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Commission Seeks Feedback On Draft Telecommunications Development Levy Allocation

The Commerce Commission has today released its draft decision on the allocation of payments for the Government’s $10 million Telecommunications Development Levy (TDL) for 2020/21 among providers of telecommunications services.

The TDL is paid by companies earning more than $10 million per year from telecommunications services, including internet, mobile, and data services.

The Government uses the levy to pay for telecommunications infrastructure and services that 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.

The draft determination proposes that Spark, Vodafone, Chorus, and 2degrees collectively pay approximately 88% of the $10.145 million levy for the year from 1 July 2020 to 30 June 2021. The remainder of the levy is divided among other liable providers. The amount each provider pays is proportionate to their telecommunications revenue.

The draft determination comes after the Commission sought clarification from the High Court on whether businesses involved in the transmission of broadcasting signals are liable to contribute to the levy following amendments to the Telecommunications Act in 2018, which removed an exemption for “broadcasting” from the definition of “telecommunication”.

In a judgment issued last month, the High Court confirmed that, apart from free-to-air broadcasters and satellite providers operating outside New Zealand, businesses involved in broadcasting transmission can be liable to pay the TDL.

The result is that Sky TV is now liable to contribute to the TDL for the first time and Kordia will pay a higher share than previous years.

A copy of the draft determination and information about how to provide a submission is available on the Commission’s website. Submissions are due by 5pm, 23 November 2021.

The Commission expects to release its final determination in December after considering feedback.

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