Media Releases

Commission releases draft decision on liability allocation for telecommunications providers

22 October 2015

The Commerce Commission today released its draft decision about how much 18 telecommunications providers will pay towards the $50 million Telecommunications Development Levy (TDL) for 2014/15.

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).

The draft decision sets out how much of the $50 million levy each of these ‘qualifying liable persons’ should pay in proportion to their qualified revenue. Based on the draft decision, almost 90% of the contributions will be paid by Spark, Chorus and Vodafone.

The Commission has also released its 2014/15 draft determination on the cost of the Telecommunications Relay Service (TRS) operated by Sprint International New Zealand for the hearing and speech impaired. The Commission’s draft calculation has determined that the cost for that period is $2.6 million. This sum is payable by the Crown out of the $50 million levy.

The Commission invites submissions on both draft decisions. Submissions should be sent to telco@comcom.govt.nz by 5pm, 6 November for the TRS decision and by 5pm, 12 November 2015 for the TDL decision. The Commission anticipates releasing its final decisions in December.

See the 2014/15 levy and draft decision.

See the 2014/15 TRS draft 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 produce a cost calculation determination for the Telecommunications Relay Service (TRS) under Part 3 of the Telecommunications Act.

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.