3. Summary of Submissions Received

3.1 400 kHz Channel Spacing

3.2 The Use Of Synchronous Systems

3.3 Infill Coverage Techniques

3.4 Extension of Band to 87.5 MHz

3.5 LPFM Power Issues

3.6 Reservation of Licences for a National Non Commercial or Non Profit Network

3.7 Impact of New Entrants, Allocation Mechanisms, and Licence Conditions

3.8 Allocation Mix of New Frequencies

The Ministry received 39 submissions from such interest groups as, commercial operators, non-commercial operators, site managers, LPFM operators, spectrum engineers and the Human Rights Commission.

A number of submissions included views on the LPFM General User Licence that were outside the scope of the paper. These have been summarised in Appendix A. A list of respondents is contained in Appendix B and individual submissions are posted on the Ministry's website.

Although not specific to one proposal it was highlighted that the licensing of services in the 100 MHz-108 MHz band must take due account of the 'safety of Life' issues pertaining to adjacent aeronautical services operating in the band 108 MHz-137 MHz. A number of technical considerations were put forward to achieve this and will be taken into account by the Ministry.

This section summarises the responses received to the Ministry's proposals.

3.1 400 kHz Channel Spacing

Proposal A - The Ministry seeks comments on adopting a policy of permitting co-sited transmitters with a frequency separation of 400 kHz, providing that the licensed eirp of such transmitters are within 10 dB of each other. Existing planning standards for determining compatibility with licences in adjacent areas would also apply.

Proposal A was generally supported in 21 submissions, however, many relied on the accuracy of cited studies in making their decision. Where new frequencies became available the respondents preferred that they be made available for non-commercial broadcasting, local broadcasting, and new operators.

Submissions reinforced the discussion paper view that cheaper analogue receivers (e.g. clock radios) may have difficulty distinguishing between stations at this spacing, but did not consider that this warranted a change to the proposal. One respondent took the opposite view and opposed 400 kHz spacing, to support this stance they provided the results of a survey of 300 households in the Auckland region, which indicated that 67% of home radio receivers have analogue tuning and 33% of house households only have analogue radio units.

With respect to channel spacing, one respondent proposed 600 kHz spacing instead of 400 kHz to lessen interference and one suggested reengineering the whole band for 400 kHz spacing.

The proposal was opposed by two respondents, stating that it erodes the technical compatibility and decreases the value of existing licences, impedes the licence renewal process, and may limit the options for digital audio broadcasting.

Three other submitters provided further technical considerations, but did not specifically oppose or support the proposal. These details are not summarised here but will be considered in the Ministry's overall consideration of 400 kHz spacing.

Other issues

• 400 kHz combiner units would need to be developed and are likely to be more expensive.
• Site owners accommodating licences separated by 400 kHz are likely to incur infrastructure costs in relation to towers and antenna systems. Existing broadcasters at these sites may also require new infrastructure.
• The co-siting requirements may result in restrictive costs as the existing licences are likely to be owned by the larger licence holders who favour the more expensive sites of BCL and JDA for their transmitters.
• Other technical issues, such as the generation of intermodulation products and interference risks posed by adjacent bands, need to be considered, in addition to the receiver protections ratios outlined in ITU-R Recommendations.

Overall: There is support for changes that will increase the number of broadcasting frequencies, as long as it does not impact on the rights of existing licence holders without their agreement. The other issues raised concern operational considerations that need to be taken into account when acquiring a licence.

3.2 The Use Of Synchronous Systems

Proposal B - The Ministry seeks comments on the proposed criteria for use of synchronous systems and in particular on the competitive aspects of allocating licences for synchronous use without a contestable allocation process.

Of the submissions received, 15 supported the proposal. Many reiterated the criteria that the Ministry needs to ensure that any synchronous system was technically compatible with existing licences and that any divergence from the existing conditions, including movements to new frequencies is agreed to by all affected parties.

From these 15 submissions the following points were made.

• Four respondents wanted to restrict the use of synchronous systems to new entrants to prevent potential domination of existing licensees.
• Four respondents only supported the use of synchronous systems for completion of coverage where terrain was difficult.
• One respondent did not support a financial charge for the resulting increased coverage as coverage from the transmitters would overlap, the technology is expensive, and the Ministry has the ability to sell the released spectrum.
• One respondent proposed that where synchronous licences are available together, they should be rolled into one single lot for allocation.

Two respondents opposed the proposal because synchronous systems could be used to increase the dominance of the major operators, as they can be used to extend coverage outside the initial coverage area.

Overall: The benefits of synchronous systems are recognised and their use is supported, as long as the Ministry adheres to the discussion document criteria. Only one respondent proposed allocating these licences through a non-contestable process.

