ComCom Strengthens Broadband Marketing Guidelines To Boost Consumer Choice

The Commerce Commission is consulting on newly updated Broadband Marketing Guidelines to further strengthen the ability for Kiwis to compare and choose the best service for their needs.

The Guidelines are being updated following a review of the original guidance issued in 2021 to address concerns about marketing conduct, and reduce consumer confusion, particularly during the transition away from copper.

Telecommunications Commissioner, Tristan Gilbertson, says the review shows a positive response from industry and an improvement in broadband marketing conduct across the board – particularly for Kiwis coming off copper, where complaints have dropped by 36%.

“We’re pleased to see that, off the back of this industry engagement, Kiwis are now getting more of the information they need to make informed purchasing decisions. In saying that, our review also identified opportunities for improvement in some areas to promote even better comparison and choice.”

The revised Guidelines focus on clarifying broadband speed disclosures and standardising the grounds for an ‘exit right’ to prevent lock-in issues.

“Providers have moved away from the unhelpful and confusing practice of using ‘up to’ theoretical maximum speeds and are instead using independently verified speeds from the Commission’s Measuring Broadband New Zealand (MBNZ) programme which tell consumers what speeds they're likely to get in real life,” Mr Gilbertson says.

“This feeds into a key requirement of the original Guidelines that providers should offer consumers an ‘exit right’ if real world performance is materially different to what was advertised – and we’re pleased so see most providers now offer this.”

However, Mr Gilbertson says the materiality test varies between providers and the Commission wants it standardised so all consumers are treated on an equal basis and can more consistently exit without penalty if they run into performance problems.

The Commission’s review also found some providers show MBNZ speeds for fibre broadband, but not for wireless broadband, creating a significant information gap for consumers.

“Speeds are very useful to consumers when comparing plans and identifying what’s right for them – so we want to make sure that peak time download and upload speeds are always provided whenever available from MBNZ.

“Finally, we want consumers to have access to at least 12 months usage and spend information, as is the case with mobile, so they can determine whether they’re on the best plan and technology for their usage and spend. Some providers are already doing this and we’d like to see it become standard practice across the board.”

Mr Gilbertson says that providers are expected to correct any gaps to compliance, and the industry body, the Telecommunications Forum (TCF), is expected to flow through any changes to industry codes within six months of the revised Guidelines being finalised.

Consultation is open until 6 November 2024 and feedback can be sent to market.regulation@comcom.govt.nz

Background

In November 2021, the Commission issued Guidelines to the industry to address increasing concerns in relation to broadband marketing including:

• Consumers coming off copper not being informed about the full range of options available to them when being presented with offers to move to alternative broadband services;
• Consumers on copper-based services being pressured to move quickly to alternative broadband services on the basis of copper or PSTN withdrawal when copper services were not actually being withdrawn; and
• Consumers not being given appropriate information or being misled about the speed and other performance characteristics of broadband services.

The Guidelines set out the Commission’s expectations for providers dealing with consumers coming off copper and for advertising broadband services more generally.

The Guidelines were issued under Part 7 of the Telecommunications Act 2001, dealing with retail service quality (RSQ) matters, and were subsequently converted into industry codes by the TCF.

The Commission was satisfied by the response from industry to the original Guidelines.

Consistent with its commitment to ensuring its RSQ work is improving outcomes for consumers, the Commission reviewed the impact of the Guidelines over the period since they were issued in 2021, including by auditing provider marketing material and through information disclosure requests to larger providers.

This process resulted in the findings and proposed amendments set out above.

© Scoop Media