Internet service provider TPG has put forward its case for the Government to allow it to continue exploiting a legal loophole to build fibre to the basements of 500,000 apartments in a competing network to the NBN.
In a submission to a review panel tasked with conducting a cost-benefit analysis of the NBN and a review of its regulatory framework, TPG argued in favour of the Government retaining existing loopholes which would allow TPG's FTTB NBN rival to operate.
In September last year TPG announced plans to expand the number of buildings connected to its fibre network by 500,000, targeting apartments across metropolitan Sydney, Melbourne, Adelaide, Brisbane and Perth.
The rollout would run in direct competition to the Coalition’s plans to run fibre to basements of apartment buildings in urban areas.
TPG's plan exploits a loophole in anti-cherry picking legislation introduced by the former Labor Government, laws which were designed to protect the NBN from private operators looking to build or upgrade fibre-to-the-premises (FTTP), fibre-to-the-node (FTTN) or hybrid fibre-coaxial (HFC) networks in low-cost, high-density areas.
TPG is able to fall back on exemptions to the legislation by either limiting extensions to existing networks (built before January 2011) to less than 1km, limiting speeds offered on the service to under 24 Mbps, or allowing wholesale access to others to offer retail services on the network.
NBN Co Ziggy Switkowski last week said TPG’s plans could potentially “severely impact” the NBN.
He said NBN Co would be forced to respond to such a move, and would look at the potential of running fibre all the way up to individual apartment blocks.
TPG argued in a recent submission to the review panel its FTTB efforts would not threaten the national broadband network.
"TPG anticipates reaching a potential 500,000 premises. Many of those premises will be entrenched HFC customers, due to their requirement for Foxtel Television,” it said in its submission.
"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 NBN Co.”
It said infrastructure-based competition would deliver the best outcome to end-users - an argument supported by rival ISP iiNet and the Australian competition watchdog.
The Australian Competition and Consumer Commission agreed with TPG’s assertion that multiple networks in a single area would likely drive down prices for end-users.
Similarly, iiNet - which is watching the Government’s attitude to TPG’s FTTB plans before embarking on its own - said multiple networks should be built as long as access and pricing mimicked the NBN’s business model.
iiNet did however express concern over the 1km network extension exemption in the anti-cherry picking legislation.
It said most CBD and metropolitan areas would have had dark fibre laid prior to the cut-off of January 2011, giving the fibre owners an advantage in the roll out of competing networks to the NBN, and argued for the exemption to be reconsidered.
"The owners of this dark fibre will be able to set up large competing FTTB networks that are not subject to the level playing field requirements and which can be operated by a vertically integrated provider," it said.
"This causes a significant risk to the viability of the NBN and the viability of retail based competition using the NBN."