MyRepublic Penalised For Failing To Meet Levy Requirements

The Commerce Commission has penalised internet provider MyRepublic for breaching its statutory obligations under the Telecommunications Development Levy (TDL).

The TDL is paid by larger telecommunications firms and is used by Government to pay for telecommunications infrastructure, including the relay service for the deaf and hearing-impaired, broadband for rural areas and improvements to 111 emergency calling services.

Under the Telecommunications Act, liable companies must provide the Commission with annual audited financial information that the Commission can use to apportion the levy.

MyRepublic failed to provide the required information by the due date and only did so after being pursued by the Commission for several months. MyRepublic was issued with a written warning for a similar breach in 2018.

“MyRepublic has now breached its TDL obligations for two years in a row,” says Telecommunications Commissioner Tristan Gilbertson.

“This is unacceptable – it undermines the integrity of the system and is unfair on the New Zealanders who depend on the critical infrastructure and services supported by TDL funds.”

The Commission decided to issue a civil infringement notice in response to MyRepublic’s breach. This carries a fixed pecuniary penalty currently set at $2,000 in the Act.

Should MyRepublic fail to comply in future, the Commission will take MyRepublic’s previous breaches into account when considering the appropriate enforcement response, including proceedings to pursue a pecuniary penalty in the High Court (of up to $300,000 for each breach).

“We’ve taken this action to reinforce the importance of compliance with statutory obligations and signal to all stakeholders that future non-compliance by any liable company will be met with more stringent enforcement responses,” Mr Gilbertson says.

A copy of the civil infringement notice has been published on the Commission’s case register.

An overview of the TDL and how it is calculated can be found here.

Background
The TDL was established in 2011 and was set by the Government at $50 million a year until 2019.

It is set to decrease to $10 million in 2020.

The information disclosure requirements for companies liable to pay the TDL are set out in section 83 of the Telecommunications Act. Enforcement responses available to the Commission where a company has failed, without reasonable excuse, to comply with section 83 are to:

• issue a written warning
• serve a civil infringement notice under section 156D incorporating a fixed penalty of $2,000 or
• apply to the High Court for an order requiring payment of a pecuniary penalty to the Crown. The High Court can impose a penalty of up to $300,000 for each breach.
 

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