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Final decision on $50m liability allocation for telecommunications providers

19 December 2016

The Commerce Commission today released its final decision about how much 15 telecommunications providers will pay towards the $50 million Telecommunications Development Levy (TDL) for 2015/16.

The government uses the annual levy to pay for telecommunications infrastructure including the relay service for the deaf and hearing-impaired, broadband for rural areas, and improvements to the 111 emergency service.

The levy — about 1% of telecommunications services revenue — is paid by companies, or groups of companies, earning more than $10 million per year from operating a component of a public telecommunications network (fixed or wireless).

There has been a minor adjustment to the Commission’s draft decision released in October, with Trustpower providing further information on its qualified revenue which has increased its contribution. The remaining 14 providers have seen their allocations marginally reduce as a result, though over 90% of the contributions will still be paid by Spark, Chorus, Vodafone and 2Degrees Mobile.

The Commission has also released its 2015/16 final determination on the cost of the Telecommunications Relay Service (TRS) operated by Sprint International New Zealand for the hearing and speech impaired. The Commission has determined that the cost for that period is $2.6 million – unchanged from the draft decision. This sum is payable by the Crown out of the $50 million TDL.

Read the 2015/16 TDL final decision.

Read the 2015/16 TRS final cost decision.

Background

Telecommunications Development Levy

The Telecommunications Development Levy (TDL) was established by legislation in June 2011. The levy is set at $50 million a year until 2016.

The levy — about 1% of telecommunications services revenue — is paid by companies, or groups of companies, earning more than $10 million per year from operating a component of a public telecommunications network (fixed or wireless).

The TDL replaced the Telecommunications Service Obligations (TSO) liability allocation process and streamlined the process for industry contributions to the TSO, broadband for rural areas, and other government-led improvements to New Zealand's telecommunications infrastructure.

The Commission is required to prepare an annual TDL liability allocation determination in accordance with subpart 2 of Part 3 of the Telecommunications Act 2001.

Telecommunications Relay Service

The Commission is required to prepare a cost calculation determination for the Telecommunications Relay Service (TRS) in accordance with subpart 2A of Part 3 of the Telecommunications Act 2001.

The TRS provider must supply an annual audited report on each financial year from which the Commission can assess the cost of its service and its compliance with its set quality measures related to its delivery of conventional relay services. These services include text-to-voice conversation, voice-to-text conversation, and speech-to-speech relay.