ACCC to throttle Optus' 'unlimited' claims

by David Binning | Friday 4 June 2010

In a case with big implications for the telco industry, the ACCC has initiated proceedings in the federal court against Optus in relation to 'unlimited' broadband and phone advertising

The ACCC has initiated proceedings in the federal court against Optus charging that the carrier deliberately misled and deceived consumers by advertising a number of products as ‘unlimited', which were subsequently found to be tied up with hidden restrictions.

The regulator will focus in particular on recent TV, radio and print ads plugging Optus' ‘$70 pre-paid Turbo Max plan' (a pre-paid phone offer), with the ACCC also objecting to the carrier's use of the word ‘unlimited' in advertising for its broadband products as well as home telephone plans.

The case is expected to provide more clarity for consumers regarding carriers' claims of unlimited services, especially as demand increases for affordable broadband products catering to bandwidth hungry services such as video on demand.

AAPT made an announcement this week spruiking its unlimited ADSL2+ service, launched in February, as the ideal option for iPad users keen to start gobbling up rich content and new applications and worried about recent reports of 3G ‘bill-shock'.

But while AAPT says that its service the only truly unlimited offering in Australia, its true price would frighten many users.

In order to be eligible, users must first sign up for a minimum of 24 months to the "Anytime Value^TM/Home Chat^TM Starter/ Home Chat^TM Family + AAPT LiveNet® Unlimited 24/7 + AAPT Music Pack", according to the terms and conditions on the company's website.

This translates into a minimum commitment of $2398.80 over 24 months.

A spokesperson for AAPT said today that the company was not concerned about the ACCC's proceedings against Optus and had not "received any feedback from the regulator suggesting our advertising of this plan is misleading."

Mobile scrutiny
Claims of unlimited mobile phone services have also come under recent scrutiny, most recently in February when the ACCC disciplined TPG for what it saw as the company's misleading advertising blitz for its ‘Unlimited Cap Saver' mobile phone plan.

TPG subsequently made several court-enforceable undertakings to not advertise mobile plans containing number restrictions and hidden charges as unlimited "without including an appropriately prominent disclaimer to the effect that exceptions, terms and conditions apply.

Recent shock and confusion at charges for mobile data services such as 3G - expected to increase even further with the arrival of tablet devices like the iPad - has further intensified calls for greater transparency of claims made by mobile service providers.

