TPG's fibre plans are Turnbull's first NBN test

TPG's announcement of offering fibre-to-the-building broadband services will be the first test of new Communications Minister Malcolm Turnbull.
Written by Josh Taylor, Contributor

TPG's planned launch of fibre-to-the-building retail broadband services to around 500,000 apartments and units across metropolitan cities in Australia will be the first major test of new Communications Minister Malcolm Turnbull and his approach to broadband in Australia.

In theory, under the current legislation, TPG could be prevented from offering the retail product, and it wouldn't be allowed to build the fibre network out unless it only offers a layer 2 wholesale product at the same price as NBN Co's current wholesale product.

The legislation was designed so that big retailers would not go out and build new fibre networks in the high-density areas like, say, all the places that TPG is currently planning to build its network — Sydney, Brisbane, Melbourne, Adelaide, and Perth — and then go and charge less than NBN Co's price, which is designed to keep the price the same in regional and metropolitan Australia.

But what a difference a change of government can make. The Coalition government, due to be sworn in tomorrow, is likely to take a vastly different approach to the anti-cherry-picking laws that the last government put in place.

When Turnbull trumpeted the success of Openetworks in upgrading apartments in Erskineville, Sydney, to VDSL in a matter of weeks, he said he would encourage more companies to consider rolling out their own network upgrades, provided that they offer a wholesale service, too.

TPG's planned upgrade is simple in that the company owns a lot of fibre across metropolitan areas in Australia already, and offers fibre products to businesses in around 1,600 buildings. The sudden push into retail fibre broadband products just over a week after a change of government smells like a telco testing the new government on the competition law.

When the products do launch, after trials late this year, they could be in flagrant breach of the current competition law. It's possible that the new government may seek to repeal the existing laws, but that's unlikely to happen until July 2014, when the new Senate sits, and the Coalition will have better luck getting laws through the Senate by winning over some of the votes of the right-wing minor parties such as the Liberal Democrats, rather than hoping that Labor and the Greens will agree to repealing the legislation before then.

But until then, Turnbull has a decision to make. Does he ignore TPG's wilful breach of the law, or does he make a ministerial exception as Conroy did for Telstra and TransACT?

The difference with those two cases is that a wholesale product is offered. It's a bit hard for the new communications minister to claim to be all about competition while allowing TPG to have the monopoly on its fibre service into these buildings, if it decides not to offer a wholesale product.

TPG has told ZDNet that it is aiming to skirt around the laws by only expanding the offering within 1km of where the current network footprint reaches, which is allowed under the legislation, but the legislation also specifically prohibits the "upgrade" of networks to over 25Mbps after November 2010.

This means that TPG's plans could be open to interpretation, and a TPG spokesperson confirmed that the company would look at a number of ways of getting around the law if the 1km rule did not work.

"There are a range of approaches we can take to supply it under the current law. For example, we can use the 1km extension exemption or we can also supply it with wholesale open access. We may also choose to supply a 25 mbps product. All options are under consideration but we do not believe that regulatory approval is required," the spokesperson said.

Turnbull's office had not responded to a request for comment at the time of writing.

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