3.3 Infill Coverage Techniques

Proposal C - The Ministry seeks comments on the provision of infill coverage through licences separated by 400 kHz from the main coverage service, or synchronous systems, initially in Wellington but later in other centres following technical proving.

This proposal was supported in 16 submissions. Respondents recognised the need for, and benefits of, using infill coverage techniques. The support of two of these respondents was conditional on the frequencies not being able to be put to better use by another broadcaster. Three respondents also supported synchronous AM and FM systems, which was not considered in the discussion document.

Two respondents opposed power of 47 dbW as one of the options for coverage in Wellington, preferring lower power licences and use of infill techniques.

Other points in relation to 400 kHz spacing for coverage infill are outlined below.

• Where coverage overlaps, there is a risk that protection ratios will be exceeded.
• Interference to the primary signal may be acceptable to the owner if the population gained is greater than that which receives interference. But the effect on the other broadcasters will need to be considered.
• Caution is required when judging the outcome of trials on the basis of the number of complaints received (or not received). It may be easier for listeners to tune to another station than complain given large choice of stations. There are better measures for judging the outcome of trials, for example, conduct audience ratings of the incumbent before and after introduction.

The use of synchronous systems for coverage infill is seen as the spectrally more efficient method, but requires greater engineering and the coverage areas need suitable geographic isolation and sites.

Overall: The adoption of infill techniques is supported, provided that where other parties are affected their agreement is obtained. Where 400 kHz spacing is the method used the Ministry should ensure that this spectrum cannot be better used by the establishment of another station.

3.4 Extension of Band to 87.5 MHz

Proposal D - The Ministry seeks comments on the proposal to plan and implement VHF-FM broadcasting services between 87.5 MHz and 88 MHz. This would require the present Land Mobile use to be compressed into the band below 87.5 MHz. If the proposal is adopted, what time frame should apply to the transition?

Proposal D was well received with 23 submissions, 19 of which were from broadcaster, supporting the extension of the band down to 87.5 MHz. A few respondents qualified this support in relation to the spectrum needs of land mobile operators.

One respondent, a mobile operator, had experienced interference issues from LPFM operators and was concerned that the risk of interference would increase if the LPFM band was moved closer to land mobile users. This respondent suggested that any extension should be considered on a case by case basis, while consulting with all affected parties.

One respondent suggested that there would be a greater risk of out of band interference and intermodulation interference to mobile users as a result of the proposal.

With respect to the second part of the question, on what time frame should apply to the transition, eight options were put forward.

• 12 months.
• 12-18 months.
• two year transition as licences expire.
• five years.
• Progressive rollout, with a final date of December 2006.
• As soon as possible, especially if demand from mobile operators for use of the band is not strong.
• Any transition needs to balance the needs of both parties.
• The transition process should follow the process used to clear the upper FM band.

Some respondents also stated their preference as to how the additional spectrum should be used. Three respondents favoured extending the licensed band and moving the LPFM band down to the bottom edge, one also proposed special or temporary use licences and a guard band for LPFM from licensed users. Four respondents proposed that the additional spectrum should be used to extend the LPFM band, while four submitters proposed that the additional spectrum be allocated to access broadcasters.

Overall: The implementation of VHF-FM broadcasting services between 87.5 MHz and 88 MHz is supported. The transition timeframe could follow that used in clearing the upper FM band. This approach was preferred in the submission from the land mobile operator.

3.5 LPFM Power Issues

Proposal E - Comments are sought on the proposal to allow a greater power for "low power" FM broadcasters under the general licence in the 88.0 MHz to 88.4 MHz range. Is an eirp limit of 5 watts suitable? Should the method of measurement be changed to specify, say, 5 watts at the transmitter output and allow any antenna to be used?

An increase in power to 5 Watts was supported in 20 submissions, of which 14 stated that they operate LPFM stations. In six cases this support was given in conjunction with recommendations on further LPFM restrictions (licensing and content). Six respondents suggested that the increase should apply to the entire lower and upper guard band, as limiting frequencies for higher power will only cause greater congestion. These respondents believed that interference risks were unfounded as high powered stations operate on 107.9 MHz and 108 MHz in other countries which use the same standard aviation band and the aviation industry has a self imposed guard band of 108 MHz-109 MHz. Three respondents suggested that even higher powers could be accommodated. The proposal was generally supported as the increased power was seen to provide better broadcasts and coverage for people serving local communities.

Opposition was received to this proposal from six respondents. It was considered that increased power would increase congestion problems that already exist (three submissions) and would allow some licences to become commercially viable which raises issues of equity as other operators had to bid at auction to win licences. The increased power would also result in fewer operators being able to be accommodated in the same area.

An increase to 1 Watt was believed to be sufficient by two respondents.

Changing the method of measurement did not receive as much attention as the increase in power. Those who did respond preferred the existing method as it was consistent with the measurement of full power licences and is less problematic.

