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Policies for licensing VHF-FM broadcasting services
Certification of Licences (Band Expanders)
Power Upgrading and Synchronous Coverage Systems
Frequency Separation between Licences
Scope
This memorandum identifies recent policy changes and the underlying reason and authority for such changes. The policies are effective from the date of announcement of Government VHF-FM broadcasting policies, on 3 October 2006.
(For detailed Cabinet decisions on VHF-FM Broadcasting: Frequency Availability and Allocation, please refer to POL Min (06) 15/7).
Planning of Further Licences
Government has previously announced that it will make commercial offers of new licences to licensees whose rights expire in 2011. This work, including any necessary frequency changes, is now proceeding and offers are anticipated in late 2006. The offers will include those commercial licences existing at September 2005 which have been allocated on a long term basis, typically by auction or tender, and those licences specifically agreed by the Ministry because of particular circumstances.
The Government has now agreed (October 2006) to create further licences to be allocated to meet its broadcasting objectives. This policy will replace the previous prohibition of new licences (apart from those agreed by Government) in the upper portion of the FM band above 100 MHz. The necessary technical planning work is anticipated to be completed so that licences can be allocated by mid 2007. This planning will take into account the frequency changes to be implemented in the commercial offer of licences for the period beyond 2011. Until this work is completed, and the offers for renewal of existing long term licences are completed, any short term licence, including those already allocated, will continue to be treated as temporary. Arrangements for allocating present and new temporary licences on a longer term basis by auction or other contestable process will be considered only after the Ministry has completed this work. In some cases it may be necessary for existing temporary licences to be cancelled if they inhibit the new planned licences.
Policy
At this time, and in accordance with Government decisions, completion of licence renewals for the period post 2011 and planning of further licences will have priority over any further licences, power increases, or synchronous extensions that may be sought by applicants.
Any existing and new short term or temporary licences will be only be considered for long term allocation by a contestable process (i.e. auction) after the confirmation of offers for licences beyond 2011 and after the completion of technical planning in accordance with Government's announcements of October 2006.
Certification of Licences (Band Expanders)
Following a Court decision in 2004 related specifically to the Christchurch area the Ministry adopted a conservative stance with regard to the granting of licences and the power permitted for some licences. This was because certifying particular new licences posed risks to the Ministry due to the use of "band expanders" in conjunction with car radio receivers designed for use in Japan but imported in used vehicles. Band expanders incorporate shift frequencies of 10 MHz or 12 MHz (or other frequencies) and, if used in areas where transmission frequencies are separated by such a separation, can cause degraded reception for the listener on particular frequencies.
A further Declaratory Judgement in the Auckland High Court (September 2006) has clarified that the use of a band expander does not in itself create interference, such that it would prevent certification of a licence under the Act. Essentially the Court agreed that the effect of a band expander was to degrade the reception of the particular user but this was not a factor to be considered in certification.
Policy
The Ministry will no longer limit creation of new licences at a site simply because there is a 10 MHz, 12 MHz or similar frequency separation between licences at the site (or between licences at sites serving a common coverage area). Licences that have previously been limited in power because of such frequency separations can be now considered for an increased power on application by the licensee.
The overall priority for renewal and planning is also applicable.
Power Upgrading and Synchronous Coverage Systems
There are anticipated to be periodic applications for both power increases and for use of synchronous systems to extend coverage. Synchronous systems use the same frequency for two or more licences which provide overlapping coverage. Typically a licensee would seek a new licence at a site that has overlapping or common coverage with the coverage of an existing licence. It is impractical to allocate the new licence by a contestable process because it can only be used in conjunction with the existing licence. Therefore the value of a new long term synchronous licence is valued by assessment of other market data in the relevant area. The Ministry will continue to assess value based on population coverage. Licences that synchronously extend coverage from an existing licence and are offered on a long term basis will not be required to undergo a contestable allocation. Such licences will be valued on the same basis as an equivalent non-synchronous licence, without any reduction because of potential overlapping coverage.
Power increases or new synchronous licences have the potential to limit the creation of further licences that might be necessary to meet the announced priorities of Government. The Ministry will therefore only permit applications for power increases, or synchronous extensions, when it is evident that such changes will not limit the offer of renewal licences or the planning of licences for allocation in 2007.
Policy
Applications for power increases or synchronous licences will only be granted on a temporary basis unless it can be demonstrated that the proposed licence(s) will not preclude the commercial offer process and will not preclude planning for licences to meet Government's broadcasting objectives.
Where synchronous licences are offered on a long term basis (i.e. until 2011) they will be offered at values based on comparable licence values in the area, with each coverage area assessed without regard to any other co-frequency synchronous licences. The 110% loading will continue to apply as in the case of power increases but if the licensee seeks a competitive allocation then they must agree to all the existing or proposed synchronous licences being offered as a package.
Frequency Separation between Licences
There will be no decisions on changes to the current policies for frequency separation until after the technical planning for additional FM licences is completed in early 2007.
