And under the new guidelines the ACCC has said it is no longer acceptable for retailers to advertise an “up to” speed claim, warning that it can give the false impression that the speed advertised is achievable at most times, including during the busy period.

According to ACCC chairman Rod Sims, currently around 30% of NBN customers have been sold low-speed plans, “with many not realising their Internet speeds may not be any better — and in some cases worse — than existing ADSL services”.

“Many other NBN customers, while on higher speed services, experience lower than expected speeds during busy periods due to under provisioning of capacity by their retail service provider,” Sims says.

“It is not acceptable to advertise an ‘up to’ speed claim, as this can give the false impression that the speed advertised is achievable at most times, including during the busy period.”

Sims also warns that, in some cases, “it is not clear from the advertisements what sorts of Internet speeds consumers can expect at all”.

The ACCC says the guidelines just announced are designed to provide guidance for retailers on how to advertise speeds for NBN broadband services, including clearly identifying typical minimum speeds during peak periods.

Sims says the publication — Broadband Speed Claims – Industry Guidance — seeks to move retailers from advertising their services based on the maximum internet speeds that may be delivered during off-peak periods, to the speeds consumers can expect to achieve during the busy evening periods between 7pm and 11pm.

Sims says the ACCC has created standard labels it would like the industry to adopt in order to give consumers better information about what sort of speeds they can expect during the evenings and better allow consumers to compare plans.

“With this guidance, if you buy a ‘Basic evening speed’ plan you should generally not expect speeds much different to your pre-NBN experience. If you buy ‘Standard evening speed’ or higher plans, you should expect certain minimum speeds during busy periods.”

The ACCC says the guidance stipulates that if consumers are experiencing problems with their network connections or other faults that affect their service, they will be resolved quickly or offered a refund or cancellation of their contract.

Sims says that under the ACCC’s new guidance, “retailers should work quickly to identify faults and resolve customer complaints about the speed or performance of their retail services”.

“In circumstances where a retailer is unable to provide timely resolution of a speed problem, the retailer should offer refunds and alternative products or the option to leave their contract.”

According to Sims, providing such detailed guidance to industry is an unusual step for the ACCC.

“We judge, however, that such a step is necessary because the current advertising around NBN products is poor, which is unacceptable in the context of a forced migration to the NBN.

“While the guidance is voluntary, it provides a strong benchmark against which the ACCC, and more importantly the community, will judge the advertising of retailers. The ACCC will also be closely monitoring retailer compliance with the Australian Consumer Law.”

The Broadband Performance Monitoring and Reporting programme will make public the actual speeds achieved on the main plans of the main retailers and the ACCC says this visibility will inform consumers and push retailers to lift their game, with the speed advertising guidance complementing this by seeing consumers properly informed about what they are buying.

Sims says the ACCC consulted extensively with network providers, retailers, and consumer representatives in preparing the guidance, which builds upon six principles that the ACCC published in February this year.

He says the ACCC sees this guidance as a short term step as it seeks to “raise the bar'” and will also review the guide after 12 months to determine its effectiveness.

Under the new guidelines, the ACCC is suggesting retailers adopt the labels below, which have a number of interrelated qualifying criteria, including minimum typical busy period speeds and the minimum wholesale access service needed to supply various retail plans.

The particular usage profile that corresponds with each standardised label is set out below:

According to the ACCC, the labels were developed with a view to residential customers with standard, above standard, and premium broadband requirements receiving broadband speeds during the evening busy period that would still allow them a “good consumer experience”, having regard to the number and type of applications that they operate concurrently over their broadband connections.

The guidance also describes how the “minimum typical busy period speed” should be calculated.

The ACCC says the guidance encourages retailers to, in addition to applying evening speed labels, “provide consumers with more detailed speed information in their plan advertising should they wish to do so”.