Optus has been taken to court by the ACCC for allegedly misleading 20,000 HFC customers about their disconnection date in order to rush them onto the national broadband network.
The consumer watchdog claims Optus told customers they had as little as 30 days to move to the NBN before their HFC service would be disconnected.
The alleged "false and misleading statements" occurred between October 2015 and March this year, according to the ACCC.
Once an area is declared ready for service an end user generally has 18 months to move their service to the NBN.
Optus' alleged use of earlier timelines was "particularly concerning" given the telco receives a payment from NBN Co for each customer that migrates, the ACCC said.
These payments were agreed as part of Optus' $800 million definitive agreements with NBN Co for its HFC network.
NBN Co last year decided to ditch its plans to use the bulk of Optus' HFC network in favour of fibre-to-the-curb (FTTC) technology after it found the cost and time needed to bring the network up to scratch was prohibitive.
Optus is also accused of creating the impression that users were required to obtain NBN services from the telco, rather than any NBN retail service provider, between October 2015 and September 2016.
"Telephone and internet are essential utilities and it is unacceptable for Optus to treat its customers this way,” ACCC chairman Rod Sims said in a statement.
“As the NBN rollout continues throughout Australia, people will be making decisions about which provider to go with. ISPs must not mislead consumers when competing for business. We are keeping a close eye on this sector and will take action where we see wrongdoing.”
The ACCC is seeking declarations, injunctions, pecuniary penalties, a publication order, compliance orders and costs in its lawsuit against Optus.
NBN Co late last month put a freeze on all new HFC orders and delayed go-live for some of the HFC network as it works to improve the quality of service.
Update: Optus admitted it had provided "some customers" with "insufficient notice" of their options to migrate after late last year deciding to migrate cable customers to the NBN as soon as an area came online.
"As a result, some customers were disconnected before they migrated to the NBN," the telco said in a statement.
"Optus aims for a seamless experience for customers transitioning to NBN. We acknowledge that this process did not deliver on our intent to provide an excellent migration experience."
The telco said it suspended migration activities and reconnected affected customers once it became aware of their concerns.
It said it also compensated customers who had been disconnected "without sufficient notice".
"The ACCC’s action today relates to past processes that we have successfully addressed. We are working cooperatively with the ACCC to resolve its concerns," Optus said.
