Another day, another NBN saga.
The Australian Competition and Consumer Commission (ACCC) says Telstra is offering 42,000 customers refunds, free exit from contracts, or new plans after it admitted its promised maximum NBN speeds could not be delivered.
Telstra told the consumer watchdog 9000 of its customers on its "Super Fast Speed Boost" 100/40 Mbps deal - or 100 Mbps download and 40 Mbps upload - and 50/20 deal could not receive those speeds.
The ACCC's investigation found many more customers were affected by limitations on fibre-to-the-node (FTTN) or fibre-to-the-building (FTTB) connections, meaning some weren't even getting the maximum speed offered on a lower-speed deal.
Read more: Australia has slower internet than Kenya
"In essence, people were paying more to get higher speeds that they just weren't able to get," the consumer watchdog's chairman Rod Sims said in a statement on Wednesday.
"All businesses have a responsibility to ensure that claims about the performance of their products or services are accurate.
"This is particularly important in cases where consumers sign long-term contracts to acquire a service."
The problem affected customers across a range of plans offered between September 2015 and November this year.
The consumer watchdog found 26,497 - more than half - of FTTN customers on the 100/40 Mbps deal could not get that speed, and 9606 of those consumers could not even receive the lower tier 50/20 Mbps speeds.
The ACCC also found 45 per cent of costumers on the 50/20 Mbps plan could not receive those speeds.
Telstra has promised to check newly connected customers' speeds, and offered compensation if they are below the advertised rates.
Mr Sims said customers receiving slow speeds was an industry-wide problem, and the ACCC would continue to investigate.
A separate issue the watchdog will examine is where a speed can technically be delivered, but internet service providers have not bought enough capacity from NBN Co to provide advertised services.
It is asking all providers to advertise its expected typical speeds, especially during the peak period between 7pm and 11pm.
"Our message to retailers is that if you advertise a particular speed and customers cannot get that speed, you will risk breaching the Australian Consumer Law."
The news of Telstra's problems comes a little over a week since the ACCC released a draft report showing that, although the NBN can achieve maximum speeds of up to 100 Mbps, just 16 per cent of those on the network are using it at speeds above 50 Mbps.
Last month, the Telecommunications Industry Ombudsman said complaints about services under the NBN rose by 160 per cent.
- The Sydney Morning Herald