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Telco Plan B under fire over failure to comply with levy requirements

Telecommunications company Plan B Group has been officially warned by the Commerce Commission over its failure to meet statutory obligations to provide information needed to calculate the 2019/20 Telecommunications Development Levy (TDL).

The government uses the annual levy to pay for telecommunications infrastructure including the relay service for the deaf and hearing-impaired, broadband for rural areas, and improvements to the 111 emergency service.

Plan B was liable to pay the levy for the first time in 2019/20 but failed to provide specified financial information and an assurance or audit report within the required timeframe.

"It is important that parties liable to pay the levy, especially those new to the scheme, actively take steps to understand their TDL obligations as set out in the Telecommunications Act and ensure they comply," says Telecommunications Commissioner Tristan Gilbertson.

"We will be strengthening our messaging to parties facing TDL liability for the first time, to help make sure that TDL obligations are understood, but this will come with expectations for full compliance and a more robust enforcement response to any breaches," he says. 

"In this instance our view is that a warning letter is the appropriate response. We acknowledge that 2019/20 was the first year Plan B was liable to pay the levy and had reporting obligations under the Act," Gilbertson says. 

"Further, the final 2019/20 TDL was not delayed because of Plan Bs failure to provide information and any commercial gain it initially received by not providing the assurance report was reversed when Plan B provided it three months after the due date."

Gilbertson says the Commission will take this warning into account if Plan B engages in the same or similar conduct in the future.

A copy of the warning letter has been published on the Commissions case register.

The TDL was established by legislation in June 2011. It is set at $10 million a year from 2020, which the Commission is required to allocate proportionately to qualifying telecommunications providers.
 
The levy is paid by companies, or groups of companies, earning more than $10 million per year from operating a component of a public telecommunications network (fixed or wireless).
 
The Telecommunications Act requires liable telecommunications service providers to supply specified information to the Commission to allow it to calculate the levy which MBIE collects.  
 
The Act allows the Commission to take various actions in response to breaches of TDL obligations, including seeking a penalty in the High Court to a maximum of $300,000 per breach.