Commission welcomes High Court judgment clarifying who pays telecommunications levy

The Commerce Commission welcomes a High Court judgment issued at the end of last week clarifying whether businesses involved in the transmission of broadcasting signals should be required to contribute to the Telecommunications Development Levy (TDL).

The Commission sought clarity from the High Court after amendments to the Telecommunications Act in 2018 removed an exemption for “broadcasting” from the definition of “telecommunication”. The other parties involved in the case were Kordia, Sky TV, TVNZ, Optus, and Chorus (as an intervenor).

Telecommunications Commissioner Tristan Gilbertson said the Commission must determine the amount of the TDL paid by industry participants according to a statutory framework in the Act by around December each year and welcomes the clarity that the judgment gives.

“It was important for us to be able to decide on liability for the TDL with a clear view of whether any of the broadcasters are liable as a result of the amendments to the Telecommunications Act,” he said.

“The judgment confirms that, with the exception of free-to-air broadcasters and satellite providers operating outside New Zealand, businesses involved in broadcasting transmission can be liable to pay the TDL.

“The judgment won’t make any difference to the total funds collected by the levy, which is set at $10 million a year, but it will affect the contributions made by individual companies, which is proportionate to their revenue from telecommunications services.

“We will now use the guidance provided by the High Court to move ahead and make our TDL determination for 2021/22.”

The levy is paid by companies earning more than $10 million per year from telecommunications services. It is used 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 levy was set at $10 million for the 2019/20 year and is adjusted for inflation for subsequent years.

A copy of the judgment is available on the Commission’s website.

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