Telcos called into line by ComCom ahead of copper withdrawal feeding frenzy

Wednesday, 4 August 2021

Watchdog is worried consumers are being pressured to move off copper services even in areas where that is not necessary and are being poorly informed about their options.

Complains that telcos are confusing customers over their broadband options ahead of the gradual closure of the copper phone network have prompted the Commerce Commission into action.

Network operator Chorus could start withdrawing copper phone and broadband services from some areas where the uptake of ultrafast broadband is high from the start of next month.

But telecommunications commissioner Tristan Gilbertson said the watchdog had received complaints that consumers were receiving “incomplete, confusing or potentially misleading marketing information” about their options for switching to alternative technologies.

The commission was worried that customers in some areas where copper broadband and phone services were not scheduled to be withdrawn had been “pressured to move immediately to alternative services”, he said.

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Some marketing materials about the alternative technologies – which are essentially fibre, cable and wireless broadband – didn’t reflect their real-world performance, he said.

Spark and Vodafone have been strongly promoting wireless broadband in recent years.

Telecommunications commissioner Tristan Gilbertson had foreshadowed Thursday’s action in April but says the need for change is “urgent”.

Gilbertson had foreshadowed action in April when he told Stuff the commission was looking to release guidelines to ensure internet providers were upfront about the options facing the 30 per cent or so of consumers in UFB areas who could start to be forced off the copper phone network from September.

He said then that the commission “certainly didn’t want to hear that customers are being led to believe that fixed-wireless is a substitute for fibre because it is not”.

The Commerce Commission has now published an open letter “urgently seeking views” on proposed new marketing principles aimed at reducing consumer confusion.

“We expect retail service providers will bring their marketing conduct into line with these principles as quickly as possible, so that consumers on copper-based services can make informed decisions about the alternative telecommunications services best suited to their needs,” Gilbertson said.

“Our preference is for the industry to turn these into a retail service quality code through the Telecommunications Forum, but we are prepared to protect consumers with a binding code if this doesn’t happen,” he said.

The commission is demanding consumers be given sufficient notice by telcos that copper is being withdrawn from their premises so that they are not hurried into making a decision about replacement technologies.

Internet providers should avoid misleading consumers into thinking customers’ options were only those that they themselves could provide, Gilbertson said.

They should also encourage consumers to use independent information, such as that provided by www.broadbandmap.nz, to see what alternative services were available at their address, he said.

“Consumers will be told about the likely actual peak-time performance of different technologies and plans rather than theoretical maximums, ‘up-to’ speeds or labels like ‘super-fast’, which are meaningless when it comes to comparing alternative access technologies and plans,” the commission also said.

Gilbertson said the key thing all New Zealanders needed to know about copper withdrawal was that copper services would not be withdrawn from their area until UFB was in place.

“If fibre is their preferred technology, then it will be available to them and they will not be forced to use a different technology,” he said.

Technology Users Association chief executive Craig Young said the commission had sent a strong message, which it supported, that “things need to improve”.

“We've been carrying out our own independent investigations into the marketing practices of telecommunications providers around technology options for their broadband and phone services in general and based on our early findings are in strong support of the commission’s letter,” he said.

“We know that broadband and phone services can often be complex and are sometimes difficult to compare but the industry can do better to help consumers make informed decisions.”

The commission has set a deadline of August 27 for telcos to respond to its proposed marketing principles.