Govt issues $100m broadband pledge following Telco Levy Bill passing

Communications Minister Amy Adams says passing "underscores the Government’s commitment to extending enhanced connectivity to regional New Zealand."

The passing of the Telecommunications (Development Levy) Amendment Levy Bill underscores the Government’s commitment to extending enhanced connectivity to regional New Zealand.

That’s the view of Communications Minister Amy Adams, who reports that the Bill has been passed over the weekend with support from all parties, “other than Labour.”

“The extension of the Telecommunications Development Levy (TDL) will fund the $100 million expansion of fast, reliable broadband to the regions,” Adams adds.

“It will also establish a $50 million fund to extend mobile coverage in black spot areas such as along main highways and in popular tourist destinations.

“While the Government has made excellent strides with the first phase of the Rural Broadband Initiative, we want to do even more to extend better broadband to rural New Zealanders.”

Adams says nearly 325,000 households and businesses can now connect to RBI services.

The Telecommunications Development Levy is an industry levy which is collected from about 22 telecommunications companies that earn more than $10 million a year from operating a public telecommunications network.

It is used to fund open access infrastructure in areas where it would otherwise be unlikely to be commercially viable for them to build that infrastructure. Levy payers can then use that infrastructure to provide services to their customers.

According to Adams, the passing of the Bill through all stages as part of Budget legislation provides “stability and certainty” to the telecommunications industry and consumers.

“The setting of the levy allows the Government to get on with extending rural broadband to the areas that sit outside the UFB footprint, boosting connectivity across New Zealand, and creating jobs for Kiwis,” Adams adds.

“Next steps of the RBI extension require the funding to be in place and the passing of this legislation enabled this to happen without delay.”

The Bill continues the levy at its current level of $50 million to 2018/19 - it was previously set to drop to $10 million per annum in 2016/17 and this will now occur in 2019/20.

For a consumer on a $19 basic prepaid mobile phone package, the monthly contribution to the TDL is 22 cents, what Adams claims is the equivalent of the cost of a single text message.

Adams says the telecommunication companies have incorporated the levy at this level into their costs since 2011, so there is no justification for prices to rise as a result.

“Continuing the TDL at its current level until 2019 will ensure the telecommunications industry invests in rural and remote areas so the connectivity needs of all New Zealanders can be meet irrespective of where they happen to live, Adams adds.

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