Broadcasting in New Zealand

Communications Division
Ministry of Commerce
October 1996

Historically, most broadcasting services in New Zealand were provided by the Government. The Broadcasting Tribunal regulated entry into the commercial radio market until 1989. It was required to consider a wide range of economic, social and commercial issues in deciding whether to grant broadcasting rights.

The Broadcasting Corporation of New Zealand (BCNZ), a statutory corporation, exercised a monopoly in television services until 1987 when, pursuant to a Government Direction, the Broadcasting Tribunal completed hearings and authorised the establishment of a third television network, TV3, the first privately-owned network.

Since 1987 considerable changes have been introduced into the broadcasting industry. These changes were designed to increase efficiency in service delivery and to allow the broadcasting industry to capitalise on technological change.

In 1988, following an extensive review, the Government announced a broadcasting policy designed to meet four objectives:

• increased competition and flexibility in the broadcasting industry, to allow greater consumer choice and economic efficiency;
• a clear definition of the Government's social objectives, and the best means of meeting them;
• separation of social policy advice and regulatory functions from commercial activities; and
•  maintenance of acceptable programme standards.

Economic Efficiency and Consumer Choice

The Broadcasting Corporation of New Zealand Restructuring Act 1988 dissolved BCNZ and replaced it with two State-Owned Enterprises, Radio New Zealand (RNZ) and Television New Zealand Limited (TVNZ). Both are required by legislation to operate on a commercial footing with commercial objectives to encourage efficiency. The respective boards were asked to reflect New Zealand's identity and culture, and to encourage New Zealand programming within their mandate to operate in a commercial manner.

Other operations of the old BCNZ, the New Zealand Symphony Orchestra and Aotearoa Maori Radio, were established as independent organisations with transparent funding mechanisms. In order to prevent TVNZ from misusing its position as an owner of many key transmission sites and facilities, the Government required TVNZ to vest its transmission assets in a subsidiary company, Broadcast Communications Ltd (BCL). TVNZ's board provided assurances that BCL would be neutral in its dealings with private enterprise, other state-owned organisations and TVNZ's own broadcasting operations.

In 1996, the Government sold the commercial operations of Radio New Zealand to 'the New Zealand Radio Network Limited', a consortium including Wilson and Horton and GWR. The responsibility for providing National Radio, Concert FM and the broadcasting of Parliament continues to rest with Radio New Zealand, and the company remains accountable to shareholding Ministers for its performance.

Open entry: Economic restrictions were relaxed to provide open entry to the industry for new television and radio services. All special restrictions on overseas ownership of broadcasters were removed in 1991, allowing investment by overseas investors.

Access to new technologies: There are no longer restrictions on which technologies may be used to broadcast services. Broadcasters may use cable, microwave distributed services, and satellites as well as traditional broadcasting techniques to broadcast radio and television services.

Pay television services are also permitted. Sky Television currently offers five channels by subscription via a UHF signal. Kapiti Television established New Zealand's first cable television channel in Paraparaumu and has since become Saturn Communications, 100 per cent owned by US-based United International Holdings. Saturn's cable now passes 45,000 homes in the greater Wellington area. First Media, a subsidiary of Telecom New Zealand has now begun providing services in Auckland and Wellington. Other operators are also beginning to roll out services throughout the country.
 

Licences

The Radiocommunications Act 1989 provided a revised framework for spectrum allocation in order to cope with an increased demand for frequencies resulting from broadcasting and telecommunications reforms. It established a market-based system for spectrum management, with up to 20 year tradeable spectrum property rights. Such rights not only encourage investment in spectrum use, but also provide for situations where a number of uses are possible. This approach will encourage the spectrum to be used in whatever way is the most commercially valuable.

Broadcasters operating under warrants issued by the Broadcasting Tribunal on 1 July 1989, were entitled to a licence under the Radiocommunications Act. These licences were issued for a 20 year period in return for a one-off lump sum payment or an annual payment for each of the 20 years.

Most of the significant remaining UHF television, FM sound radio and AM sound radio frequencies have now been tendered by auction. The registration of licences following tendering establishes the tradeable right which is recorded in a publicly accessible register. An annual administration fee is payable to the Ministry of Commerce by all registered licence holders.

