It's war: NBN Co responds to TPG's FTTB rollout

NBN Co's new chief executive, Bill Morrow, has warned that buildings that sign up for TPG's new fibre-to-the-basement rollout run the risk of being stuck with a single retail service provider.

"The NBN levels the playing field for Australian telecommunications and creates real and vibrant competition," NBN Co's CEO said in a statement issued today.

"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."

NBN Co is preparing to roll fibre out to high-density inner-city apartment blocks and commercial buildings in response to TPG's FTTB rollout, the company revealed today.

The government-owned company in charge of rolling out the National Broadband Network will release a list of areas where the FTTB rollout will be prioritised "in the coming weeks," an NBN Co statement said.

The initial areas are likely to cover Haymarket in Sydney, New Farm and Fortitude Valley in Brisbane, and South Melbourne. NBN Co said NBN services should be available in the middle of the year in the areas covered by the initial FTTB rollout.

NBN Co revealed in March it was undertaking fibre-to-the-building trials in conjunction with iiNet, M2, Optus and Telstra in eight Melbourne high-rise buildings.

In its half-year results in March, TPG revealed FTTB construction was taking place in Pyrmont, Ultimo and the CBD in Sydney; Southbank, Docklands and the CBD in Melbourne; and Fortitude Valley and the CBD in Brisbane. There are live trial customers using TPG fibre, the telco revealed.

TPG's fibre could reach some 500,000 premises.

TPG's FTTB project appears to run counter to the intention of anti-cherry-picking provisions. Those provisions are intended to prevent telcos undermining the business case for the NBN by building competing infrastructure in low-cost or high-margin areas.

The economics of NBN could be "severely impacted" by infrastructure-based competition NBN Co chairman Ziggy Switkowski warned a Senate committee hearing in March.

"[M]y understanding is that the policy says NBN will be the exclusive wholesale provider of the National Broadband Network," Switkowski told the hearing.

"It is a policy that we are implementing. If there are infrastructure based enterprises who want to test the limits of the policy, they take a risk that NBN will respond in some way, as was the original construct."

In a submission to the government's NBN Panel of Experts — also known as the Vertigan review panel, after its chair Michael Vertigan — TPG argued that infrastructure-based competition quot;delivers the best outcome to end users.quot;

The telco's submission stated that most of the places where 'Extension Fixed Line Competitors' including TPG would extend their networks "will already be covered by competitive infrastructure such as other GPON providers and HFC", 4G and other wireless technologies can deliver "superfast speeds", and NBN Co "has the ability to become an additional competitor if it is deemed necessary".

The shadow communications minister, Jason Clare, recently called on the government to clamp down on cherry picking, citing TPG's FTTB rollout.

In a speech to the CommsDay summit last week, Communications Minister Malcolm Turnbull said that TPG's FTTB roll out represented a "major area of uncertainty at the moment".

"I appreciate there is strong industry interest in the Government's response to TPG's plan," Turnbull said.

"And I should note that had the previous Government allowed NBN Co to deploy VDSL in apartment buildings and office buildings, many if not most of the buildings targeted by TPG would have been serviced already by NBN Co."

Turnbull said he would not "pre-empt the findings of the Vertigan panel on that matter".

TPG has been approached for comment.


Copyright © 2014 IDG Communications, Inc.

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