<div dir="ltr"><div>Commsday News Article: TPG may face legal challenge over FTTB rollout (Exclusive)<br></div><div><br></div><div><div>========================<br></div><div><br></div><div><b>TPG may face legal challenge over FTTB rollout</b></div>
<div><br></div><div>TPG may face not only a commercial challenge from NBN Co over its plan for an FTTB rollout to 500,000 apartments but also legal pressure designed to test the carrier’s claimed exemption from ‘anti-cherry picking’ open access obligations under Section 141B of the Telecommunications Act. Communications minister Malcolm Turnbull has raised questions about TPG’s legal status in rolling out FTTB while CommsDay has learned that NBN Co is exploring options to test this in court. The firm declined to comment.</div>
<div><br></div><div>NBN Co said yesterday it would mount a commercial challenge to TPG by bringing forward its own rollout to apartment and office buildings, with service to some locations such as Haymarket in NSW, Fortitude Valley in Queensland and South Melbourne to begin as early as mid-year.</div>
<div><br></div><div>According to a sample TPG contract sighted and reported exclusively by Communications Day earlier this month, TPG has already begun targeting inner city apartment blocks in Sydney, Melbourne and Brisbane with contracts that appear to award it “sole provider rights” for vectored DSL, preventing building managements from signing deals for similar services with other carriers which may “interfere” with its services. Vectoring requires “monopoly” network management, in comparison to the unbundling-friendliness of other DSL services.</div>
<div><br></div><div>NBN Co CEO Bill Morrow reacted yesterday stating ““The NBN levels the playing field for Australian telecommunications and creates real and vibrant competition. We can make this statement because the NBN doesn’t sell directly to consumers and is open to all retail service providers to use on equal terms.”</div>
<div><br></div><div>“Vertically-integrated carriers – companies that both own networks and market to consumers cannot offer those same guarantees. A building that signs up to TPG runs the risk of being left with only one retail service provider – TPG itself.”</div>
<div><br></div><div>“We believe NBN represents the superior solution for building owners and the families and businesses they house. There are 44 retail service providers operating over the NBN, representing more than 90 per cent of the retail broadband market,” he said.</div>
<div><br></div><div>LEGAL PRESSURE? But CommsDay can reveal that TPG may also face pressure on another front: its claimed use of a so-called “loophole” in section 141B in the Telecommunications Act, which allows superfast broadband networks existing before January 2011 to be “extended” one kilometre in length before being captured by NBN-style open access and product set obligations.</div>
<div><br></div><div>CommsDay understands there are varying views in government and NBN Co circles on whether the TPG proposal actually conforms with the legislation, which alternately refers to the implications of “extensions” and “alterations and upgrades” to existing networks.</div>
<div><br></div><div>Communications minister Malcolm Turnbull gave some insight to this internal discussion on an interview with ABC TV late last week when he said “TPG has got to comply with the law and there’s an open question as to whether what they’re proposing to do is consistent with the legislation</div>
<div><br></div><div>"We’re looking at it very carefully and—both as a government—both as the Department of Communications, I should say, and myself as the minister and also the Vertigan panel is looking at it.”<br></div>
<div><br></div><div>“But the scheme of the act—and this was set up when Labor was in power—was designed basically to say this: that you could—anyone could build a high-speed, super-fast network after 2011, but if they did so, they had to—it had to be a wholesale network, it couldn’t be vertically integrated with a retail telco and it had to offer services of the same type as the NBN.”</div>
<div><br></div><div>The legal debate over TPG’s rights focuses on a part of Section 141b which defines affected networks as those where “as a result of the alteration or upgrade, a part of the network became capable of being used to supply a superfast carriage service to residential or small business customers, or prospective residential or small business customers, in Australia”.</div>
<div><br></div><div>CommsDay understands that the product description of TPG’s Pipe Networks arm as at 1 January 2011 was apparently focused more on corporate and dark fibre products than residential or small business customers, thus potentially raising questions as to whether its FTTB service is a legally compliant “extension” or a legally non-compliant “alteration or upgrade.” Conversely, TPG has said since last year that it has legal advice to the effect that its plans fall within the exemption.</div>
<div><br></div><div>CommsDay has also learned that despite TPG CEO David Teoh’s near-invisibility in terms of media or public lobbying profile, he has been vigorously prosecuting his case through discrete channels in the past two months. TPG has previously hinted that it will offer wholesale services on its network and not seek to prevent competitors offering non-vectored DSL services such as FTTH.</div>
<div><br></div><div>Grahame Lynch</div></div><div><br></div><div>========================</div><div><br></div><div>Please signup and subscribe to Commsday @ <a href="http://www.commsday.com/">http://www.commsday.com/</a></div>
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