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The Australian Competition & Consumer Commission (ACCC) instituted proceedings in the Federal Court in mid-December against Australian telecom company Optus, alleging it misled customers about the need to move quickly from its existing HFC network to the National Broadband Network (NBN).

The ACCC alleges that between October 2015 and March 2017, Optus made false and misleading representations by writing to its customers to advise it would disconnect their HFC service within a specified time period as the NBN was coming to their area. However, the timeframes were earlier than Optus was contractually allowed to cancel the customers’ services.

“We allege that Optus’ misrepresentations put pressure on customers to move to the NBN sooner than they were required to. This is particularly concerning as Optus received a significant financial payment from NBN Co. for each customer that moved from its cable network to the NBN,” ACCC Chairman Rod Sims said.

It is also alleged that between October 2015 and September 2016, Optus misled some of its customers about their options for purchasing an NBN plan.

“Optus created the impression that its customers were required to obtain NBN services from Optus, when they could have chosen to switch to any internet service provider. We are also concerned that Optus cut off some of its customers’ internet services when it had no contractual right to do so. Telephone and internet are essential utilities and it is unacceptable for Optus to treat its customers this way,” Mr. Sims said.

“As the NBN rollout continues throughout Australia, people will be making decisions about which provider to go with. ISPs must not mislead consumers when competing for business. We are keeping a close eye on this sector and will take action where we see wrongdoing.”

The ACCC is seeking declarations, injunctions, pecuniary penalties, a publication order, compliance orders and costs. Optus is Australia’s third largest provider of NBN internet services by market share. The NBN is a wholesale-only broadband access network, being built and owned by NBN Co Ltd (NBN Co).

In 2011, Optus and NBN co-entered into an agreement (amended in 2014) by which NBN co-agreed to make payments to Optus in respect of each customer who migrated from Optus’ existing HFC network to the NBN, whether the customer acquired NBN-based services from Optus or from another retail service provider.

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