making  it difficult or impossible to make any claim about data transfer rates.”

As is stated in the Consultation Paper, the ACCC’s activities in relation to broadband speeds have historically focused on enforcement activity. The expectations in the Information & Industry Guidance paper, as well as the focus on enforcement, have resulted in a situation in which ISPs have understandably focused on competing on price and other features, rather than speed.

Mr Stanton said that Communications Alliance members are currently preparing an education package for consumers about the different types of broadband access technologies, the factors that can affect their performance and the overall consumer experience. Communications Alliance has already flagged that it will consult with consumer groups in the preparation of this package. The education material will be in addition to that which is already offered by many service providers on their web sites and elsewhere.

It will include information about the tools already available to consumers – such as online speed meters – that provide independent real-time information about upload and download speeds.

Industry is also looking at potential options to improve information to consumers and looks forward to engaging with the ACCC and other stakeholders.

Mr Stanton cautioned against focusing primarily on broadband speeds.

“In consumer research recently carried out for Communications Alliance, consumers said the two factors that mattered most to them about their broadband service were the cost of the service and the size of the data allowance.

“We should also not over-react to changes in the mix of complaints to the TIO, given that such changes can be momentary. Clearly the advent of Streaming Video on Demand (SVOD) services in Australia such as Netflix have contributed to increased pressure on broadband networks at a time of transition to nbn-based networks.

“We should remember the ‘crisis’ sparked by complaints to the TIO about mobile network reach of several years ago. The TIO warned it was a huge problem, the regulator leapt into action and called a public summit and by the time it took place, the wave of complaints had largely subsided.”