FTTB: TPG puts case for competing with NBN infrastructure

Internet service provider TPG has put the case for allowing it to build infrastructure that would compete with NBN Co in a submission (PDF) to the NBN Panel of Experts — also known as the Vertigan review panel, after its chair Michael Vertigan.

The panel was established by the government in December last year to conduct a cost-benefit analysis of National Broadband Network rollout and a review of the NBN regulatory framework. In February the panel issued a call for submissions from the public relating to a framing paper it issued.

TPG has previously indicated it intended to offer fibre-to-the-basement (FTTB) connections; a project that appears to run counter to anti-cherry-picking provisions in current NBN legislation that are intended to prevent telcos undermining the business case for the network by building competing infrastructure in low-cost or high-margin areas.

"Infrastructure based competition delivers the best outcome to end users," TPG argues in its submission.

"The NBN was not intended to be a fixed line monopoly and it should not be a fixed line monopoly. Carriers (other than Telstra) who had invested many hundreds of millions of dollars building 'superfast' networks prior to 2011 were, and should remain, permitted to make use of those networks to compete with the NBN and other broadband providers. The Government expressly wrote that right into law (Parts 7 and 8 of the Telecommunications Act)."

The telco states 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".

In the case of bottlenecks, the Competition and Consumer Act could provide a mechanism to "consider and, if necessary, permit" competitors to access the network facilities of an 'Extension Fixed Line Competitor'.

The economics of NBN Co are not "threatened significantly" by companies, such as TPG, that want to build competing last mile infrastructure, the submission states: "In the case of the TPG FTTB build, TPG anticipates reaching a potential 500,000 premises. Many of those premises will be entrenched HFC customers, due to their requirement for Foxtel Television.

"Of the remaining addressable market, TPG might reasonably only expect to be successful in securing a percentage of the customers. The number of households who will obtain TPG FTTB will be insignificant compared to the number of households to be targeted by NBNCo."

The business case of the NBN wholesaler is instead threatened by Telstra, which has massive backhaul infrastructure and "has not been required yet to divest itself of its interest in Foxtel or the HFC".

However, NBN Co's chairperson, Ziggy Switkowski, argued earlier this month that cherry picking by TPG and other telco could quot;severelyquot; affect the business case of the NBN.


Copyright © 2014 IDG Communications, Inc.

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