TPG considers speed limit for fibre expansion

TPG may be forced to limit the download speed of a planned fibre expansion into new residential unit blocks to under 25 Mbps to avoid falling foul of strict anti-cherry picking laws.

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Hours after announcing its plan to bring services of up to 100 Mbps to approximately 500,000 residential units in five capital cities, the ISP told iTnews it is weighing its options to be able to go ahead with the rollout within the current legislative framework.

"There are a range of approaches we can take to supply it under the current law," a TPG spokesperson said.

"We do not believe that regulatory approval is required".

TPG's comments indicate the company is not planning on seeking any formal Ministerial exemption from the anti-cherry picking laws enacted in 2011 to protect the National Broadband Network rollout.

The rules affect any company that tries to build or upgrade a fibre-to-the-premises (FTTP), fibre-to-the-node (FTTN) or hybrid fibre-coaxial (HFC) network for residential internet users.

The laws were designed to ensure that private operators could not pick off low-cost, high-density areas to build or upgrade high-speed fixed networks before the NBN could arrive.

Allowing cherry-picking could undermine the uniform pricing model used for the NBN — where city users pay extra for connections to subsidise costs in regional and remote areas, the previous federal government argued.

Aside from seeking a formal Ministerial exemption from the rules, network builders targeting the residential market can fall back on certain exemptions enshrined in the laws.

Specifically, cherry-picking is allowed if network builders provide open, non-discriminatory wholesale access to the network asset for any access seekers to also offer retail services.

They can also make extensions to networks that existed before January 2011 as long as the extension covers less than 1km.

In addition, anti-cherry picking rules only kick in if the speeds to be offered exceed 24 Mbps — the maximum theoretical speed for existing ADSL services.

For TPG, all of these options are currently on the table.

"We can use the 1KM extension exemption or we can also supply it with wholesale open access," TPG's spokesperson told iTnews.

"We may also choose to supply a 25 Mbps product. All options are under consideration."

TPG's test of the anti-cherry picking exemptions is likely to add fuel to the new Coalition Government's plans to further repeal parts of those laws to encourage competitive infrastructure investments.

Legislative change on that front is likely in 2014, according to a report in The Australian last week.