TPG has offered to pay $5m in damages for signing customers up to higher-speed NBN plans when their fibre-to-the-node connections were not capable of achieving the speeds promised.
In August last year, the ACCC took TPG and its rivals Optus and Telstra to court alleging false or misleading representations in advertising 50Mbps and 100Mbps on fibre-to-the-node services.
FTTN technology, unlike full fibre to the premises, depends on the quality of the copper line from the node to the home to determine the maximum speed. The longer the line or the more the line has degraded, the slower the connection.
The companies told these customers they would test the maximum speed and offer remedies if it was lower than their plan’s maximum. The ACCC alleged the companies failed to do so.
In a federal court hearing on Wednesday, lawyers acting for TPG and the ACCC said an agreement had been reached where it admitted it had contravened Australian consumer law. This took place in the period of 13 months ending in April 2020.
The court heard 21,000 TPG customers had been on plans where their connection could not offer the maximum speed they were paying for.
TPG had refunded customers a total of $2.5m since the Australian Communications and Media Authority originally began investigating, the court heard, and had taken moves to prevent it happening again including by making changes to the system used by the company to determine the maximum possible speed on a connection.
The court also heard that TPG had become a very different company since it was acquired by Vodafone in July 2020, with significant corporate and management changes. The company used to run on “very lean resources”, the court heard, leading to deficiencies in the speed test system. The court heard issues with getting the information from NBN Co itself was also a factor.
“We have engaged openly and transparently with the ACCC to reach an in-principle settlement to resolve this matter without the need for a contested hearing,” a TPG spokesperson said.
Justice Nathan Moshinsky reserved his decision on whether to accept the agreed orders between TPG and the competition regulator, noting that cases for both Optus and Telstra are still before the court.
Telstra has a hearing set down over four days from 27 September, while Optus’s case will be heard in early November.
