Vodafone appeal possible on FibreX 'guilty of misleading customers' decision

Fibre X promoted at a Vodafone store in the Wellington CBD in October 2017. Photo / Chris Keall

The long-running Vodafone NZ-Commerce Commission dispute over the telco's historic "Fibre X" branding campaign could have further to run.

A court has found Vodafone guilty of misleading consumers with its 2016-2018 FibreX marketing campaign.

But a spokeswoman for the telco would not rule out an appeal, at this point.

"We're currently digesting the verdict and determining next steps," she said.

The Auckland District Court ruled on Friday that Vodafone was guilty of nine charges under section 11 of the Fair Trading Act. These related to a marketing campaign in Wellington, Kapiti and Christchurch between 26 October 2016 and 28 March 2018.

Sentencing will take place later this year.

Judge Pippa Sinclair found Vodafone's branding and advertising was liable to mislead consumers into thinking that the FibreX branded service was delivered over a fibre-to-the-home network (like those services delivered over the Government-subsidised Ultra-Fast Broadband (UFB) networks), when it was not.

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.

"FibreX" referred to the HFC (or hybrid fibre-coaxial - coaxial being copper) network that Vodafone inherited when it bought TelstraClear in 2012. Over the following years, Vodafone spent tens of millions upgrading the HFC network's electronics.

Ironically, a Commerce Commission broadband monitoring report released earlier this month, based on independent testing by UK benchmarker SamKnows during March, found that Vodafone's HFC Max service delivered equal performance to the fastest form of UFB connection, a Fibre Max plan, when it came to the demanding task of streaming multiple 4K Netflix streams, even though HFC Max was a lower-price service.

Vodafone dropped the FibreX brand in June 2019, just a month after new owners Infratil and Brookfield took control, but continued to contest the charges first brought by the ComCom three years ago. The service is now variously billed as UltraFast Hybrid Fibre or UltraFast HFC - with its fastest (1 gigabit per second) variant known as HFC Max.

UFB (Ultrafast Broadband) fibre networks are operated by Chorus (Wellington) and Enable (Christchurch) in the areas where Vodafone also offers its HFC service. Chorus and Enable's UFB service is offered through multiple retail ISPs, including Vodafone.

'Confusing for non-technical customers'

Technology commentator Bill Bennett sided with the regulator, telling the Herald that "Vodafone's HFC network is almost as good as fibre, but not quite. Calling it FibreX confused non-technical customers."

Bennett added, "If Vodafone's marketing department had asked me, I'd have told them to call it: 'I can't believe it's not fibre'."

Apology

In a statement released after the verdict, the telco said, "Vodafone apologises to anyone who may have been confused by the marketing or broadband availability associated with its FibreX network, which would have been seen three to five years ago.

"Notwithstanding the decision, Vodafone is proud to be able to offer ultrafast broadband over its own gigabit network, and HFC remains an important part of the digital services company's network assets.

"The Commerce Commission's reporting from March 2021 shows an HFC cable plan is the cheapest ultra-high user broadband plan in New Zealand.

"The digital services company believes infrastructure competition and maximum customer choice in the important ultrafast broadband market should be welcomed.

"Vodafone will continue to deliver fast and reliable fixed and wireless broadband services to customers throughout Aotearoa, including UltraFast HFC services to customers in Wellington, Kapiti and Christchurch."