8.2 Principles for transition

Transitional rights under Act

134. Most present licensees did not hold licences in 1989 and therefore do not qualify for transitional rights under s.173 of the Radiocommunications Act. Three parties are likely to have had usage of the band under licences issued in 1989 or earlier, but these licences have subsequently been cancelled in favour of new licences issued over the years. This has been required to accommodate new types of emissions required by licensees. For example, the licences in force in 1989 permitted analogue transmissions, and not newer technologies such as digital transmissions. These types of changes have required new licences to be provided.

135. Notwithstanding that transitional rights do not appear to be applicable, some parties are likely to have had continuing use of the band, under various licences, for similar purposes to that used in 1989. Therefore it is considered reasonable to ensure that suitable spectrum is available for a transition which allows existing investment in equipment to be used for at least a five year period from purchase date, and that future investments have adequate security under new licensing arrangements.
 

Security of tenure

136. The Government has recently taken decisions in principle (June 2007) on security of tenure for radio licences. These decisions confirm the desirability of transition plans in circumstances where management rights are to be created and that Government policies on transition plans in such circumstances are to be developed.

137. The nature of the licences in the 2.5 GHz band do not offer certainty of use, because of the need for coordination of use on each occasion, but it is understood that most use requirements have in practice been able to be met.

138. Notwithstanding that there is no present exclusivity, and that the Government decisions of December 2006, and more specifically of May 2007, make it clear that the present 2.5 GHz band usage was liable to be discontinued, and formal policies on transition plans are yet to be developed, it is clear that there is investment in this band and that it would be reasonable to provide an opportunity to utilise this investment before licences are cancelled.

139. It is therefore considered reasonable to ensure that there is:

• a period to allow for equipment to be purchased in new frequency bands; and
• an opportunity for existing equipment to be used for up to five years from initial purchase.

140. There is also an expectation that licences for any new equipment purchase would have a reasonable security of tenure. The announced policies on security of tenure are intended to provide a known and certain environment for investment in new equipment and would be applicable to any new licences provided.