Expiry of rights implementation and offers: Minutes

Contents

Part A: Implementation process

Part B: Rights expiring in 2010

UHF-TV and DMS spectrum licences

Management rights at 2.3GHz

Further work

Consultation

On 13 December 2004, following reference from the Cabinet Policy Committee (POL) (from its meeting on 2 December 2004), Cabinet:

1 noted that in May 2003 Cabinet Policy Committee (POL) agreed to a policy on expiry of commercial spectrum rights whereby, subject to case-by-case assessment, replacement rights will be offered to existing rightholders five years before expiry, at a price calculated using a price-setting formula, and if the offer is not accepted, the rights will be reallocated by auction [POL Min (03) 9/1];

2 noted that in May 2004 POL:

2.1 authorised the public release of the discussion paper "Implementation of a Price-Setting Formula for Reallocation of Commercial Spectrum Rights";

2.2 invited the Associate Minister of Communications to report to POL by 31 March 2005:

2.2.1 seeking final approval of a process for implementation of policy on expiry of commercial radio spectrum rights;

2.2.2 seeking approval for contractual offers to be made to relevant parties for spectrum rights due to expire before 30 April 2011;

Part A: Implementation process

3. agreed that the case-by-case assessment of specific spectrum rights will be initiated approximately six years prior to expiry of the rights and released for public consultation by the Minister of Communications, who will then report to POL at least five years before expiry;

4. agreed that the case-by-case assessment may consider, without limitation:

5. agreed that any renewal offers agreed by Cabinet will be open for acceptance for three months, and that if a rightholder does not accept the offer and indicates its intention to bid for the rights, a contestable auction allocation will be held within one year of the offer date;

6. agreed that the terms of any offer and auction rules will:

7. agreed that if a rightholder does not respond within three months, or it rejects the offer but does not indicate its intention to bid for the rights, the rights may be reconfigured and allocated at a later date, as approved by the Minister of Communications;

Part B: Rights expiring in 2010

UHF-TV and DMS spectrum licences

8. noted that a case by case assessment including consultation with rightholders has been completed for spectrum licences under management rights 1 and 2, consisting of seven UHF-TV licence sets sold in 1990 for near nationwide coverage (UHF-TV nationwide sets), individual UHF-TV licences sold from 1990 and licences for "distributed music services" (DMS) sold in 1991;

9. agreed to offer replacement spectrum licences to holders of UHF-TV licences due to expire on 11 March 2010 in management rights 1 and 2:

9.1 for a maximum renewal period of 10 years from 12 March 2010 with settlement required on or before 12 September 2009;

9.2 only at those transmitter sites in current ongoing use for UHF-TV broadcasting as at 31 December 2004, provided that if a licence for which an offer is not made comes into use prior to settlement, that licence will be considered for renewal if it is not likely to cause technical detriment to planning for digital services;

9.3 subject to a condition of settlement that rightholders of individual licences demonstrate current ongoing use of the corresponding licence for broadcasting as at the settlement date;

9.4 subject to a condition of settlement that rightholders of UHF-TV nationwide sets demonstrate current ongoing use of a majority of the corresponding licences for broadcasting as at the settlement date; provided that if this condition is not satisfied, only licences in use will be renewed, subject to a pro-rata price reduction to reflect the population able to be served by the renewed licences;

9.5 according to technical parameters reflecting current engineering practices and actual utilisation of rights;

10. agreed:

11. agreed that DMS spectrum licences not be offered for renewal;

Management rights at 2.3GHz

12. noted that a case by case assessment including consultation with rightholders has been completed in respect of rights between 2.3 and 2.396GHz and that these rights have not had significant utilisation since creation in 1990;

13. agreed that replacement management rights over frequencies between 2.3GHz and 2.396GHz not be offered to current rightholders, and that this spectrum should be reallocated in due course following technical re-planning;

Further work

14. authorised the Minister of Communications from time to time to make such decisions and approve such offers, auction rules, terms and conditions, agreements and other documentation as may be desirable to implement Cabinet decisions on renewal of specific spectrum rights;

15. noted that renewal decisions are due before April 2006 for commercial AM and FM spectrum licences, which expire in April 2011, and that the Associate Minister of Communications has been invited to report on renewal of these rights by 31 March 2005 [POL Min (04) 12/4];

16. noted that the Associate Minister of Communications will announce the decisions as outlined above and release the paper under POL (04) 369 and this minute;

Consultation

17. noted that the Associate Minister of Communications indicates that consultation is not required with the government caucuses or other parties represented in Parliament.