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Draft decision on what major telcos will contribute to $50m development levy

26 October 2017

The Commerce Commission today released its draft decision on how much 16 telecommunications providers will each pay towards the Government’s $50 million Telecommunications Development Levy (TDL) for 2016/17.

The Government uses the annual levy to pay for telecommunications infrastructure and services which are not commercially viable, including the relay service for the deaf and hearing-impaired, broadband for rural areas, and improvements to the 111 emergency service.

Today’s draft decision determines that Spark, Vodafone, Chorus, and 2degrees Mobile will collectively pay more than 90% of the $50 million levy. 

The levy, about 1% of telecommunications services revenue, is paid by providers earning more than $10 million per year from operating a telecommunications network, including providing internet, mobile and data services to consumers.

The Commission invites submissions on its draft decision via email to telco@comcom.govt.nz by 5pm, 9 November 2017. The Commission expects to release its final decision in December.

The 2016/17 TDL draft decision can be found here.

Background

Telecommunications Development Levy

The Telecommunications Development Levy (TDL) was established by legislation in June 2011 and is set at $50 million a year until 2019. The Commission is required to prepare an annual TDL liability allocation determination in accordance with the Telecommunications Act 2001.

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. 

In September 2017 the Commission released its 2016/17 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’s final calculation has determined that the cost for that period is $2.5 million. This sum is payable by the Government out of the $50 million levy.