Additional licences are created, where technically possible, and tendered when there is demand for them. Amendments to licences, such as changes of transmission site, increases in power etc, are accommodated where possible. Where an amendment is likely to result in an estimated increase in the value of the licence in excess of $5,000 or other parties have expressed interest in the frequency, the licence is required to be re-tendered. The existing licence-holder has preferred bidder status in that they are given the opportunity to match the top bid if they choose to do so. Pending tender, licences are often made available for interim use for a rental that is related to the value of the licence.

Social Objectives

The Radiocommunications Act included special provisions for non-commercial broadcasters. Long-standing non-commercial broadcasters were guaranteed a 20 year right to continue broadcasting free of charge, other than an administration fee.

Special arrangements were made for Radio New Zealand's non-advertising funded National Radio, Concert Programme and AM Network services providing national programmes, and for access (or community) radio and the broadcast of the proceedings of Parliament.

In 1990, frequencies were reserved for non-commercial use in centres of population of 10,000 or more. Five additional frequencies were made available for temporary use by commercial or non-commercial broadcasters. In addition, many non-commercial broadcasters have purchased frequencies at tenders. A set of UHF television frequencies has also been reserved for non-commercial purposes.

More than twenty iwi radio stations are now broadcasting on frequencies reserved for the promotion of Maori language and culture. In addition, a Pacific Island radio station broadcasts on a reserved frequency in Auckland.
 

New Zealand On Air

The Broadcasting Act 1989 established the Broadcasting Commission, an independent body which operates under the name New Zealand On Air. New Zealand On Air's primary source of revenue is the Public Broadcasting Fee, currently set at $110. The functions of New Zealand On Air are:

• to reflect and develop New Zealand identity and culture (including the promotion of Maori language and culture) ;
• to maintain, where the Commission considers that it is appropriate, extend television and radio coverage to New Zealand communities that would not otherwise receive a commercially viable signal;
• to ensure that a range of programmes is available to provide for the interests of women, children, disabled people and other minorities (including ethnic minorities); and
• to encourage the establishment and operation of archives of programmes.

New Zealand On Air fulfills these functions by providing funds for broadcasting, production of programmes and archiving of programmes. When allocating funding for programme production, New Zealand On Air is required to take into account such factors as availability of other sources of funding; likely audience size, and the likelihood of a programme being broadcast.

The Broadcasting Act also provides guidelines for New Zealand On Air's funding of programmes to reflect New Zealand culture and identity. Specific provisions include requirements to consult with broadcasters, producers, Maori and consumer interests and cover funding of television drama and New Zealand music on radio. Ministerial directions are made under section 44 of the Act to reinforce and clarify these provisions.
 

Broadcasting Standards

The Broadcasting Act also ensures that acceptable public programme standards are maintained. It provides for a Broadcasting Standards Authority (BSA) to oversee and enforce the standards regime. Emphasis is on industry self-regulation and broadcasters are expected to develop their own codes and hear most complaints concerning breaches of the standards provisions of the Broadcasting Act. The BSA is responsible for encouraging broadcasters to develop and observe appropriate codes of broadcasting practice. It provides backup enforcement of the statutory duties imposed on broadcasters and hears complaints if people are dissatisfied with the outcome of complaints made to broadcasters, or an infringement of privacy is involved. The BSA has a wide range of sanctions which it may apply in order to ensure compliance with the standards regime.

Following a review of the BSA in 1991, the Government decided in principle to remove responsibility for most advertising standards matters from the BSA and place it with the established industry self-regulatory bodies, the Advertising Standards Authority Inc and the Advertising Standards Complaints Board, which are sponsored by broadcasters and advertisers. (The Broadcasting Amendment Act 1993 provides a regulatory basis for this transfer.)
 

Te Mangai Paho

The Broadcasting Amendment Act 1993 established a Maori broadcasting funding agency, Te Reo Whakapuaki Irirangi (known as 'Te Mangai Paho') which has now assumed responsibility for all funding for Maori broadcasting. Te Mangai Paho currently receives 14.1 per cent of net Public Broadcasting Fee revenue, and a direct payment from the Crown.
 

International Services

Radio New Zealand Ltd operates a short-wave service, targeted at the Pacific region and funded by the Ministry of External Relations and Trade.

TVNZ currently provides television services to Fiji, Niue and the Cook Islands and the Republic of Nauru.