Up to 4000 households will be invited to participate in a national broadband network (NBN) monitoring program from next month, to show consumers what speeds telcos are really providing during peak and off-peak hours.
In a move that favours consumers over companies that argued against the scheme, the federal government on Friday announced $7 million will be provided over four years for the new Broadband Performance and Monitoring and Reporting program (BPMR).
Consumers will, for the first time, be able to see which internet providers deliver advertised speeds.
"Performance information is a key factor for consumers when purchasing plans from a retail service provider," Communications Minister Mitch Fifield said in a statement.
"By collecting and publishing information about the speed and reliability of broadband packages, consumers will be better placed to choose a plan that is right for them. It will also encourage retailers to compete on the quality of their broadband plans."
Chair of the Australian Competition and Consumer Commission, Rod Sims, believes the program will reform the broadband sector and pinpoint if NBN connections are the problem or if telcos are not buying enough capacity.
"The government has recognised there is a lot of 'he said, she said' debates going on out there that [aren't] not doing consumers any good, not doing the telco sector any good and we have just got to get clarity on what is causing these problems," Mr Sims said.
"It is affecting the whole NBN rollout."
He also warned telcos that the watchdog is already investigating claims of slower than advertised speeds and the monitoring results would be used during any enforcement action.
"If we find that people have been misled - that is we find that [a telco was] selling 100 megabits per second but nobody was really able to get that - then we can take them to court for misleading conduct. And we can get remedies for consumers that have been on the receiving end of that conduct," Mr Sims said.
"[But] the biggest effect will come from the fact that the monitoring scheme is underway, rather than court action."
Each participating household will have a small device attached to its home internet connection that will monitor and record the performance of its NBN fixed-line connection. The trial starts in May and results of the five largest telcos will be publicly available during the second half of calendar 2017.
Industry peak body, Communications Alliance, is concerned the results will push customers towards telcos included in the results.
"Smaller ISPs are worried that being out of the limelight of the published results will cost them customers and damage their businesses," CA chief executive John Stanton said.
"The regulator, which exists to promote competition, needs to ensure that it does not engineer the opposite outcome."
Results will specify what kind of fixed NBN connection the volunteers had, whether fibre to the home, curb, node or a cable, and will show if speeds are being slowed down by NBN Co's infrastructure, or a telco is failing to provide enough capacity to deliver the speeds customers pay for.
On NBN connections, consumers can pay more for faster speeds, but only receive those speeds if telcos buy enough capacity.
NBN Co recently released a diagram explaining the factors beyond its control that can impact speeds, such as servers, international connections, and equipment inside consumers' homes.
In May the ACCC will start a tender process to find an independent provider to run the program and recruit consumers for the BPMR.
A spokeswoman for the Australian Communications Consumer Action Network (ACCAN) said the program is great news for consumers and will "help to address one of the biggest areas of disappointment, complaints and finger pointing about the NBN".
"ACCAN would like to thank the government and the ACCC for making this program a reality," she said.
"When performance is not as expected, consumers are given a long list of excuses or other parties are blamed.This program, and the other work that the ACCC is doing in this area, will provide the transparency needed to benefit consumers and improve the broadband market."
The ACCC conducted a pilot program in 2015 with companies SamKnows and Comdate. The pilot program found some telcos were not purchasing enough capacity and speeds dropped dramatically during busy periods.
A public consultation about broadband speeds in 2016 found consumers were overwhelmingly in favour of a public monitoring program. The ACCC is also currently reviewing its guidelines for how broadband speeds are advertised.
A program similar to what the ACCC proposes is currently being rolled out in Canada. A preliminary report found all the Canadian telcos met or exceeded their advertised speeds.