TPG's access stoush could harm NBN alternative plans

TPG's access stoush could harm NBN alternative plans

Summary: Megaport founder Bevan Slattery has claimed that TPG is denying its competitors access to Pipe Networks' datacentres in a move that could have ramifications for TPG's fibre-to-the-basement plans.

TOPICS: Telcos, TPG, Australia

Pipe Networks co-founder and now CEO of Asia-Pacific network interconnection company Megaport, Bevan Slattery has taken the new owners of his former company to task over claims that TPG is denying its competitors access to Pipe's datacentres.

TPG took over dark fibre provider Pipe Networks in 2010, when shareholders approved the AU$373 million takeover bid. Shortly afterwards, Slattery resigned from his role as CEO of the company, and subsequently went on to found Megaport.

In a blog post yesterday, Slattery told the company's customers that it had suspended taking new orders into Pipe's datacentres in Brisbane and Fortitude Valley in Queensland because TPG had been claiming that Pipe's customers, such as Megaport, were not occupiers of the datacentre, and therefore could not use Schedule 3 of the Telecommunications Act to access the datacentres.

"If accepted, this argument would mean that Pipe's datacentres could become 'competition-free zones', and TPG can (and evidently will) prevent Pipe's telehousing customers from ordering services from competitive carriers such as Megaport," he said.

Megaport had asked the Australian Communications and Media Authority (ACMA) to provide information on Pipe's underground duct facilities as required by Schedule 1 of the Telecommunications Act. Slattery said that TPG's actions could impact TPG's own access to other datacentres. He said that TPG had referred the matter to the Telecommunications Industry Ombudsman (TIO) to make a determination.

Slattery noted that TPG will likely be relying on Schedule 3 of the Telecommunications Act to install its equipment in the basements of buildings across the metropolitan areas of Sydney, Melbourne, Brisbane, Adelaide, and Perth, where the company is planning to hook up fibre-to-the-building services for 500,000 units.

"Regardless, we view TPG/Pipe's objection as without merit, and preventing Pipe's customers from acquiring telecommunications services from a competitor of Pipe," Slattery said.

The move to block access to Pipe's facilities comes in stark contrast to Pipe's own actions around using Schedule 3 to access buildings to install its own infrastructure. The company has previously taken issue with building owners denying access to telecommunications providers and seeking to push them into a licence agreement whereby the telcos often end up paying high rents for the privilege.

Pipe last year won a landmark access case against Commonwealth Superannuation Corporation to install a cable in the company's Collins Street, Melbourne, building for its tenant, Macquarie Bank.

Slattery said TPG's actions should be even more concerning, given its recent AU$450 million acquisition of AAPT and its fibre network infrastructure. The ramifications could be felt much wider and by many more in the industry if TPG applies the same behaviour to AAPT as it has to Pipe, he said.

"AAPT and Pipe are the leading providers of infrastructure-based competitive wholesale services in the Australian market," he said.

ZDNet approached TPG for comment yesterday, but has not received a response.

A spokesperson for the ACMA told ZDNet that it had yet to receive a complaint, but Slattery clarified that it was being delivered via mail.

Topics: Telcos, TPG, Australia


Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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  • Shock Horror

    A private company seeking to maximise profits by any means, I thought that was their legal obligation.
    Regulation , from a government that is seeking to cut red tape and regulations.
    Besides regulation enforcing competition and wholesale pricing ensures minimal service and limited if any upgrades for decades to come
    Abel Adamski
  • crooks fighting with crooks

    i have no empathy for these crooks. Rich people fighting with other rich people about how much money they need to pay.

    The thing with the wholesale deals with co-lo, rack space, interconnects and such is the cost. I'm sure that at the right price TPG would be happy to provide the product.

    However what that price is never discussed because it would expose the scam that is the Australian telecommunication industry. The price for a gibabit interconnect is utterly ridiculous especially when a usage also charged (at per MB still!).

    and yet when a big service is present in the datacentre (i.e. akamai) the pricing given to those players is extremely nice (like $1k a month). The way that these Carriers flip their stories around, claiming massive costs on one hand and then giving it away on the other shows that its all a game and the true cost is extremely minor part of the criteria used to price these products.

    Like seriously the vast bulk of the internet people use i.e. facebook, MS, Sony, Apple/itunes, is piped to a ISP for a couple of grand a month. That ISP then leverages that into excess usage and all sorts of usage based charging that turns something like $0.00000c per MB into $0.20 per MB or more. In any other industry this would be enough to throw people into prison. Yet telcos are allowed to get away with as the ACCC is obsuficated with disputes about ULL pricing.

    Take backhaul bandwidth - how come there never any articles about the true cost of backhaul, about how oversubscribed consumer services are (your $69 monthly recurring barely covers 1 mbps of bandwidth let alone all of the other inflated costs).

    The truth of the matter is supply of bandwidth is artificially constrained in order to maximise profit, and not on a minor scale.

    There is current enough lit up fibre (especially with Telstra) to supply unlimited domestic usage at a much better contention ratio then is currently provided (like TPG is 50:1 or more apparently). If we took it a step further and all of the darkfibre was lit up then basically every household/mobile phone user could have 1:1 bandwidth, as much as their layer 1 service could supply them.

    However this would basically destroy the wholesale price of this bandwidth.

    So how does the industry ensure their pricing is at a level that sustains their excessive salaries and bonuses well instead of a normal cartel that meets in smokey back rooms and sets colludes on pricing they basically trade pricing managers who are privy of their former employers pricing and thus they can ensure that bandwidth/internet pricing and other services are priced all within ~ 10-20% of each other. This way the industry remains extremely profitable. The cheap SP do it by oversubscribing their services (like TPG).

    Of course you don't see this in the their net profits because the way the industry hides obscene amounts of money they make is by the outrageous salaries, bonuses and other things they package into their contracts. Just walk around the parking lot of a major telco and do the same at an investment bank. The number of exotic sports cars at the telco out number the bankers 2:1.

    Telcos are run by crooks are actively ripping Australian's off at a scale that would stagger your imagination. The Media and ACCC are more then happy to play it safe with their institutional relationship, and personal career paths especially considering how many people flip between the two.

    So this story/whinge by Beaven about not getting access to TPG centres, and is fearing the same with AAPT, is all about money.

    Not about fair access.
  • +1. spot on !

    Owning/running a Telco is a license to print money.

    The TIO, ACMA & the ACCC are all puppets in their pockets !

    Get real guys !
  • Schedule 3 does not provide for power

    Nothing in Schedule 3 appears to allow for a power supply to be made available.
    This means that TPG or any other users would have to provide their own power for active equipment, which may be more difficult.
    So it would be surprising if TPG were able to use Schedule 3 without co-operation of power providers. Equally, it is not certain that TPG active DSLAMs are classed as low-impact at this time.
    In particular, a clause in the Low impact facility schedule requires that low impact In-Building equipment must be part of a wholesale network for non-discriminatory access.

    Building owners could possibly challenge on the basis of fire risk and indemnity.

    It makes sense for the rule to allow access for passive equipment such as joints and cables, so as not to prevent reasonable access for telecommunications providers.