Telcos told to stop dodgy marketing

The Commerce Commission has sent an open letter to the industry, following complaints consumers are being given poor information about making the switch from old copper phone lines to other technologies, such as fibre and wireless broadband.

Some of the telco advertising we’ve seen fails to explain what’s happening with the copper network and when, and risks misleading consumers about their options. Some consumers have been told they should switch to wireless, regardless of whether that’s the best option for them.

From 1 September, Chorus will be able to withdraw copper but only from areas that have fibre installed. Ahead of that date, Spark has started withdrawing its public switched telephone network (PSTN), which connects calls made over copper lines.

However, telecommunications commissioner Tristan Gilbertson said it had examples where people have been told they need to switch now, even though withdrawal of copper services wasn’t yet scheduled in the area.

Telcos’ marketing materials were also “making claims about the performance of alternative technologies that don’t reflect real-world performance,” he said.

To bring the industry to heel, the commission is planning to issue marketing principles under the Telecommunications Act. Telcos will be expected to comply with these principles.

Gilbertson said the move is intended to give consumers certainty they will:

• receive sufficient notice copper is being withdrawn (no less than four months) and won’t be hurried into a decision about replacement technology.

• be aware of options available to them and independent information sources (such as broadbandmap.nz, which shows services available at a consumer’s address).

• be given information about the performance of different technology options, including likely peak-time performance.

Consumers are also expected to be given clear information about the costs of moving to a new service and their right to keep their landline number if they change telco.

Gilbertson said those still on copper-based services were more likely to be vulnerable, elderly or less technologically aware.

“Such consumers are also potentially unaware of the options available to them, or their rights, and are therefore less able to choose an appropriate service when services are being withdrawn. This makes the accuracy and completeness of the marketing of alternative technologies even more important,” he said.

What’s happening next

The commission is calling for submissions on the proposed principles. We’ll be making a submission backing moves to clean up the industry’s marketing and make sure consumers get the information they need.

Submissions close 27 August 2021. More information can be found here.