Optus has amended advertisements for its "unlimited" internet and phone bundles but will pursue a Federal Court declaration that "unlimited" in the context of the internet wasn't understood by consumers to refer to the "speed" of connection.
The telco had previously marketed an "unlimited home phone and broadband bundle" that included 50 GB of "superfast" broadband that was then throttled to a speed of 256 Kbps.
The Australian Competition and Consumer Commission (ACCC) took action against Optus over its advertising of the plans in June.
In the Federal Court yesterday, the telco made some "undertakings" with respect to the editing of some of its advertisements in the "belief/hope/submission" that the new versions were now compliant with Australian laws.
Optus' barrister Norman O'Bryan SC presented one of the amended advertisements to the court. It "retained the word 'unlimited'" in a box-out but made it "very clear in that box that there was 50 GB of superfast broadband and then the broadband drops to a 256 Kbps rate", he said.
"That, Optus believes, is not an improper or unlawful use of the term 'unlimited'," O'Bryan SC said.
"Speeds of internet usage are, of course, always limited. The speeds of everything are limited, including the speed of light.
"No consumer with any knowledge of broadband would be misled that the use of [the word] 'unlimited' [in that context] was a reference to speed."
That was challenged by Justice Anthony North.
"If you didn't have the qualification there it would be misleading, wouldn't it?" he quizzed Optus.
"It would be to me because I'd expect getting broadband at a constant rate and very fast."
"Well, that's a possible interpretation Your Honour," O'Bryan responded.
Justice North continued: "Obviously I'm speaking as a member of the general public now. You don't expect the speed reduction to occur unless you're told."
O'Bryan said: "We'd submit it could not mislead anyone because no one understands 'unlimited' with reference to speed. The difficulty with that interpretation is that broadband speeds are not continuous."
Optus would seek a ruling on the lawfulness of the amended advertisement and interpretation of the word 'unlimited' when the case was heard in October.
"This case, when it resolves itself, will end up resolving itself around a formula of words which may or may not satisfy the ACCC in the final result," O'Bryan put to Justice North.
"Optus is very concerned to ensure it is not subjected to further proceedings after this case. It wants to be close to resolving the lawfulness of its advertising. [This will happen] if it has that context around the word 'unlimited'.
"Optus, of course, wants to continue advertising in a way which does not attract the ire of the ACCC and the court. It has amended its advertisements in ways it believes will fully comply with the law and should satisfy the ACCC.
"By the end of the case, Optus wants to know its advertising campaign is lawful and will not be subject to more litigation."
He said Optus would leave it to the court to rule on whether its newly-proposed advertisements were acceptable in the eyes of the law.
The parties used the directions hearing to agree to a timetable for the filing of further affidavits and expert evidence, and for the responses to those affidavits to be filed.
Two days were set aside for hearings in October, although it was expected that a determination on the contentious advertisement - dubbed by O'Bryan as "unlimited elephants" in reference to the animal theme used - would likely take only a day.
"We're really just down to that one ad," O'Bryan said. "The matter has narrowed considerably [since it was first filed]."
The new advertisements had not been published.
Justice North congratulated both parties for narrowing the complaint and bringing amendments to the table.