Radio Spectrum Auction 10 Frequently Asked Questions

If you wish to be advised by email of any changes to this FAQ, please send email to this effect to RadioSpectrum@MED.govt.nz

1. How long do the FM licences last?

The full commercial FM licences on offer will be renewed automatically on 3 April 2011, if in use, and expire on 2 April 2031. The Local FM (commercial and non-commercial) licences run for ten years from commencement.

2. What are the technical specifications of the licence, power, HRP etc?

The full commercial licences are in three parts, the period until 30 June 2008, during which the specification will be those currently recorded in SMART. After this date there may be some minor changes to the specifications for the period to 2 Apr 2011. With the beginning of a new management right on 03 April 2011, new specifications may apply. These new specifications are currently being finalised as part of a complex process to re-engineer all AM and FM frequencies sound broadcasting licences.

The Local FM licences are in two parts, the first until 02 Apr 2011 and then the second until expiry ten years after commencement. The above commentary also applies to the technical specifications of these licences.

Final specifications for the period 03-April-2011, expiring 03-April-2031, will be available on the Auction 10 web page and will be emailed to applicants, as early as possible and at least five working days before the Auction.

3. The eligibility criteria; clauses 7, 8 and 9 pertain to supplying evidence of financial capacity, broadcasting knowledge etc. Are all these details to be supplied with the application to register as a potential bidder by May 9 or are they supplied at a later date?

Evidence should be provided at the time of application for registration.

4. Are the transmit sites e.g. Hawkes Bay at Mt Erin, the only sites you are allowed to transmit from if your bid at auction is successful, or you can set up your own aerial(s) elsewhere in the reach area?

The licences are engineered specifically for the location, power and other specifications that define the licence. Successful bidders may use the Ministry’s standard licence variation process (details here) to change the site, but this will require additional engineering and be allowed only when interference issues do not arise.

The successful bidder is responsible for obtaining access to the site defined on the licence. If access is not available, whatever the reason, the successful bidder will need to apply the standard licence variation process outlined above.

In relation to specific sites, the Marlborough District Council have advised the Ministry as follows: “Marlborough District Council has strict rules governing the use of [Wither Hills] for RF Broadcasting and as such no guarantee is given to [MED] that transmitting from this site is possible or likely beyond current terms"

5. What is the Auction format?

The Auction will be conducted in an open outcry format at premises in Wellington with the option of telephone bidding. There will be small reserves on all lots to recover administrative expenses. The hammer price includes GST and is the price. There is no Buyer’s Premium to be paid. The order of lots is the same as that listed on the Auction 10 web page, except that the non-commercial FM licences will not be auctioned.

6. What is the date of the Auction?

Auction 10 is planned to take place on the Thursday 22 May 2008 with the following schedule:

Registered bidders are advised to note that if their nominated bidding telephone number is engaged when called, only a limited number of retries will be made.

7. Can existing licence holders bid at the Auction?

Only on condition that they relinquish all other licences held if they acquire a local FM licence. The Statutory Declaration required for registration has been amended to include the following option:

Thus, if an applicant for registration would otherwise be disqualified under the eligibility criteria, it can attest that it will take the required steps to become compliant if any local commercial (or non-commercial) FM radio broadcasting licence is acquired. This must occur before transfer and registration of the licence.

8. What happens at the end of 10 years for Local FM Licences? Does the holder have a right of renewal?

It is current government policy that spectrum rights in use are offered for renewal five years before expiry at their estimated market value.

Local commercial FM licences, however, are a new category of rights, specifically targeted at the enhancement of regional and community broadcasting. Government will review the success of this policy, therefore, before committing to any renewal offers.

As a general principle, though, a broadcaster who has made a substantial operational investment and who is clearly meeting the terms of a licence agreement is unlikely to be denied the opportunity to renew.

9. What is an outcry auction and how does it work?

An outcry or 'English' auction has the following format.

• The first lot is offered
• The auctioneer calls for an opening bid
• Bidding continues until there are no further bids
• The lot is sold at the highest bid received
• The next lot is offered
• The bidding continues until all lots are sold
• Payment must be made to the auctioneer within ten working days

Auction 10 will be managed by Dunbar Sloane of Wellington.

Bidders may attend the auction in person or submit bids by telephone. Telephone bidders must be registered, so that the auctioneers know who to contact at the time of the auction. If telephone bidders cannot be contacted at the time of the auction they will, of course, be unable to bid.

Bidders for unrestricted commercial licences do not have to be registered if they attend the auction in person.

Bidders for local commercial FM licences must be registered, whether or not they attend the auction, as they are also required to meet eligibility conditions.

Payments should be made to Dunbar Sloane. Payments will not be accepted by MED.