The Australia Competition and Consumer Commission (ACCC) has taken Dodo and iPrimus to court, alleging the two mislead customers about the internet speeds they could achieve on the NBN.
The ACCC alleges that between March 2018 and April 2019, Dodo and iPrimus, two Internet service providers owned by Vocus Group (ASX: VOC), made false or misleading claims on their websites about the speeds customers could expect if they signed up to their NBN broadband services.
"We believe many of Dodo and iPrimus' NBN customers would have been unable to regularly receive the advertised speeds during the busy evening period of between 7pm11pm," ACCC Chair Rod Sims said.
Sims says both ISPs used a "fundamentally flawed" testing methodology, developed by Vocus, to calculate the average speeds customers could achieve during evening periods.
Ultimately, the ACCC says this methodology was not a reasonable basis for their advertising claims about typical Internet speeds in the evening.
In August 2017 the ACCC also published its Broadband Speed Claims Guidance to assist providers in making claims about broadband performance. The ACCC says the method used by Dodo and iPrimus was not consistent with the watchdog's guidance.
"It is alleged that the testing methodology determined the 'typical evening speed' claims by using only the daily 75 fastest speeds observed across Vocus' entire network in the busy period, excluding slower speeds where a connection was more likely to be impacted by congestion," says Sims.
"Consumers need reliable broadband speed information in order to decide which provider to get an NBN service from. How broadband speeds hold up during busy evening periods is a critical issue for many consumers, and all service providers must have a reasonable basis for the broadband speed claims that they make."
In July 2019 Dodo was hit with a $360,000 fine for overstating what its NBN service could achieve.
The company, wholly owned by Vocus Group, has agreed to refund around 16,000 customers for claims that its entry-level NBN broadband plans were 'perfect for streaming'.
The plans in question were determined by the ACCC to not be an adequate solution for streaming at all.
These entry-level plans included maximum speeds of 12 megabits per second, and some only had 10 gigabytes of included data.
Business News Australia