Telecom New Zealand has paid out fines and compensation of almost NZ$9 million ($6.45m) for misleading ads that promised “maximum speed internet”.
The company was fined NZ$500,000 in the Auckland District Court today after pleading guilty to 17 charges of breaching the Fair Trading Act with its Go Large broadband plan in 2006.
While it had promised “unlimited data usage and all the internet you can handle, the NZ Commerce Commission (NZCC) found that the bandwidth was constrained “in some cases to dial-up speed.”
The commission said some customers had found that they experienced slower speeds on their new plan than on their previous Telecom NZ service.
In the fine print of Telecom’s promotion, a disclaimer said the service would go “as fast as a users line will allow and warned of the possibility of a traffic management policy for peak periods and on those using peer-to-peer applications for large file transfer.
Telecom NZ has already paid around NZ$8.4 million in compensation to 97,000 affected customers and will pay another NZ$44,000 in reparation over the plan, which it stopped offering in February 2007.