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to city customers, this would in turn help
supply costly broadband infrastructure to
rural and regional areas without adding
more expense to the Federal Budget in its
commitment to roll out a nation-wide high-
speed broadband network.
It has also been argued that rolling out a
FTTB city-based network would allow TPG
to have a monopoly of sorts, and as such,
assert price control, which is not in the best
interests of consumers.
TPG Telecom executive chairman David
Teoh told shareholders at the TPG Annual
General Meeting in September 2014 that the
FTTB rollout wasn’t all roses.
“Not everyone agrees with what we
want to do, even if it is beneficial to the
apartment owners,” he said.
“There is a process involved and
initially, it is quite slow and very difficult to
implement. When we go to 20 buildings on
a street, maybe two buildings agree. The
rest take a long time.”
During 2014, The Australian Competition
and Consumer Commission (ACCC)
investigated TPG’s FTTB project and the
legality of the company’s plan to connect
500,000 apartments with FTTB connections
in direct competition with NBN Co.
A Government-appointed panel ran a
concurrent investigation.
In September 2014 the ACCC decided that
TPG’s FTTB rollout was permitted under the
Telecommunications Act, and would take no
action against the company.
ACCC chairman Rod Sims ruled: “Having
carefully examined TPG’s plans, the ACCC
does not propose to take further action
in relation to TPG’s planned FTTB network
rollout to supply residential customers in
high-rise buildings in Brisbane, Sydney,
Melbourne, Adelaide and Perth.
“The ACCC has reached this decision
based on information and evidence that
TPG’s networks were capable of supplying
superfast carriage services to small business
or residential customers at 1 January 2011,
and confirmation that TPG is not extending
the footprint of these networks by more
than 1km.
“The ACCC will now conduct a declaration
inquiry into whether a superfast broadband
access service like the type to be provided
by TPG over its FTTB networks should be
the subject of access regulation.
“Among other matters, the inquiry will
consider whether regulation is necessary to
ensure that consumers in TPG connected
buildings can benefit from competitive retail
markets for high speed broadband services.”
In December 2014, Federal Minister for
Communications, Malcom Turnbull MP
pushed ahead with new rules he says
are designed to do just that – protect
customers of new superfast broadband
networks. The rules involve a new carrier
licence condition declaration for owners of
superfast fixed line broadband networks
targeting residential customers.
The
Carrier Licence Conditions (Networks
supplying Superfast Carriage Services to
Residential Customers) Declaration 2014
requires affected carriers to offer wholesale
services on a non-discriminatory basis and
to functionally separate their wholesale and
retail businesses.
The rules are essentially designed to
force fairer industry competition by forcing
all FTTB carriers to offer wholesale access
to their networks, essentially allowing
rival broadband companies to access the
networks to prevent any one company
building a monopoly.
The Federal Government claims to have
made provisions to assist industry transition
to the new arrangements: from 1 January
2015 carriers who operate such access lines
will only need to offer wholesale services on
a non-discriminatory basis.
From 1 July 2015, affected carriers need to
have separate wholesale and retail companies
with separate directors, management, staff
and operational support systems.
TPG has since stopped offering its
FTTB service to new customers, though it
continues to supply existing customers.
A TPG website announcement related
to its FTTB offering now states: “On 14
December 2014, we were advised of a
regulation that precludes us from selling our
FTTB products after 1 January 2015 unless
we have taken certain steps. There has been
insufficient time to complete those steps
before 1 January so until we complete the
required changes we are required to remove
our FTTB products from sale.”
Mr Turnbull has publicly stated that
despite the seemingly short deadline, the
new rules followed extensive industry
consultation, and that the industry players
were well aware. Despite TPG’s objections,
The Federal Government also says the
legislation has been mostly well-received by
others in the industry.
“The rules are designed to support fairer
and more effective retail competition by
ensuring competing service providers can
access new residential broadband networks
and provide alternative offerings,” he says.
“Competition will give residential
consumers choice about who they want
as their internet retailer and creates the
conditions for reduced prices, better service
standards and greater innovation in the
services being offered.
“Without providing competing providers
with infrastructure access, consumers face
the real possibility of a single retail provider
and potentially higher prices.
“The new rules also mean that carriers
like NBN Co., Telstra and others who either
operate, or will operate, as either wholesale-
only or retail-only providers in the residential
market are not disadvantaged by having to
compete with vertically integrated firms that
can favour their own downstreamoperations.”
TPG has vowed that it will soon again
offer its FTTB service. The company is
said to be in talks with rival broadband
company iiNet to allow wholesale access
to its network, which would seemingly
go some way towards meeting the new
requirements.
Watch this space.