Discussion Paper

VHF-FM Broadcasting: Frequency Availability and Allocation September 2005

First published in September 2005 by the Radio Spectrum Policy and Planning Group Resources and Networks Branch Ministry of Economic Development PO Box 1473, Wellington, New Zealand
http://www.med.govt.nz

ISBN 0-478-28449-7

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Contents
INTRODUCTION .............................................................................................................. 3 AVAILABILITY OF LICENCES ............................................................................................ 5 Background........................................................................................................... 5 Technical Standards ............................................................................................. 5 Coverage Extension and Coverage Infill Techniques ........................................... 9 Frequency Limits................................................................................................. 12 Estimated New Licence Availability..................................................................... 13 ALLOCATION OF LICENCES ........................................................................................... 15 Present Position.................................................................................................. 15 Broadcasting Objectives ..................................................................................... 16 Reservations for National Networks.................................................................... 16 Local Area Broadcasting..................................................................................... 17 Balancing the Interests ....................................................................................... 19 SUMMARY OF PROPOSALS ........................................................................................... 21 SUBMISSIONS .............................................................................................................. 22 Invitation for Submissions ................................................................................... 22 Official Information 1982 ..................................................................................... 22 Privacy Act 1993 ................................................................................................. 22

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Introduction
1. VHF-FM broadcasting commenced in New Zealand in the early 1980s in the frequency range 89-93 MHz. With the progressive clearance of other services the frequency range used now covers 88-108 MHz. Small segments at the upper and lower edge are used for low power services under a general user licence, with the remainder of the band used for individually licensed services. The band above 100 MHz has some capacity for more services, but further use is subject to a three year moratorium that is to be reviewed in 2006. The technical standards presently used are largely those adopted in the early 1980s, and are sourced from the International Telecommunication Union (ITU-R). Recent work suggests that new planning parameters can be adopted to increase the availability of licences. In addition, changes to the lower frequency limit of the overall band from 88 MHz to 87.5 MHz could be possible. The increase in licence availability through potential removal of the moratorium and new technical standards requires decisions on any further provision of spectrum to meet wider broadcasting policy objectives, prior to any general commercial allocation. The new licences envisaged are in addition to present government reservations for the four priority programmes. In particular this paper raises the issues of potential broadcasters who seek to broadcast only in a local area, or to a niche market, but are unable to fund the acquisition costs of a commercial licence. This issue was identified in the recent Review of Radio Spectrum Policy in New Zealand (http://www.med.govt.nz/rsm/spp/review/). If this so called middle tier of broadcasting was assisted in some way, they may add diversity to broadcasting markets that assist in fulfilling the governments wider broadcasting objectives (refer to paragraph 56 of this paper) and assist in progressing the Government Programme of Action (http://www.mch.govt.nz/publications/public-broadcasting/). The purpose of this paper is to seek public feedback on proposals relating to VHFFM broadcasting that: adopt new technical standards with narrower frequency separations for future use in the FM band; and progressively move to a slightly lower frequency limit at the edge of the band; and enhance low power FM broadcasting through changes to the General Licence; and facilitate the wider use of synchronous technology for coverage extension and infill purposes; and

2.

3.

4.

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create new FM licences throughout the country, largely in the band above 100 MHz after the removal of the present moratorium, for use by: a future non-commercial not for profit network (or an equivalent use in each local area); and local broadcasting (two licences in each area), with restrictions on acquisition to facilitate new entrants; and commercial broadcasting (two licences in each area), allocated with no special acquisition restrictions.

5.

The feedback will be used to inform final Government decisions about both frequency availability through technical standards and allocation of future licences through reservations or competitive auctions. Details about how to make a submission are provided at the end of the document. As a discussion document this paper does not represent formal Government policy and should not be relied upon by parties in making or considering commercial or other decisions. The Government reserves the right to add, delete, amend or replace any of the content of this document.

6.

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Availability of Licences
Background
7. The FM band used in New Zealand lies between 88 MHz and 108 MHz. This is broadly consistent with the band utilised by other countries, although there is some minor variation between countries in the lower frequency limit. This broad consistency ensures that a wide choice of equipment is available in New Zealand from world markets. The notable exception is Japan (along with China, Korea and the Philippines) who utilise a narrower band from 76-90 MHz for domestic broadcasting. Radios designed for those markets are not, in themselves, suitable for use in New Zealand. The lower edge (88-89 MHz) of the band in New Zealand is currently being used to provide low power broadcasting services under a General Licence. Frequencies below 88 MHz are used by Land Mobile services, although the intensity of use has diminished over the years as new communication technologies (cellular, trunked radio etc) emerge. The upper edge (107-108 MHz) is also used for low power services. In the main portion of the band (89-107 MHz) a range of services are provided through location specific spectrum licences managed and granted by the Crown under the Radiocommunications Act 1989.

