Monday, December 7, 2009

Telecom breaches Fair Trading Act again

Telecom has pleaded guilty to 17 breaches of the Fair Trading Act. The breaches related to the company's advertising of its Go Large broadband plan and 'unleashed' broadband plans in late 2006

From August to November 2006, Telecom and Xtra undertook an extensive nationwide advertising campaign to promote the Go Large broadband plan and made a number of representations such as “unlimited data usage and all the internet you can handle” and “maximum speed internet”.

Yeah right.

In December 2006, the Commerce Commission launched an investigation following complaints from Xtra customers who found that the internet speed was constrained, in some cases to dial-up speed and others also found they experienced slower speeds on their new Go Large plan than on their previous plans. The overall impression of the campaign was that the Go Large plan was unique in that it would offer unconstrained faster speeds and no data caps.

However, further details available in the fine print of advertising and on Telecom’s website gave the disclaimer ‘as fast as a user’s line will allow’ and outlined the possibility of constraints which included a ‘traffic management policy’ for use during peak times and for those using peer-to-peer applications, such as downloading music and movies.

The Commission established that a change made in early December 2006 to how the Go Large plan was administered meant that the traffic management policy applied at all times and across all applications, not just to peer-to-peer traffic. This meant that in some cases customers were not experiencing unconstrained speeds.

Are we surprised? Hardly. The only surprise is that people still want to use Telecom and its subsidiaries.

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