The paper, Broadband Internet Speed Claims and the Trade Practices Act 1974, focuses on the industry practice of using hypothetical speeds as the basis of speed claims. These hypothetical speeds are unlikely to be achieved in the real world. By law, ISPs must not make representations that are misleading or deceptive, or are likely to mislead or deceive, making it important for their advertising to mention likely speeds instead of theoretical maximums.
"The ACCC is concerned that ISPs are using hypothetical speeds when these speeds are just that - available to the hypothetical consumer, not necessarily the real world consumer," said ACCC chairman, Graeme Samuel.
He added that the paper is designed to help ISPs comply with their obligations under the Trade Practises Act when advertising their broadband services and prevent consumers being misled as to the speeds achievable on various technologies.
The paper is directed at all broadband providers but the paper focuses primarily on ADSL2+ services. ADSL2+ can theoretically achieve rates of up to 24 Mbps but the speed consumers achieve is affected by a number of factors such as: distance from the exchange, electrical interference, number of other users on the cable, hardware and software, wiring and the website being accessed.
"The paper focuses on ADSL2+ because consumers may be attracted to these services by speed claims. As a new technology, consumers usually have less information than the provider of the service and may be misled by headline claims of hypothetical maximum speeds," Samuel said.
"The purpose of the information paper is to encourage ISPs to provide adequate information to consumers on the factors affecting the speeds obtained and on the actual speeds or range of speeds that the ISP expects it will provide to future customers."
The paper will be distributed directly to ADSL2+ service providers and is available on the ACCC website.