8.

Technical Standards
9. The number of licences technically available in any area is governed by the planning standards adopted. These standards need to recognise the practical performance of both transmission equipment and receivers. Initial services were implemented with a frequency separation of 1.6 MHz, primarily to allow lower cost transmitter combining equipment at main transmission sites. The present standard is a frequency separation of 0.8 MHz, although separations of 0.6 MHz have been used in some circumstances.

10. Investigations and field trials have shown that with appropriate technical parameters it is possible to operate licences with a frequency separation of 0.4 MHz. Two trials have occurred, one with co-sited transmitters at Skytower in Auckland, and one in Wellington using different sites with partly overlapping coverage. These trials were commenced on the expectations that, provided they were considered successful (i.e. that reception was satisfactory and that protection of other licences could be achieved), long term licences would be considered by the Ministry under existing policies. These trials have not led to any significant issues being raised by listeners and therefore the question of the acceptance of narrower frequency separations needs to be considered more widely. This will also assist in resolving the future of the specific trial licences. The wider planning issues are discussed in the following sections of this document.

Receiver Selectivity
11. The primary issue is whether typical receivers have adequate selectivity to discriminate the wanted signal from the unwanted signal. ITU-R criteria Discussion Document For Consultation
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(Recommendation BS412-9) suggest that this can be adequately achieved at 270 kHz separation if the signal levels are always exactly equal. At 400 kHz the unwanted signal should be no more than 20 dB stronger than the wanted signal.
Frequency Separation 0 (co-channel) Protection ratio BS 412 Figure 1 45 dB (Stereo) 36 dB (Mono) 270 kHz 400 kHz 800 kHz 0 dB (S or M) -20 dB (S or M) -40 (S or M) Comment

Wanted must be 45 dB stronger than unwanted signal for stereo reception Wanted and unwanted signals may be equal Unwanted can be 20 dB stronger than wanted signal Unwanted can be 40 dB stronger than wanted signal

Assuming single, steady state interference

Separation is beyond range of Figure 1. Value is derived from Annex 2.

12. The relative signal strength values refer to the signals present at the receiver and therefore the transmitter sites used and power levels would need to be selected to achieve these values in the majority of the common coverage area. This generally requires transmitters with a 400 kHz frequency separation to use the same transmission site (be co-sited) and to have similar transmitter powers. To allow for potential different transmitting antenna (with likely differences in radiation patterns and polarisations), and marginal differences in propagation to the receiver, a maximum licensed power difference of 10 dB is considered appropriate. 13. The ITU-R Recommendations caution against excessive modulation of transmitters and that the protection ratios specified are based on the normal bandwidth of transmitted signals. This may be relevant because there has been a tendency for some licensees in New Zealand to operate the transmitter deviation at the maximum permitted, and sometimes beyond that limit, in order to make the resulting signal sound louder. 14. The ITU-R criteria also warn against using transmitters with a frequency separation of 10.7 MHz (plus/minus 0.2 MHz) in a common coverage area. This is understood to relate to potential mixing of incoming signals in receivers (RF or mixer stages) and creating of a potential interference signal at 10.7 MHz in the IF stages. It seems likely that this relationship and mixing would, if present, affect reception of any FM signal in the coverage area, irrespective of the actual FM signal being received. The trials in Auckland involve a 10.8 MHz separation (93.8 and 104.6 MHz) and to date no reports of adverse effects from this issue have been reported. This suggests that, provided reasonably comparable signal levels are used (i.e. there are not situations where a weak signal is being received in the presence of a strong overloading signal), the use of a 10.8 MHz separation will not be a source of difficulty. It would be prudent to avoid an exact 10.7 MHz relationship however. Discussion Document For Consultation
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Transmit Antenna and Combining Costs

15. Use of a narrower separation at a particular site would require either a separate transmission antenna or a more costly combining system. These costs are likely to vary from site to site but in some cases these may be significant. In such cases a licence may be not desired by potential broadcasters because of the cost of implementation, or may attract a relatively low value if allocated competitively. There may also be pressure to permit a non-cosited, narrow separation, licence to avoid higher transmit antenna costs. However the cost of antenna/combining infrastructure may be able to be shared across several new services. 16. Whatever the actual level of costs that might be incurred at a given site, they are an issue that will need to be considered by intending broadcasters in setting their budgets. This would apply equally for commercial parties and groups seeking government funding in some way. This factor is not seen as a matter that should prevent an otherwise available licence from being considered for allocation.

