blog If you didn’t laugh, you’d have to cry. Your writer has watched with great amusement over the past week as Megaport chief executive Bevan Slattery has been bitterly complaining about the fact that TPG Telecom has blocked certain types of third-party access to PIPE Networks’ datacentres. You can find Slattery’s problems outlined here on the blog of Megaport, which aims to build an interconnection fabric between various carriers and cloud computing providers. Slattery writes:
“TPG Telecom (owner of PIPE Networks) claims that PIPE’s customers are not “occupiers” of the datacenter and accordingly Megaport cannot use it’s statutory powers under Schedule 3 to the Telecommunications Act 1997 to provide services to them. If accepted, this argument would mean that PIPE’s datacentres could become “competition-free zones”, and TPG can (and evidently will) prevent PIPE’s telehousing customers from ordering services from competitive carriers such as Megaport.”
The irony of Slattery’s complaint here is overwhelming. Those with long memories will recall that it was Slattery, with colleague Steven Baxter, who originally founded PIPE Networks back in 2001. When the pair sold the company to SP Telemedia (TPG) back in November 2009, your writer precisely predicted that this kind of thing would happen. At the time, I wrote for ZDNet:
“Customers like iiNet may claim to be comfortable with the deal today, but down the track, who can tell what impact SP Telemedia’s management will have on Pipe’s wholesale operations? At the very least, I predict that the deal will dilute Pipe’s focus on its wholesale operations, as its network is more tightly bound to SP Telemedia’s and increasingly used to fuel the company’s retail ambitions with its own TPG and Soul ISPs.”
It should not come as a surprise to anyone that TPG does not believe in allowing unfettered access to PIPE Networks’ facilities. The company has not risen to the top of the telecommunications industry by appealing to the common interest; it has gotten there by using its teeth and claws and gripping onto everything it can. Its chief executive David Teoh is a canny player of the corporate game. He probably doesn’t see a huge need to partner with Megaport, and no doubt he would like to keep PIPE Networks’ infrastructure as exclusive to TPG as possible. And who can blame him? This is a strategy which has always worked well for industry giant Telstra.
Slattery too, of course, is a very smart player, having built and sold several major Australian technology companies at this stage. Although the situation is no doubt a bitter pill to swallow — after all, the executive probably personally built the datacentres he is being denied access to — Slattery is probably able to be philosophical about TPG’s behaviour at this stage. At the very least, one can hope that his vast personal fortune and the calming waters of Hawaii will have a soothing effect on the PIPE founder’s soul.