Recommendations

47. It is recommended that the Committee:

1. note that commercial spectrum rights established under the Radiocommunications Act 1989 are due to expire from 2010 and that there is currently no confirmed policy in place for the reallocation of these rights;

2. note that Cabinet previously [POL Min (01) 29/8-9 refers]:

2.1 agreed to the following as interim decisions for a policy dealing with commercial spectrum rights at their expiry:

2.1.1 that commercial spectrum rights be reallocated five years before expiry for a further 20 years, subject to review on a case by case basis to ensure consistency with New Zealand's international radio obligations and the general objective of maximising the value of the spectrum to society as a whole;

2.1.2 that, subject to the review outlined in recommendation 2.1.1, the Crown should receive a fair financial return for the use of spectrum in the future period;

2.1.3 that spectrum rights be reallocated to existing rightholders based on price-setting formulae that estimate the market value of the rights, and that, if existing rightholders do not wish to pay this price, the respective rights be reallocated by way of auction;

2.2 agreed that a final decision on the policy decisions outlined in recommendation 2.1 would be subject to:

2.2.1 a satisfactory outcome on the issue of local content on radio; and

2.2.2 progress on radio services for young people; and

2.3 invited the Minister of Communications to report to the Cabinet Policy Committee seeking a final decision on the policy for dealing with commercial spectrum rights at their expiry when the development of the Code of Practice for local content on radio has been completed and the issue of radio services for young people has been progressed;

3. note that on 18 March 2002, Cabinet noted the (former) Minister of Broadcasting's advice that the conditions set by Cabinet for a final decision on the policy for dealing with commercial spectrum rights at their expiry (as outlined in recommendation 2.2) have been satisfied with respect to youth radio services, and that a public announcement of the Code of Practice would satisfy these conditions with respect to local content on radio [POL Min (02) 4/9 refers], and that the then Minister of Broadcasting publicly launched the Code of Practice for New Zealand Music Content on 26 March 2002;

4. note that on 12 June 2002, POL noted that the then Minister of Broadcasting and other interested Ministers had met with the Youth Radio Advisory Committee on 11 June 2002, and that the then Minister of Broadcasting was satisfied with the progress being made towards finalising a decision on providing radio services for young people [POL Min (02) 14/1 refers];

5. note that on 11 December 2002 POL deferred further consideration of the proposed expiry policy until further decisions have been made on radio services for young people [POL Min (02) 22/5 refers];

6. agree that it is appropriate for the issue of youth radio to be decoupled from expiry policy now, in light of the widespread economic impact of the latter and the disadvantages of ongoing delay in finalising expiry policy;

7. note that a timely decision on the policy for the reallocation of commercial spectrum rights on expiry is necessary to enable spectrum rightholders to plan and invest effectively and to provide sufficient time for the implementation of the policy;

8. agree that interim decisions on policy for the reallocation of commercial spectrum rights on expiry (as outlined in recommendation 2.1) be confirmed;

9. direct the Ministry of Economic Development, in consultation with the Treasury and other interested departments, to report back the Cabinet Policy Committee by 30 September 2003 with recommendations on the price-setting formulae referred to in recommendation 2.1.3, including how these are best implemented;

10. note that, in meeting the report back referred to in recommendation 9, officials plan to consult informally with existing rightholders;

11. authorise the Minister of Communications to announce the Government's decisions as outlined in recommendation 2.1 as soon as possible and to publicly release this paper; and

12. direct the Ministry of Economic Development, Te Puni Kōkiri and the Ministry for Culture and Heritage to report to the Cabinet Policy Committee by 30 September 2003 with policy proposals for dealing with non-commercial spectrum rights when they expire.