Commerce Commission outlines approach to telco levy

The Commerce Commission has today released a further paper on how it plans to set the Telecommunications Development Levy that will be paid by teleco firms to the government.

Introduced by the Telecommunications (TSO, Broadband, and Other Matters) Amendment Act 2011, the levy was designed to streamline and more evenly apportion industry contributions for telecommunications infrastructure developments.

In July the Commission released the Notification of Potential Liability for the Telecommunications Development Levy 2012, which provided a list of potentially liable persons for the levy.

Work to identify and confirm the qualifying status of liable persons is still ongoing, with the Commission unable to confirm the list of qualifying liable persons for the 2011/12 year.

The Commission however believes this process will be complete before the end of the year and released the following report:

The Commerce Commission today released a further paper on how it plans to set the Telecommunications Development Levy that will be paid by telecommunications companies to the government.

The government will use the $50 million a year levy to fund things like the relay service for the hearing impaired, the Rural Broadband Initiative and upgrades to the 111 emergency calling system.

The discussion paper outlines what telecommunications company revenues are likely to attract the levy. Revenue earned from services such as voice and content delivery will be captured but not revenue from the content itself.

The aim is for a wide group of public telecommunications network operators to contribute to the levy, while avoiding levying the same services at both the wholesale and retail level.

“Levying just the public telecommunications network operators’ delivery revenues is complex because delivery is increasingly bundled with hardware, like handsets, and content," said Dr Stephen Gale, Telecommunications Commissioner.

"So we are keen to hear the views of interested parties before we finalise the levy mechanism."

Interested parties are invited to make submissions on the discussion paper by Friday 2 November 2012. Cross-submissions will not be invited as part of this process but interested parties are welcome to provide feedback at a two-day workshop in Wellington on 13 and 14 of November 2012.

You can find a copy of the discussion paper on the Commission’s website