Vodafone contemplates Supreme Court

Vodafone may take its case against TSO levies it paid five years ago all the way to the Supreme Court after its case was dismissed by the Court of Appeal.

In a majority decision, the Court rejected Vodafone’s appeal against the $17.9 million in TSO levies it paid to the Commerce Commission for the year 2003/04. That money was effectively handed over to Telecom in order to compensate it for delivering services to uneconomic rural customers.

Vodafone head of government relations Roger Ellis says the company is considering its options.

“We’ll need to consider the judgement carefully,” he says. “Whether we seek leave to go to the Supreme Court, we’ll talk to our lawyers about that.”

Ellis took heart from the fact that it was a majority decision, with the Court of Appeal president Justice William Young siding with Vodafone. At the centre of the case is whether the Commerce Commission took into account technologies that compete with fixed line services when considering what the determination should be.

Vodafone has also appealed $16 million it paid for TSO costs in 2004/05 and $17.2 million in 2005/06 and is awaiting judgement.

In the meantime, the government has proposed scrapping the TSO in favour of an industry levy. Public submissions on the TSO reform have closed and a final decision is expected early next year.

“It (TSO) continues to be an ongoing costly exercise for all concerned and it’s again another reason to make changes to the TSO regime,” says Ellis. “The current TSO regime around the levy calculation is quite dysfunctional really.”

But Telecom spokesperson Mark Watts says the case isn’t about reform, it’s about the cost of delivering services to remote customers.

“Telecom welcomes this objective and independent confirmation from the Court that there is a real and substantial cost in providing the TSO services

“The key question is how the TSO is best provided on a contestable, technology-neutral and forward-looking basis, and Telecom looks forward to continuing its discussions with government and industry on this issue.”Vodafone was ordered to pay costs to Telecom and the Commission.