New rules imposed by the Communications Minister Malcolm Turnbull have forced TPG to withdraw its superfast fibre-to-the-basement service, which competes with the National Broadband Network.
As reported by The Sydney Morning Herald today, TPG posted on its website that it was advised of the new regulations on December 14 that precludes them from selling the service after January 1st of this year unless they taking certain steps – namely offer wholesale access to their fibre networks.
“There has been insufficient time to complete those steps before 1 January so until we complete the required changes we are required to remove our FTTB products from sale,” TPG said in a notice posted this week.
The regulations, according to the Communications Minister, are designed to protect consumers. They would force companies offering residential fibre services (like TPG) separate their retail and wholesale arms into two companies – each having their own directors, management, staff and support systems. To ease the transition, they must have the wholesale products on the market from January 1, and functionally separate by July 1.
TPG’s FTTB service has been controversial, as it was able to exploit a legal loophole to expand the network to more apartments and create a competing network to the NBN. The loophole – introduced by the former Labor government to protect the NBN – allowed existing networks built before 2011 to extend their reach if it was less than 1km, limit network speeds to under 24Mbps, or offer wholesale access to the network to other ISPs.
NBN Co has been very critical of TPG’s exploitation of the loophole, saying that it could have a severe impact to the network and damage its business case.