The Commerce Commission today released its draft determination for the amount 22 telecommunications providers will pay towards the $50 million Telecommunications Development Levy (TDL) for 2012/13.

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.

Telecommunications Commissioner Dr Stephen Gale said the levy — about 1% of 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 Commission’s draft liability allocation determination (LAD) sets out what proportion of the $50 million levy each of these ‘qualifying liable persons’ should pay in proportion to their qualified revenue. Based on the draft determination, approximately 90% of the contributions will be paid by Telecom, Chorus and Vodafone.

In preparing this draft determination, the Commission used an approach consistent with that used for the 2011/12 TDL. Dr Gale noted that this consistency should reduce compliance costs and increase certainty for telecommunications providers.

The Commission invites submissions on this draft determination. Submissions should be sent to telco@comcom.govt.nz by 5pm, 19 November 2013. The Commission anticipates releasing its final determination for the 2012/13 TDL by late December 2013.

Background

The Telecommunications Development Levy was established by legislation in June 2011. The levy is set at $50 million a year until 2016, at which time it will be reduced to $10 million.

The TDL replaces the Telecommunications Service Obligations (TSO) liability allocation process and streamlines 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.