Wednesday, October 6, 2010

"Unlimited" download plans a fraud

THE competition watchdog claims slowing broadband speeds after customers exceed a download limit on an "unlimited" plan is like selling them a Ferrari with one gear.

But the judge hearing a case between SingTel-owned Optus and the regulator said throttling broadband speeds to 256 kilobits per second (kbps) was more like selling a crumbling car.

Advertising unlimited broadband gave customers the impression they were getting a Ferrari, "but what is disguised is the fact that the steering wheel disintegrates after 10 kilometres," Justice Tony North said in the Federal Court in Melbourne.

The Australian Competition and Consumer Commission took action against Optus in June for misleading and deceptive conduct, claiming its advertising campaign for unlimited mobile and broadband plans actually included several limitations.

Optus has stopped using the word unlimited in advertising and agreed its mobile plan included several limitations, which were not adequately disclosed.

However, there was disagreement yesterday whether throttling broadband speeds limited service, as customers could still download as much as they liked at the reduced speed. Optus would slow broadband speeds from several megabits per second to a few hundred kilobits once customers downloaded 30 gigabytes. Hence the sports car analogies.

Late last week, the ACCC sought to amend the claim to describe the throttling as "significant constraint" on a service that was sold as unlimited. "It is a very coloured word and it ought not be used if indeed there is actually a limit or restriction on access, which occurs here," counsel for ACCC Colin Golvan, SC, said.

He presented "unlimited" plans from other providers as evidence of unthrottled plans, but counsel for Optus, Norman O'Bryan, SC, claimed these also contained speed limitations and were not universally available in Australia.

Optus has been granted 10 days to investigate other unlimited plans on the market and to gather evidence of whether consumers were significantly constrained by the throttling.