Vodafone New Zealand has been found guilty of misleading consumers over the branding of its FibreX HFC-based broadband service.
Auckland District Court ruled last Friday that Vodafone NZ was guilty on nine charges of violating the Fair Trading Act between October 2016 and March 2018.
The New Zealand Commerce Commission (ComCom), which brought the case last year, argued fibre was a generic description of fibre to the home, especially in relation to the country’s government-subsidised Ultra-Fast Broadband network, and consumers where likely to think the same in Wellington, Kapiti, and Christchurch where Vodafone was promoting its FibreX service.
“Judge Sinclair agreed that fixed line broadband networks are identified in telecommunications markets by the technology used for the last mile to the home/premise, and that in the case of the UFB networks, that is fibre optic cable,” the ComCom said on Wednesday.
“She rejected Vodafone’s argument that consumers would understand that FibreX was a ‘fibre like’ network delivering superfast reliable broadband but not pure fibre, due to the ‘X’ in its name.”
It was argued that the X was derived from “coaXial”.
The HFC network Vodafone was promoting, was gained as part of its 2012 purchase of TelstraClear. During 2015-16, the network was updated to DOCSIS 3.1, after which it took on its FibreX branding. The network passed 250,000 households.
Lead counsel for Vodafone, Antonia Horton, said during the trial that a background stock image containing beams of light that was used, was “night sky filled with shooting stars”. Expert witness for ComCom, Professor Phillip Gendall from the Department of Marketing at the University of Otago, said the suffix “X” put forward that the service was a superior form of fibre, and the stock image was “reminiscent of fibre optic cable”.
Gendall pointed to UFB retailers offering plans with names such as Fibre 100 for why consumers would assume the service had an “X factor”.
Sinclair added in the judgement that the HFC network has a number of limitations not found in a full fibre network — such as variability, congestion, speed, reliability, latency, upgrade pathways — and that consumers would wish to know about them.
Sentencing is due later in the year.