Guest post from John Allen of Rural Connect (originally posted 6 June). 

Broadband retail service providers have a tendency to waggle their finger at the consumer when things go awry.  But a review of the telco industry’s proposed Product Disclosure Code does not go far enough to banish this attitude.

The classic example of this blaming attitude occurred back in 2009/10 around Telecom’s ‘Big Time’ and ‘Go Large’ broadband plans.

Released in July 2009, the Big Time plan offered unlimited speed and, more importantly, uncapped data.

At the time, this was the only plan offering unlimited data, so thousands of customers flocked to sign up to it. Which of course is why it was offered.

The plan was pulled less than 12 months later because of an “extreme minority” that downloaded huge amounts of data.  Telecom managed data traffic by throttling speeds, but some users found a way around this, making the plan “increasingly hard to manage and keep in market.”

Telecom placed the blame for the plan’s demise on its customers.  It said that “as the only ISP offering unlimited data, it ended up with all the vampires”.  Meaning tech savvy, high volume users switched to Telecom to take advantage of the uncapped data.

Telecom would have known that an uncapped data plan would result in some users consuming as much data as they could possibly suck down.  The infamous ‘Go Large’ plan from 2006 would have taught them that.

Go Large promised, “unlimited data usage and all the internet you can handle” and “maximum speed internet”.  It did not deliver this and in 2009, the Commerce Commission brought a prosecution that resulted in a $500,000 fine under the Fair Trading Act.

The practice of discussing maximum speeds possible for a broadband technology still occurs but is now not so prevalent.  Witness news reports touting Vodafone’s new 4G mobile broadband service as reaching speeds of up to 100Mbps.

That speed is hypothetical and simply will not be realised in everyday use.

The Telecom example now ensures that hypothetical maximum speeds are not mentioned in contracts or advertsing.

Which is in part what the proposed Product Disclosure Code is about – providing telecommunications Retail Service Providers with minimum standards for the disclosure of information about Broadband Plans.

There are six principles to the code.

First is about making product information clear, readable and easy to find and understand.

Second is that an appropriate level of detailed information is available to consumers at the right point in time.

Third is to use clear, standardised terms and language to allow for easy comparisons.

Number four is that plan information be kept up to date.

Next is providing consumers with accurate and reasonable assessments of how Broadband Plans are priced, will perform, and the technology used.

Finally is transparency around Broadband Plan features and price, including any restrictions.

The first four principles are all fine and proper and will enable Consumers to make easier comparisons between different offers.

The last two is where the issues become grey.

For example, the code does not require telcos to be consistent in what news articles say compared to what their advertising and contracts detail.

The main issue is that RSPs should give the bottom line of their service’s performance.  Not the top line, or even an average line.  For example, the bottom line on Vodafone’s RBI service is that in times of high usage, speeds may drop to the design limit of 45kbps.

That’s around dial-up speed and had Telecom’s Go Large plan detailed that, the vampires would have been fewer and also blameless.