Chorus of disapproval; Telecom network arm refunds TelstraClear

10 Jul 2012

Chorus, Telecom New Zealand’s newly independent network infrastructure arm, has reportedly issued fellow fixed line operator TelstraClear with a substantial refund relating to seven years’ worth of surplus Telecommunications Service Obligation (TSO) charges. The settlement comes after TelstraClear sought partial TSO repayments from 2003/04 to 2007/08 alongside a reduction in its outstanding payments for 2008/09 and 2009/10; last year the Supreme Court ruled that the Commerce Commission had erred in setting the levy too high. The terms of the deal are to remain confidential, but settle all issues arising from the original Supreme Court decision.

Chorus assumed responsibility for the TSO liabilities from Telecom after the two companies were structurally separated in November 2011, as a prerequisite for the incumbent participating in the government’s Ultra Fast Broadband (UFB) scheme. Previously, under the terms of the TSO rival telcos needed to pay Telecom millions of dollars per annum as their share of the costs faced in supporting customers in less economically viable areas. However, the TSO has since been scrapped and replaced by the Telecommunications Development Levy, which is currently being used to fund the government’s in-deployment Rural Broadband Initiative (RBI).

As previously reported by TeleGeography’s CommsUpdate, in August 2011 Telecom settled a long-running battle with mobile operator Vodafone New Zealand, three months before the aforementioned Supreme Court ruling. The settlement of that seven-year dispute brought an end to an extensive legal battle between the two parties that involved three Supreme Court cases, two High Court actions and two disputes overseen by the Commerce Commission. That judgment paved the way for other carriers, such as TelstraClear, to review their own TSO obligations to Telecom.

New Zealand, Chorus (New Zealand), Spark