[AusNOG] Commsday News Article: TPG may face legal challenge over FTTB rollout

[Skeeve Stevens]

Commsday News Article: TPG may face legal challenge over FTTB rollout
(Exclusive)

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*TPG may face legal challenge over FTTB rollout*

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.

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.

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.

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.”

“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.”

“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.

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.

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.

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

"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.”

“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.”

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”.

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.

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.

Grahame Lynch

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...Skeeve

*Skeeve Stevens - *eintellego Networks Pty Ltd
skeeve at eintellegonetworks.com ; www.eintellegonetworks.com

Phone: 1300 239 038; Cell +61 (0)414 753 383 ; skype://skeeve

facebook.com/eintellegonetworks ;  <http://twitter.com/networkceoau>
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