Broadcasting 002 - VHF TV Licences

VHF TV Licences

1. Policy 

New VHF TV licences will be allocated by public tender unless such licences are within the Low Value Licence criteria, or where such licences are required for the expansion of the existing free-to-air channels, TV1, TV2, or TV3.

2. Specific Criteria

Licences allocated directly to TV3 or TVNZ that exceed the Low Value Licence criteria will be made available for an assessed amount. This amount will be calculated as the product of:

• the average per capita tender value of comparable power UHF TV licences;
• the population coverage under the new licence;
• a scaling factor of three.

3. General

Any comparable power VHF TV licences that are allocated by tender in the future may also be included in the calculation, though the per capita value of these would be scaled by a factor of one rather than three. The closest approximation to a market value for VHF TV spectrum is the tender values of UHF TV licences. However VHF TV and UHF TV are not perfect substitutes since VHF TV transmitters are able to achieve equivalent coverage with less power, as well as other intangible considerations such as the possibility that fewer households are equipped with UHF TV aerials. The scalar of three was chosen because as a general approximation a 1000 kW Band IV/V transmitter equates to a 300 kW Band III transmitter; a ratio of 3.3.

4. Background

The Government has endorsed a policy which ensures that TV1, TV2 and TV3 expansion requirements will have first priority in the VHF TV bands. VHF TV licences will therefore be made available to other parties only where the frequency is not required for the expansion of these programmes.

In terms of equity with users in UHF TV and sound broadcasting, it is desirable that the market rate is charged for new licences allocated directly to TV3 or TVNZ. Given that the allocation mechanism is non-contestable however, some mechanism is required to determine a market value.

Approved By:

Manager
Radio Spectrum Policy.