The Telecommunications Development Levy (TDL) was established by legislation in June 2011. The levy is set at $50 million a year until 2019, which we are required to allocate proportionately to qualifying telecommunications providers.
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 TDL replaced the Telecommunications Service Obligations (TSO) liability allocation process and consolidated industry contributions to the TSO, broadband for rural areas, and other government-led improvements to New Zealand's telecommunications infrastructure into a single levy.
A 'liable person’ is defined as a person (or company) who provides a telecommunications service in New Zealand by means of operating a component of a public telecommunications network. These services may be the transmission of voice, data or any other content over mobile or fixed line public networks.
Only those parties that earn more than $10 million in telecommunications revenue in the preceding financial year must contribute to the levy and are subsequently known as a ‘qualifying liable person’. The Commission releases the list of qualifying liable persons at the end of June each year.
‘Qualified revenue’ is defined as being revenue a liable person receives for supplying telecommunications services that rely primarily on their own or any other public telecommunications network. For most companies subject to the TDL, qualified revenue is essentially their annual operating revenue.
Once listed as a qualifying liable person, these companies are required to provide the Commission with specific information relating to their finances and shareholdings within 60 days. Once we have analysed this information we determine the exact amount each must pay toward the $50 million levy. The amount each pays is proportionate to their earnings, meaning Spark, Vodafone and Chorus are the chief contributors.