ACMA says Telstra failed to inform customers of underdelivering broadband speeds

7 Jul 2021

The Australian Communications and Media Authority (ACMA) has ruled that Telstra failed to notify almost 50,000 customers satisfactorily that the maximum speeds advertised in their internet plan were not attainable with the National Broadband Network (NBN) infrastructure available to them. Under ACMA rules, telcos are required to verify maximum internet speeds and notify customers when speeds cannot meet those advertised in their plan; in such circumstances customers are then entitled to move to a lower speed tier plan at a lower price or exit the contract without cost.

As a result of its findings, the ACMA has issued Telstra with a Remedial Direction under which it must commission an independent audit of the systems it has in place to notify customers of their maximum attainable speeds. Meanwhile, the telco is said to be in the process of providing remedies to the impacted customers, including providing refunds where appropriate. Around AUD25 million (USD19 million) in refunds is expected to be paid in connection with this issue, although it was noted that this total included additional cases not counted in the ACMA’s findings.

In addition, Telstra has reportedly breached rules that prevent telcos from charging for an NBN service unless ten working days have passed since customers were advised of their options and they have not taken up an available remedy. As such, under the Remedial Direction Telstra must also implement a range of systems, processes and reporting to assure the future compliance with the ACMA rules.

Commenting, ACMA Chair Nerida O’Loughlin said: ‘We will take a very close look at the results of the independent audit to make sure we are satisfied that the action Telstra has taken will adequately address the flaws that led to the problems.’ Should the operator fail to comply with its Remedial Direction, it could face penalties of up to AUD10 million.