Telstra slams NBN Co after major telcos hit with $33 million in fines

Telstra has slammed NBN Co for providing inconsistent internet services at unsustainable prices, after the telco giant was stung with a $15 million fine for misleading its broadband customers.

The comments were made after the Australian Competition and Consumer Commission (ACCC) announced that the Federal Court had ordered Telstra, TPG Telecom and Optus to pay penalties totalling $33.5 million for breaching Australian Consumer Law. The multi-million dollar fines were the result of proceedings brought by the ACCC in August 2021, after the consumer watchdog found that the three telcos had failed to deliver on promised NBN speeds.

While Telstra accepted responsibility for not meeting its regulatory obligations, the telco argued that the wholesale broadband market was also to blame for the service and pricing headaches experienced by NBN customers.

“While in no way trying to diminish the fact that we have not met our commitments here, the fact that the three biggest retailers of NBN services have all suffered the same fate reinforces the urgent need for Australia to fix NBN pricing and service quality once and for all. The way Australia’s broadband market is regulated is simply not working,” said Amanda Hutton, Telstra Acting Group Executive for Consumer and Small Business.

Telstra: time for NBN Co to ‘hit the reset button’ on price

Telstra took aim at the existing pricing structure implemented by NBN Co, which is currently up in the air as the ACCC waits for a new pricing proposal to be submitted. NBN Co’s previous proposal, which was made public in May this year, was heavily criticised by both telcos and the ACCC itself, with the latter forecasting that it could lead prices to double by 2040.

“There is an ongoing review of NBN wholesale pricing and service standards being led by the ACCC. We hope this will deliver a more sustainable industry pricing structure that will keep broadband affordable and provide a better service for our customers,” said Ms. Hutton.

“NBN Co are expected to put forward their proposed regulatory approach within days. This is an enormous opportunity to hit the reset button and regulators, government and industry must come together to resolve this so we can all benefit from quality broadband services at reasonable prices.

“Without this reform the multi-billion-dollar investment the Australian public has made in creating the NBN will be put at risk. Retailers and their customers will increasingly choose alternatives that can deliver better, more reliable connectivity for less.”

The statement echoes the sentiments made by a Telstra spokesperson in May, who told Canstar Blue that both the ACCC and the Australian Government should focus on broadband affordability and innovation rather than profits. Telstra was far from the only telco to call out NBN Co’s proposal at the time, with Optus and TPG both arguing that the wholesale price structure would lead to increased costs for NBN customers.

TPG didn’t immediately jump to criticising NBN Co in its response to last week’s Federal Court decision: however, Optus’ official statement mentioned the network’s issues around performance, alongside confirming changes made to internal Optus processes to prevent future incidents.

“We have made changes to our processes to address the concerns raised by these proceedings and to address issues arising from NBN’s performance limitations,” said an Optus spokesperson.

“We will continue to engage with NBN to provide customers the best experience possible.”

 Check your internet speed

Why were Telstra, Optus and TPG fined?

Telstra, TPG and Optus all admitted to making false or misleading statements and failing in their obligations to ensure customers were able to achieve advertised speeds. Last week the Federal Court agreed with the ACCC’s findings and ordered Telstra to pay $15 million, Optus to pay $13.5 million, and TPG to pay $5 million in penalties. This was in addition to the compensation and refunds each telco had already provided affected customers.

According to the ACCC, close to 120,000 NBN customers were impacted by the policy breaches, which occurred between 2019 and 2020. All three telcos had made false or misleading statements on their websites, in emails or in telesale calls directly to consumers that misrepresented the potential speeds available on Fibre to the Node (FTTN) NBN plans.

Customers on FTTN connections are limited in the maximum speeds available at their address, but an accurate estimate of speeds by providers can help ensure customers aren’t paying for an unachievable performance. Telstra, Optus and TPG are each required to check the maximum speeds available to FTTN customers, inform those customers if their service is falling short, and offer options such as a switch to a lower-priced plan or a complete service cancellation at no charge.

All three telcos were found by the ACCC to have advertised unsupported NBN 50 or NBN 100 speeds to FTTN customers, and had failed in their obligation to diagnose broadband issues and offer customers a more suitable alternative. As such, thousands of Aussies were stuck on plans that weren’t compatible with their home’s NBN connection – and were paying extra for speeds their connection simply couldn’t achieve.

Since the ACCC initiated proceedings in 2021, Telstra, TPG and Optus have each undertaken remediation programs and contacted affected customers to offer refunds or alternative plans.

What you should know about NBN speeds

While super-fast download speeds are now offered by most NBN providers, the actual speed available at your home will depend on the NBN connection type used at your address. Fast NBN 250 and NBN 1000 plans are only compatible with Fibre to the Premises (FTTP) and some Hybrid Fibre Coaxial (HFC) connections, and even NBN 100 plans may be out of reach for many Australian addresses.

Telcos are required to inform customers if their choice of NBN plan is too fast for the technology used to connect their home to the NBN. However, the penalties imposed on Telstra, TPG and Optus show that NBN providers can drop the ball, and are a timely reminder for customers to be proactive about their broadband plan and speeds.

Knowing both the NBN speed you’re paying for and the speeds you’re actually receiving, can help ensure you’re not overpaying for an underperforming plan. As NBN plans are priced by speed tier – and those costs may be set to increase thanks to NBN Co’s upcoming proposed wholesale price changes – there’s never been a better time to test your NBN speed and make sure you’re on the best NBN plan for your needs and budget.

Compare NBN plans

If you’re unhappy with your current NBN plan, or looking for a cheaper monthly price, we’ve compiled a range of plans across four speed tiers in the below table.