Overall: The proposal to increase power in the 88.0 MHz to 88.4 MHz range was supported, however, it was identified that this is likely to result in greater congestion in the absence of increased control over access and that it may allow some LPFM operators to compete with broadcasters with commercial licences.

3.6 Reservation of Licences for a National Non Commercial or Non Profit Network

Proposal F - Comments are sought on the proposal to reserve a further set of licences (in addition to the present reservations) for a non-commercial or "non for profit" network. What programming purposes would be best broadcast on such a network (or equivalent individual area licences)? Who should manage such a service, how would it be funded and when could or should it be implemented?

Proposal F was supported by 13 respondents. The table below outlines programming preferences, the support for each and reasoning behind their choice.

Six respondents opposed the proposal. Three preferred the licences to go to local broadcasters. Three believed there was sufficient community broadcasts available including the two unused reserved networks and the availability of the Radio New Zealand services.

Overall: There appears to be demand to reserve frequencies for another national network (or equivalent), however, what format it should take is less clear. Provision for a national access radio network received the most support and could also accommodate the emergency communications network.

3.7 Impact of New Entrants, Allocation Mechanisms, and Licence Conditions

Proposal G - What advantages or disadvantages would occur from new entrants in local broadcasting markets? Would an auction allocation, with limitations on existing licence holders participating, be a satisfactory allocation mechanism? Would any other mechanism be preferred? Should restrictions on use and/or transferability be established for any such licences?

The Ministry received 17 responses to this question which have been summarised below. Most did not clearly state the benefits of new entrants in the local broadcasting market; however there was clear support for new entrants.

The advantages provided included increased local public interest, involvement, advertisement of local news and events, increased diversity and enhancement of public good.

Two submissions were received opposing new entrants being granted new frequencies in local markets as it would have a negative impact on the value of existing commercial licences. Any auction-type allocation should not prevent new, different, services being offered by existing operators.

In relation to allocation mechanisms, three supported an auction with restrictions on the participation of existing licence holders. Five were in favour of some form of administrative allocation, with limitations on participation and consideration of content.

Comments on administrative allocation included:

• Licences should be allocated to registered non-profit organisations and non-commercial operators.
• Licences should be allocated local operators only.
• Licences should be allocated to NZ owned and operated entities.
• Allocation by application and review, following a Ministry for Culture and Heritage structure.
• Where there is competition for a licence, format and point of difference to be taken into account.
• Allocation should take consideration of community demand, applicant's ability to operate a station and obtain funding.
• Licences should not be available to current holders of high powered licences.
• No specific restriction on licence use, if the licences are transferred the same allocation conditions should apply.
• Licences should be granted for a period of years and be non-transferable.
• A set licence fee should apply.
• Licence conditions should limit networked music to a maximum of 1 hour.

Other more general comments included:

• The provision of locally focused information and music creates pressure on networks not to withdraw their existing community services.
• An allocation by auction is not supported due to the financial burden placed on the winners, even if existing broadcasters are excluded.
• Sufficient commercial broadcasters exist and further commercial allocations would only result in more generic formats.
• Licence allocation should be based on ability and involve a three step process where operators graduate from LPFM up to full power licences.
• Four submissions from access broadcasters suggested that there should be restrictions on transferability of commercial operations. For non-profit access community radio stations transferability should be allowed to enable satellite studios for small communities that are not currently served.

Overall: Clear support for enabling new entrants to enter the market by restricting the participation of existing licence holders. An administrative allocation was slightly preferred to an auction.

3.8 Allocation Mix of New Frequencies

Proposal H - Comments are sought on the option of: reservation and later allocation of licences for a national not for profit network (or equivalent); for an allocation of two licences for local area broadcasting restricted to new entrants; and for allocation of two licences for general commercial use in each area. Is the balance between national reservation, local broadcasting and full commercial broadcasting appropriate?

The Ministry received 18 submissions responding to this proposal. The views are summarised below.

• Six did not specifically question the mix, but took the opportunity to express their support for a not for profit network (four in favour of access, one senior and one generic not for profit).
• Four respondents believed that sufficient "not for profit" frequencies exist and opposed further reservations for this purpose favouring additional local licences.
• Five suggested some form of ownership restrictions should be put in place to promote new entrants.
• Two supported local allocations.
• Three respondents were specifically against further commercial allocations.
• Two respondents opposed the allocation of further licences prior to the resolution of the renewal of rights process for AM/FM licences.
• Two respondents oppose the licences restricted to new entrants.
• One respondent proposed an allocation of licences to not for profit groups via a restricted entry auction, requiring the groups to solicit the financial support of the community.
• One respondent contends that the 800 kHz band plan must be maintained before releasing any further spectrum

Overall: The divergent views tended to reflect the backgrounds of the organisations and their wish to enter or limit the market, few strong themes emerged from the submissions.