Telstra, Optus, TPG to face court over underperforming FTTN services

Telstra, Optus and TPG are to be brought before the federal court over allegations they mishandled fibre-to-the-node customers with underperforming services.

The court action, filed by the Australian Competition and Consumer Commission (ACCC), is the latest chapter in a saga that started back in late 2017.

The issue stems from inaccurate (or non-existent) line speed data provided by NBN Co at the point of sale, and then by retail providers not dropping all users back to attainable (but cheaper) tiers if they had signed up to a plan speed they could not achieve.

Both sides say they have improved their processes since 2017, in part as a result of system changes by NBN Co and specific court-enforceable undertakings agreed to by the RSPs. RSPs still argue that NBN Co's systems are inadequate or ineffective.

The ACCC alleged today that those undertakings had been breached, and that not all impacted FTTN users had received a promised fix.

Telstra, Optus and TPG Internet (now part of TPG Telecom) allegedly kept taking money from “many customers” for plans their FTTN connections did not support.

“Telstra, Optus and TPG were well aware of these issues and had earlier given undertakings to the “We are very disappointed that these companies do not seem to have taken seriously the undertakings they gave to the ACCC,” ACCC chair Rod Sims said in a statement.

In addition to allegedly failing to notify some impacted customers and offer a change of plan, the ACCC also alleges the three retail service providers (RSPs) “didn’t have adequate systems in place to implement the speed checks, notifications and remedies they said they would carry out”.

The ACCC said its evidence for the cases came from Telstra self-reporting breaches, and from underperformance data collected by the commission’s whitebox speed test program.

Sims noted that Telstra, Optus and TPG “have promised to compensate consumers even before the court case is finalised”.

A TPG Telecom spokesperson apologised for the “oversight” and said it was unintentional.

“We will be making things right with the impacted TPG Internet customers who didn’t receive a notice about the maximum attainable speed of their NBN service,” TPG Telecom’s spokesperson said.

“For the oversight, we are sorry.

“We will be contacting the impacted TPG Internet customers and will offer them the option to move down a plan and receive a refund, leave and receive a refund or stay on their current plan.

“There was no intention whatsoever by TPG Internet to avoid its obligations and its processes were intended to provide the correct ... information to customers.”

TPG Telecom said two factors were behind the error.

“The first was failure by NBN Co to provide timely and accurate speed information to TPG Internet,” the spokesperson said.

“The second was anomalies in TPG Internet’s legacy processes in place since 2017, and these have been fixed post-merger [with Vodafone].”

An Optus spokesperson "acknowledged the ACCC's decision to commence proceedings" and said the telco is "carefully considering this matter.  

"The ACCC has acknowledged work by Optus to contact customers who are experiencing issues with their NBN service," the spokesperson said.

"Optus will continue to work to measure NBN speeds and inform customers of the options that are available to them."

Telstra group executive for onsumer and small business Michael Ackland apologised for "letting these customers down".

"We are managing this important and complicated issue proactively and accept that there are some things that we didn’t do right," he said.

“We self-reported these issues to the ACCC and we’re already taking steps to make sure customers are offered remedies and our processes are improved.

"As we’ve seen today with Optus and TPG, this issue is not isolated to us and is happening more broadly across the industry because of a complicated process."

The ACCC said it would seek a range of declarations and penalties from the three telcos.