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TPG Pushes on with Broadband Ambitions

Posted 07 January 2015

Category: Strata

The battle for broadband is far from over. TPG Telecom is promising to bring back its national broadband network rival despite new red tape crimping the telco’s ability to cash in on inner-city apartments.

On Monday, TPG Telecom froze sales of its new fibre-to-the-basement broadband service after Communications Minister Malcolm Turnbull imposed restrictions aimed at stopping cherry-picking of lucrative metropolitan customers and protecting NBN Co’s monopoly of the wholesale market.

New restrictions include a $27 maximum wholesale charge for 25 Mbps download and 5 Mbps upload to other retailer providers, allowing NBN Co to compete on price in certain areas and the forced split of retail and wholesale arms offering NBN competing services.

Despite this, TPG confirmed on Tuesday it will be back with retail and wholesale offerings.

TPG was given just over two weeks to adapt to the new regulations imposed and develop new wholesale products for competitors. Analysts said it was widely expected, but the deadline of January 1 was tough. A spokesperson for Mr Turnbull said that proper consultation was taken, with 18 submissions, including one from TPG.

There will no doubt be relief from many customers that TPG is pushing ahead, as those already connected, such as Dylan Lindgren, an IT worker who lives in Pyrmont, sing its praises.

Mr Lindgren, who is a tenant and was not involved with TPG coming into his building, received a letter from the internet service provider after the ­technology had already been installed and says within a week he was enjoying remarkably upgraded speeds.

“It’s really when you’re downloading large files, from YouTube or a website, that’s generally the fast part. The latency is still very similar to ADSL, so when you visit a website, you’ve got to download 20 different files, like images and style sheets and each of them is a separate request”.

Derrick Teo, an apartment owner in Sydney’s Eastlakes, said TPG approached his strata board who then liaised with him about joining the roll-out. After doing their own research, the owners voted in favour of letting TPG install its technology and are now waiting for completion.

“It wasn’t just the fact that we were not getting NBN [for a long time], it was that we’re not even getting fibre any more,’’ Mr Teo said. “So, what’s the point in waiting? No matter how they do it, I still think TPG will be cheaper, so there doesn’t seem to be any point in waiting”.

Mr Teo said TPG did not seek exclusivity in the building and the ISP was paying the installation costs.

But, the FTTB roll-out is not without its challenges, with chief executive David Teoh admitting to shareholders it is progressing, but at a slow rate.

“Not everyone agrees with what we want to do, even if it is beneficial to the apartment owners,” he told shareholders at the company’s annual general meeting. “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”.

Tight timelines and a lack of understanding of technology and protocol is leaving some home owners confused and ultimately agitated at TPG’s approaches.

Apartment owner and strata board member Matt, who preferred not to have his full name published, claimed the approach was aggressive and wanted more consultation.

“We’re taking a lock the gate approach,” he said. “When it comes down to it, we may decide that we are happy with TPG coming in supplying services to us. We’re the kind of the block of units that doesn’t want to be walked over. We recognise that we’re responsible for decisions that are in the best interest for the block of units, not the best commercial interests of TPG”.

TPG, through its subsidiary Pipe ­Networks, has been sending letters and in some cases Land Access and Activity Notices to gain access to apartment blocks under the Telecommunications Act.

According to the telecommunications ombudsman, under the Act, telcos must notify body corporates more than 10 business days prior to any work been done. A body corporate, if it disagrees with the proposal, must make an objection, in writing, more than five days before the work starts.

Objections can be raised on the location, inconvenience, date, effect on land and any concerns around how the ISP proposes to reduce inconvenience. The provider then has 20 days to resolve the issues with the body corporate, if they are unable to, the ombudsman will make a decision on the matter.

However, if the provider follows all the criteria set out in the act, the ombudsman may then decide the work can go ahead anyway.

Principal at Bannermans lawyers, David Bannerman, said he has had a lot of approaches from people regarding TPG, and the NBN.

“I don’t think the letters from TPG, or any others, are misleading. In fact, they are well crafted letters by their legal teams,” Mr Bannerman said.

However, Mr Bannerman said the approaches from TPG have confused many people who do not have an understanding of the Telecommunications Act. “Owner’s corporations typically move at glacial speeds and the Telecommunications Act always catches it out”.

There are lots of intermediaries that make it really hard to respond within the timeframe, Mr Bannerman said, letters can go in irregularly checked ­mailboxes or managing agents may think they can leave it until the next strata meeting.

“There doesn’t seem to be that much information available in the marketplace to really be able to give you the low down on the benefits of going with NBN or TPG”.

Jamesons strata general manager Michael Vumbaca said the information provided in letters to a number of his clients was not enough to body corporates to make an educated decision.

“We spent countless hours engaging with solicitors when the letters first started arriving to try and understand how we could protect the interests of our clients, and what choices they had in the matter, if any,” Mr Vumbaca said.

Mr Vumbaca said he has tried to engage Pipe Networks and get as much information about alternatives as possible.

“I’ve never felt comfortable passing this on with any sort of ­recommendation to our clients because they look to us for advice on matters like these, and it was unclear what the implications were with regards to the NBN and any other internet infrastructure if this was installed”.

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Author: Max Mason
Publication: Australian Financial Review
Section: Business
Source: Financial Review
Date: 07/01/2015

Max Mason

Published 07 January 2015