More than 4.2 million Australian premises will not be able to access top internet speeds by the time the National Broadband Network rollout has been completed, according to NBN chief Bill Morrow.

About 40 per cent of the country will be restricted to internet speeds averaging 68 Megabits per second under the NBN’s fibre-to-the-node (FTTN) technology, rather than the one gigabit-per-second (Gbps) available to premises with a fibre-to-the-premises (FTTP) connection, Mr Morrow told a parliamentary hearing last week.

“FTTN by itself, with the copper loop lengths that we are building with, will not give you gigabit speeds,” Mr Morrow said.

“Then you have to add the eight percent [of the population] on fixed wireless and satellite, so then you’re talking around 40 per cent that won’t be able to get to one Gbps [using current technology].”

Internet Australia executive director Laurie Patton said the remaining 40 per cent of NBN customers have been “relegated to being second class digital citizens”.

Users can choose to upgrade to the faster FTTP technology at their own cost, but prices range from sub-$1000 to tens of thousands of dollars, Mr Morrow said.

One extreme case – an upgrade from a fixed wireless connection – was reported to cost as much as $157,000.

Mr Morrow said about 1.5 million FTTP users have the option for gigabit speeds, however such high speed tiers are not widely offered by retail service providers.

Unattainable internet speeds

Telstra earlier this month reported that 7900 of its NBN customers had been promised unattainable internet speeds and was therefore providing refunds to affected customers.

The Australian reported on Monday that “several hundred thousand” Optus customers were paying for internet speeds unattainable in their area, labelling the telco as the “biggest offender”.

NBN spokeswoman Philippa Perry rejected the claim, telling The New Daily that Optus’ market share of NBN services was “nowhere near hundreds of thousands of homes”.

The ACCC told The New Daily consumers have the legal right to expect that a product or service they received is “fit for purpose” under Australian Consumer Law.

This entitles NBN customers to seek a “repair, replacement or refund” if receiving a substandard service.

However, Australian Communications Consumer Action Network (ACCAN) CEO Teresa Corbin said proving this would involve the lengthy process of customers collecting evidence of speeds they receive on various dates over time to expose the disparity between the promised speed.

Ms Corbin told The New Daily consumers needed “better protection” and urged all service providers to only sell the speeds that can be delivered to customers.

“It was quite a significant step for Telstra to provide customers a refund. Others should take note and seriously consider their customer base and to do the right thing,” she said.

Ms Corbin said there should be a “customer service guarantee” and more incentive for the industry to live up to customer expectations.

“Service providers need to clearly articulate what speed tiers are being delivered and if it’s not delivering, it should be fixed within a certain period of time so consumers aren’t paying for more than what they’re getting.

“The reality is, the NBN needs to be delivering their end as well [on the technology] and customers shouldn’t be the ones suffering.”

The ACCC currently has a “number of investigations” underway in relation to internet speeds being offered by telecommunications providers. It has directed any further complaints to the Telecommunications Industry Ombudsman.

NBN spokeswoman Philippa Perry said the company provides retailers with information on the speeds that can be achieved on the network for marketing purposes.