Telstra's free NBN speed boost backfires

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Telstra's free NBN speed boost backfires

As FTTN/B curse resurfaces.

A goodwill gesture by Telstra that upgraded 770,000 NBN customers to higher speed plans for free partially backfired when some customers’ lines couldn’t support the newfound gains.

The result is an unfortunate recurrence of an issue that Telstra was first pinged for in late 2017 - and means an extra 180,000 services that likely need to be downgraded again to a lower NBN speed tier (or offered some other form of remediation).

Over the past two years, Telstra and basically every other major retail service provider were progressively pinged by the Australian Competition and Consumer Commission (ACCC) for signing FTTN/B customers up to plans that their connections could not physically support.

As iTnews revealed at the time, RSPs fly blind when signing up new customers to copper-based services. 

There is no reliable speed data available at sign-up, so RSPs must revisit new sign-ups to FTTN/B services after their first month - once reliable speed data is available - and adjust retail plans accordingly based on what the line can actually support.

Telstra (and its budget brand Belong) offered 42,000 customers refunds, plan downgrades and/or fee-free contract exits from late 2017.

In early 2018, to support NBN Co’s efforts to re-baseline its most popular speed tier as 50Mbps, Telstra undertook a massive, well-publicised effort that saw around 770,000 mostly 25Mbps users moved up to 50Mbps plans for free.

But for whatever reason, it appears Telstra did not go back and review the effect of this mass free speed tier upgrade for 168,000 of those upgraded users.

That is, after a few weeks, it didn’t revisit whether the upgraded FTTN/B users were actually getting the full benefit out of their free upgrade.

It emerged today that those users couldn’t hit the new peak speeds. Thus Telstra is once more having to offer remediation and compensation to another cohort of NBN users.

“Telstra’s failure to carry out the speed checks meant that customers were not informed on whether they were getting the maximum speeds promised under the upgraded NBN plans,” the ACCC said in a statement on Thursday.

“It also meant they were not offered options to address slow speeds, such as exiting their contract or receiving a refund.

“Telstra has since committed to contacting all affected customers and refunding those who have been paying for the higher speeds but not receiving them. 

“It will also proactively move consumers to a lower speed NBN plan if they are not receiving any benefit from being on a higher speed tier NBN plan.”

Telstra self-reported the issue to the ACCC in August this year and began remediation efforts. 

There was no mention of any formal warning or other regulatory action from the ACCC on the issue, and the telco issued a contrite statement acknowledging its error.

“In November 2017, we promised that we would check the speeds customers were receiving four weeks after they set up a new NBN service with Telstra, and if the speed was below what was advertised we would let them know and work with the customer to fix the issue,” a Telstra spokesperson said.

 “We found that some customers who had moved from one NBN plan to another were not hearing from us on the speeds they were receiving and were paying for speeds they could not get.  

 “We let the ACCC know and started contacting customers as soon as we found out. 

“We’re disappointed that we’ve let some customers down and we know this isn’t good enough.”

Though telcos have been submitting compliance reports to the ACCC on their remediation efforts, it appears Telstra’s mistake might result in some renewed compliance checks for the rest of the industry.

“We are looking closely at other telcos who gave us similar undertakings to ensure they are checking speeds and providing options to consumers not getting the maximum speeds as promised,” ACCC chair Rod Sims said in a statement.

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