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Chorus cops 13 percent of $50 mln telecommunications levy

Thursday 27th June 2013

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Chorus, the network operator spun out of Telecom, will have to stump up $6.4 million for its share of the annual levy to fund commercially non-viable telecommunications services after raising concerns about its ability to recoup the cost.

The Commerce Commission today set how much each of the 26 providers fingered will have to pay towards the Telecommunications Development Levy for 2011/12, which replaces the old Telecommunication Service Obligation that Telecom operated under.

The antitrust regulator considered Chorus' concerns about its ability to recover the costs of the levy "but noted the setting of wholesale prices was outside the TDL process," it said in a statement.

Telecom will pay almost 51 percent of the levy, amounting to $25.4 million, followed by Vodafone New Zealand with about $11 million. Vodafone Fixed, the entity which replaced TelstraClear, will pay $3.9 million and Two Degrees Mobile will stump up $1.2 million.

The major phone companies account for almost 96 percent of the total levy.

"The commission will follow a similar approach in setting future TDLs," Telecommunications Commissioner Stephen Gale said. "A consistent approach year on year will reduce future compliance costs for telecommunications providers."

The TSO, formerly known as the Kiwi Share, was used to pay for telecommunications infrastructure where it isn't immediately profitable to do so, such as in rural areas. Its replacement is a contestable fund that officially started last year, and will initially meet the government's $300 million rural broadband initiative.

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