The ACCC has released an Information Paper which provides guidance on how the ACCC approaches claims about broadband internet speeds.

The ACCC says that ISP’s  are likely to breach the Trade Practices Act if:

• they use maximum theoretical download speeds to describe the speeds available to users of internet services
• they have no basis to believe the represented speeds will be available to a future customer or their basis is not reasonable
• they only provide a maximum speed and no further information on the speeds actually available or the factors affecting speeds

The ACCC is concerned with ADSL2+ being described as a 24Mbps/1Mbps service and with blanket claims that 24Mbps/1Mbps is an “up to” or “maximum” speed.

The ACCC’s guidelines say that:

• ISPs should avoid using hypothetical speeds in headline claims describing a service and in the names or titles that ISPs give to particular plans.
• Headline speed claims could be avoided entirely for descriptions such as “ADSL2+”. “Maximum” or “up to” claims could be avoided in favour of typical speeds or a typical range of speeds.
• If the stated speed cannot be provided to a single customer then it is misleading to describe a service as reaching “up to” that speed. Similarly, if the stated speed can only be delivered to a limited number of customers, but the advertisement is directed to the public at large, there may be a contravention of the TPA.
• ISPs must be able to substantiate stated maximum or “up to” speeds as being achievable by users of their services.

The ACCC monitors advertising by ISPs, and has stated that it will continue to closely monitor advertising of internet speeds to ensure that high-speed broadband services are appropriately qualified.

The Paper makes it clear that all ISPs must comply with the TPA regardless of their size or whether they are a network owner or a reseller of others’ services.

The Information Paper focuses on Asymmetric Digital Subscriber Line (ADSL) services and, in particular, on ADSL2+ services. However, the ACCC warns that ISPs should ensure that all advertisements for internet services comply with the TPA and that these principles apply also to cable and wireless broadband as well as 3G High-Speed Downlink Packet Access (HSDPA).