Xtra may have broken law with broadband ads: ComCom

The Commission is investigating broadband marketing claims by ISPs

Following complaints over Telecom Xtra’s broadband advertising, the Commerce Commission says that in its opinion, Xtra may have breached the Fair Trading Act by misleading the public as to the characteristics of its DSL service.

Specifically, the Commission points to the terms “up to” and “theoretical speed”. It says Xtra could not supply the “up to” speeds promised on a consistent basis and the “theoretical speeds” were unobtainable, according to Deborah Battell, director of the Commission’s Fair Trading Branch.

The Commission is also expressing concern over Xtra’s use of terms such as “faster and cheaper” and any combination thereof.

These terms may mislead customers as to what they can expect to receive since not all service offerings will be both faster and cheaper.

Battell notes that the above is the Commission’s opinion. Only the courts can decide if the Act has actually been breached, she says.

Xtra has changed its advertising, Battell says, and no longer uses the terms “up to” and “theoretical speed”, she says.

The “faster and cheaper” representation has also been removed in Xtra’s broadband advertising where it’s not true for all offered plans, she adds.

Other ISPs are currently being interviewed by the Commission over their advertising, Battell adds. The Commission expects to have resolved these investigations by the end of the year, she says.

Lenska Papich, spokeswoman for Xtra, says Xtra is aware of the Commission’s investigation and can’t comment further until the next steps are determined.

However, Papich says Xtra continues to provide information to the Commission to assist with its current industry investigations across ISPs.

According to Papich, the government and the industry have asked for “full speed” broadband. This, she says, resulted in Xtra’s recently launched Maximum Speed broadband plans that offer speeds as fast as a customer’s line allows.

Asked what Xtra is doing to address the issue of customers being unsure what performance they will receive with the plans they buy, Papich refers to Xtra’s previous offerings.

These had a stated maximum downstream speed, such as 3.5Mbit/s, and Xtra has, she says, actively contacted customers unable to achieve such performance to discuss other options with them.

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