Telstra and ACCC agree on nbn speed accord

Telstra NBN
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The Australian Competition and Consumer Commission (ACCC) has accepted an undertaking from Telstra as part of its ongoing program to improve the information customers receive about nbn speeds.

Vicki Brady, Group Executive, Consumer and Small Business at Telstra said, “We have changed our advertising, marketing and sales processes. We now use the standard ACCC naming convention to describe our speed plans and quote the typical speeds a customer can expect, including for the period when most people tend to use the internet.”

But the issue is deeper than just using accurate terminology. The fact is that not all homes can receive the quoted speed, especially the higher speed tiers, due to the underlying technology being rolled out by nbn and other factors.

Some more opportunistic Retail Service Providers (RSPs) buy less bandwidth from nbn co leading to a contention ratio issue (* defined below) where users share available bandwidth – it allows them to offer cheaper nbn plans by delivering lower speeds. Or homes on FTTN (fibre to the node) that use existing phone line copper wiring are too far from the node or the condition of the wire precludes it delivering the required speed.

Telstra states that it has been using robotic testers in its network for the last 18 months to ensure it is buying the right amount of connectivity virtual circuit (CVC) from nbn co to deliver the appropriate speeds to customers.

Brady says, “We have been undertaking this review since May 2017 and, where we identify they cannot attain the benefit of the speed boost, we have been contacting them to provide refunds. We also give these customers the option to move to a different speed tier, or to cancel their contract altogether.”

Ms Brady says Telstra would begin contacting other affected customers, who represent less than 5% of its total nbn customer base, over the next few weeks, and there was no need for customers to contact Telstra.

*Contention Ratio (or over subscription ratio) is the number of users sharing the same data capacity (CVC). A 50:1 or often greater contention ratio is typically used by low-cost RSPs and means that up to 50 broadband customers are sharing the same fixed bandwidth delivered to the nearest nbn node at any one time – that is why the internet slows to a crawl when school kids get home! This can also affect FTTB (fibre to the basement) in high-density apartment complexes where copper or HFC cable delivers the nbn service.