8 Nov 2021

Government tells telecoms to hang up misleading marketing

2:05 pm on 8 November 2021

The telecommunications sector has been told to clean up its marketing and selling tactics as the old copper line phone network and exchanges are dismantled.

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Photo: 123RF

The Commerce Commission has instructed the industry to develop a marketing code to allow consumers to make better decisions about what to buy.

It's given the Telecommunications Forum 60 working days to turn the Commission's guidelines into a binding code.

However, Telecommunications Commissioner Tristan Gilbertson has told the companies he expects a change in behaviour well before that in the run up to Christmas.

"Consumers have told us that marketing of alternatives to legacy copper-based services is often incomplete, confusing or misleading."

"Providers have also contacted us with concerns about their competitors' behaviour," he said.

Gilbertson said the commission's guidelines aimed at ensuring consumers would have plenty of notice that old services were ending so they could make informed decisions about alternative technologies and services, and how they might perform.

The guidelines include an end to telcos using "up to" or theoretical maximum speeds for data transfers and using likely actual peak time speeds.

Alternative technologies to copper include fibre, hybrid fibre-coaxial cable and wireless broadband.

Consumer group Tech Users Association called the new code a step in the right direction.

Association chief executive Craig Young said the code and its quick voluntary implementation was needed to put an end to concerning marketing tactics.

"Copper migration is being used as an excuse to move unsuspecting consumers to preferred services without their express consent, or the information they need to make an informed decision about the alternatives."

"Telcos are notorious for using confusion to avoid competing on price, and the practice has a long history in New Zealand ... it is pleasing to see the commission outlining new requirements around understanding, and clarity of the service performance of alternatives to their current service," Young said.

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