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Certainty for commercial radio licence holders

Certainty for commercial radio licence holders

The Government has agreed on a policy covering the renewal of radio spectrum rightholders, Broadcasting Minister Steve Maharey and Communications Minister Paul Swain announced today.

The policy gives greater certainty of tenure for those making significant long term investments in New Zealand’s communications and broadcasting infrastructure. It provides for new rights to be allocated to existing rightholders five years before the expiry of present rights, on payment of a predetermined fee.

Steve Maharey said the policy has been developed following a period of consultation with industry and recognises that rights are fully tradable between parties at any time.

“Radio spectrum rights are used for telecommunication and broadcasting services such as cellular phones, television, sound broadcasting and general telecommunication purposes. They are initially allocated on a competitive basis, typically by auction, and last for periods of up to 20 years. The initial rights were allocated in 1990 and will expire in 2010. Other rights expire at later dates.

“The decisions the government has taken will mean that five years before a right is due to expire, the existing rightholder will be offered a replacement spectrum right at a price that reflects its current market value. The price will also ensure that the Government receives a fair financial return for the spectrum, which it administers on behalf of all New Zealanders. If the existing rightholder does not wish to renew on these terms, then the right will be able to be put up for public auction.

“The policy creates a presumption that new spectrum rights will be offered to the .incumbent rightholder, subject to a 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 spectrum to society as a whole,” Steve Maharey said.

. . / 2 Paul Swain said the next step is for the Government to consult with industry on the development of appropriate formulae for determining the price paid by rightholders on renewal.

“The first rights to expire will be UHF TV licences which expire in 2010. Now that the policy has been agreed broadcasters will be given the certainty they need to explore new and exciting areas, such as digital television. Ultimately, viewers will also benefit from the certainty that today’s announcement creates for broadcasters,” Paul Swain said.

The Government’s new policy does not apply to the renewal of non-commercial rights and those reserved for the promotion of the Maori language and culture. These rights are being considered separately and a Cabinet decision on this matter is expected later this year.

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