TPG goes wholesale for fibre-to-the-basement NBN competitor

TPG has met the new requirements for its fibre-to-the-basement product set out by Australian Communications Minister Malcolm Turnbull, and has put the retail product back on sale.

TPG's fibre-to-the-basement (FttB) National Broadband Network (NBN) rival product is back on sale, over a month after the company was forced to pull it due to new government regulation forcing the company to offer a competitive wholesale product.

After acquiring a large number of fibre backbone networks from its AAPT purchase, in September last year TPG began connecting some of the 500,000 apartments that it plans to roll out its fibre-to-the-basement services to in Australian capital cities.

The move, using a loophole in NBN legislation, was not opposed by the Australian Competition and Consumer Commission. Such networks have the potential to undermine the cross-subsidised business model for the NBN, where the "capped" price for services in the bush is subsidised by higher usage from places with higher uptake and those areas where the cost to roll out the network is significantly lower.

As a result, Australian Communications Minister Malcolm Turnbull said that he would move to create a carrier licence condition (CLC) that companies operating such networks must have separate wholesale and retail arms, and offer wholesale products on the same terms and prices as offered to its retail arm.

In December, the minister then said that companies must have the wholesale products on sale from January 1, 2015, but would have until July 1, 2015, to functionally separate the wholesale and retail arms. The delay was designed to give infrastructure owners time to transition to the new rules.

TPG pulled the product from sale in late 2014, however, stating that it didn't have time to get a wholesale product ready.

"On December 14, 2014, we were advised of a regulation that precludes us from selling our FttB products after January 1, 2015, unless we have taken certain steps. There has been insufficient time to complete those steps before January 1, so until we complete the required changes, we are required to remove our FttB products from sale," the company stated on its website.

The government argued that TPG had been given enough time through a discussion process.

The retail product is now back on sale, according to TPG's website. A spokesperson for TPG confirmed to ZDNet that the company is now also offering a wholesale product.

iiNet has previously indicated that it would be interested in connecting customers over TPG's FttB network.

In its submission during the consultation process, TPG said that it was developing an AU$40 wholesale product offering 100Mbps product with backhaul at no extra cost, which would have been a better offer than the mandated AU$27 for 25Mbps offering required under the regulation.

TPG said at the time that it halted its initial product development in order to meet the new requirements.

"Once the draft CLC was issued, we were forced to put the implementation of that development work on hold. It would be impossible for us to offer the product at the price point if the CLC is implemented, since the costs associated with compliance with the CLC are huge," TPG general counsel Tony Moffatt said.

The Australian Competition and Consumer Commission on Thursday also issued a draft determination, where the company set out that it plans to accept NBN Co's proposed revenue plans to pay off the cost of building and operating the network.