Brett Winterford contributed to this story

See more about: accc | broadband | optus | unlimited | isp

Comments: 12

phoenix1 4 June 2010	I nearly got bitten by one of these 'unlimited broadband' deals with Telstra. Had a Telstra Hawker come to the door with an offer of saving on mobile phone use, telephone use, Foxtel and unlimited cable broadband. The combining of phone, mobiles and Foxtel added to savings of $30 along with unlimited broadband for $60 per month, locked in for 24 months. This blew our current ISP's deal with Naked ADSL2+ out the water. Had a 10-day cooling off period, too, just in case. Well, as I was sifting through paperwork and the call to Telstra's call centre (on hold for around 55 mins, mind you) I found out I'd signed up for $20 discount across all products and the broadband is throttled back after 12Gb... so much for unlimited. Due to fatigue, I agreed and dercided to analyse this deal within the 10 days cooling off. Decided we would be better off by close to $700 going Naked ADSL2+ with our current ISP Adam Internet, and called Telstra to pull out of the Telstra deal within the 10 day cooling off period. Obviously, it didn't work, because for the next month, we were hounded by Telstra Cabling Services to install the cable internet we cancelled, we lost our current Foxtel deal, got massive bills for early termination of a contract that was cancelled within the cooling off period and charges for Foxtel hardware we already rented, etc. In the end I had to get the TIO involved. Thankfully, Telstra finally recognised their mistake after the TIO were involved and re-imbursed everything, including (so it seems) admitting their mistake to Foxtel, as I got my old Foxtel deal back! Needless to say, we no longer have any Telstra owned products here now (thanks Adam Internet Naked ADSL2+) other than their 50% Foxtel ownership and the copper pair that run to our first socket (yes, no dial tone). 'Unlimited Broadband' does NOT mean 'Uncapped Broadband', which is something the Telstra Hawker neglected to tell me. Approach Unlimited Broadband with caution!! Comment made about the PC Authority article: ACCC to throttle Optus' 'unlimited' claims? In a case with big implications for the telco industry, the ACCC has initiated proceedings in the federal court against Optus in relation to 'unlimited' broadband and phone advertising What do you think? Join the discussion.
technotebook 4 June 2010	@phoenix1 sadly your story is not the first that I have heard of this and certainly not the last. What I cannot understand is how ANY company is allowed to call something "UNlimited" when in fact a limit is put in place whether it be speed or that you can download as much as you want at an extra cost. I hope that it serves as a precedence for other telco's to stop the misleading behaviour but that is just me. Stuart http://stuartryan.com
gnome 4 June 2010	Yes, but some of the SPs still seem to think they can hide behind legalistic opinions to take their customer representations right up to, or beyond, the edge of the law. They seem to think all their endusers are idiots.
avoidz 4 June 2010	I thought most people stopped believing those "unlimited" broadband plans years ago.
petergaskin 4 June 2010	cant believe that AAPT think they are innocent. Would love the ACCC to take a look at some of their unlimited broadband plans. Its quite simple - the ACCC should define unlimited as referring to the normakl broadband speed. Then if the ISP intends to change the broadband speed after so many downloads/uploads, then the plan cant be called unlimited. The same thing should apply where the unlimited refers to mobile calls with the same carrier - but only after you have used up your credit - thus you cant call any other network! Then there is the unlimited sms plans - as long as you have not used up your monthly credit! Yes, the ACCC still has a lot of work to do!
retta1 4 June 2010	The fact that people still believe the Unlimited claim I am staggered! NO company no matter how good they make things sound is what they say!
wbeasley 4 June 2010	it's about time. i was sick of seeing Optus mangle the English language with their ads. UNLIMITED does not mean 4000 minutes or some variant. That's limited - a bit like the IQ of the ad people who came up with the idea to palm this off on people. let's hope the courts whack an unlimited slap on their wrists! and we see no more of this stupidity. It's about time the ACCC looked into creating some sort of plan comparison tool too for advertising. I really don't think a capped plan for $49 (or whatever) that has $400 of call value is real when they charge you outrageous amounts per minute. Make them tell you the unit pricing (and no flag fall rubbish anymore). Bit like supermarkets where you can see exactly how much each brand really costs you. Someone smart can work out the formula for comparing plans: local, STD and mobile unit pricing for each plan. And stop the greedy telcos adding massive charges for smallish excess downloads. Telstra should be embarrassed about the people getting $25,000 download bills. Shame indeed! /rant
jasecorn 4 June 2010	"Telstra should be embarrassed about the people getting $25,000 download bills. Shame indeed!" Telstra caps consumer excess usage charges at $300. In addition to that, they send emails and sms's at 50%, 80% and 100% usage, and continue to notify with the actual dollar amount of excess usage at regular intervals. Only one Telstra consumer internet plan has any excess usage fee's, and that's the 2gb adsl or cable plan. ALL Telstra consumer wireless plans have zero excess usage fee's and simply throttle the connection.. Most other providers still charge excess usage on wireless. So your point is moot and simply bias towards Telstra, as Telstra appears to be one of the few actually doing something about excess usage fee's across all plans and broadband technologies. Optus had the disgraceful practice of throttling peoples speed, but only AFTER charging the first 2gb over the usage allowance. If you're going to throttle the speed, do it when the limit is reached, don't grab 2gb of fees first Jason.
Bozo01 6 June 2010	Can someone explain what this sentence from the AAPT terms and conditions means please? "The product is only available to residential customers who sign up to the Anytime Value™/Home Chat™ Starter/ Home Chat™ Family + AAPT LiveNet® Unlimited 24/7 + AAPT Music Pack – 24 months Bundle (AAPT 3-in-1 Bundle) or who purchase AAPT LiveNet® - Unlimited 24/7 standalone and is only available for residential use and on a 24 month plan." Is this saying that the 24/7 unlimited usage is only available in the bundle or the standalone plan, but no other plans? If it is, then PC Authority made a big blooper with their minimum commitment price.
Bozo01 6 June 2010	Um, let me take that back on the blooper with the commitment price. $2398.80 over 24 months is $99.95 a month which is what they advertise the 24/7 unlimited plan at.
gnome 7 June 2010	Confusion understandable, Bozo01, I've heard corporate lawyers boasting about how cleverly they have drafted their SFOA and associated verbiage.
Slatts 7 June 2010	gnome wrote: Confusion understandable, Bozo01, I've heard corporate lawyers boasting about how cleverly they have drafted their SFOA and associated verbiage. Damn gnome! verbiage!?:-s