Chorus to pay rural telco levy

Commerce Commission releases its final decision on the Telecommunications Development Levy

Chorus must pay a share of the Telecommunications Development Levy, the Commerce Commission announced today.

Chorus had claimed that because it is a wholesale provider and around 80 percent of its prices are regulated it is not able to pass on the cost of the levy, and should therefore be exempt. Chorus had originally tried to avoid paying the levy by claiming it should not be liable in the first year because it hadn’t traded as a separate company - it was a division of Telecom.

However both arguments have been rejected by the Commission and Chorus must pay $6.4 million as its contribution to the TDL.

The Commission had considered Chorus’ concerns about its ability to recover the costs of the TDL, but noted the setting of wholesale prices was outside the TDL process, says Telecommunications Commissioner Stephen Gale.

For the 2011/12 year, the Commission has determined 26 companies will contribute, with Telecom paying just over half of the $50 million levy.

The full decision can be read here.

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