Receiver Tuning
17. Some radio receivers, typically bedside or portable models, are difficult to tune when stations are close together on the dial. This is especially true if the receiver is overloaded by strong transmissions from nearby transmitters. Analogue models will always require careful tuning when there are a large number of signals present. Anecdotal comments suggest that cheaper priced receivers have poorer performance including greater difficulty in accurate tuning. There are no standards for ease of tuning of receivers, but consumers do have a wide choice of radio receivers to purchase. Statistics on the numbers of radio receivers used in New Zealand, and any information on the ease of tuning, are not available, but it is likely that there is a greater, and growing, proportion of digitally tuned models in use. It is not proposed to limit the availability of licences based on what are largely subjective performance factors of receivers such as the ease of tuning on particular models of receivers.

Future Flexibility
18. The use of a 0.4 MHz separation may limit the practicality of adding new subcarrier type services in future. These may include digital modulations in addition to, or instead of, existing modulations. Whilst digital systems, for example the IBOC system available in the United States, are generally designed to be compatible with existing services, these services can sometimes use a wider bandwidth that permitted under present licences. The nature of potential other new technologies are not known, and whilst some may be able to be accommodated by adjustment of the relative levels of the main signal and any sub-carrier, others may not be as easily accommodated. The basic question remains as to whether to favour increased numbers of new broadcasting services immediately or to favour maintaining future flexibility to better accommodate potential future technologies. 19. It is noted that despite the availability of suitable technology for sub-carrier use, here has been little demand for this in New Zealand although Radio New Zealand Discussion Document For Consultation
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and others have recently introduced the Radio Data Service (RDS) technology to provide programme identification and receiver re-tuning facilities for suitably equipped receivers. 20. Given that future technologies and their market acceptance are not known, and the necessary technical parameters are similarly unknown, it is proposed to base any new licences on technical parameters that accommodate the standard VHFFM transmission, including an allowance for RDS technology. It is always possible for licence holders to commercially negotiate licence purchases/changes to accommodate pressing needs should they arise in the future.

Receivers in Imported Vehicles

21. The Ministry is aware that a number of radio receivers in vehicles imported from Japan have been fitted with so called band expanders to allow reception of the FM band used in New Zealand. These expanders typically use a shift frequency of 10 MHz or 12 MHz and this arrangement can cause reception difficulties to specific services when another service operates with a frequency separated by the shift frequency used in that particular expander (refer http://www.med.govt.nz/rsm/publications/pibs/band-expander.html). 22. With the normal frequency separation of 0.8 MHz between licences in any area, this reception degradation only occurs with expanders using a 12 MHz shift frequency1. The use of 0.4 MHz separation between licences extends the potential for this type of reception difficulty to include those using expanders with a 10 MHz shift frequency2. Whilst the Ministry is aware of this issue, it is seen as one that relates to the type of receiving equipment used by the individual listener and only occurs under particular circumstances. There has been recent legal action on this matter and further clarification is being sought from the Courts. The Ministry does not consider it is a matter that should be taken into account in the licensing and certification of licences under the Radiocommunications Act.
Proposal A - The Ministry seeks comments on adopting a policy of permitting co-sited transmitters with a frequency separation of 0.4 MHz, providing that the licensed eirp of such transmitters are within 10 dB of each other. Existing planning standards for determining compatibility with licences in adjacent areas would also apply.

A rhythmical frequency separation of 0.8 MHz between transmitters in an area will give several pairs of licences with an exact 12 MHz frequency separation (for example 90 MHz plus (15 x 0.8 MHz) =102 MHz). The design of the expander means that services licensed on 90 MHz and 102 MHz cannot be properly received when using an expander with a 12 MHz shift frequency as the original Japanese receiver cannot discriminate between these signals after they are processed by the expander. A rhythmical frequency separation of 0.4 MHz between transmitters in an area will give several pairs of licences with an exact 10 MHz frequency separation (for example 90 MHz plus (25 x 0.4 MHz) =100 MHz).
2

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Coverage Extension and Coverage Infill Techniques

Coverage Extension through Synchronous Services
23. Providing a network coverage over wider areas requires use of several sites, and this has generally required a transmitter on a different frequency at each site concerned. Listeners are required to tune to the appropriate frequency in the area concerned, although some stations now use the Radio Data Service (RDS) so that listeners with suitably equipped receivers can have the receiver automatically change to the strongest signal in any given area. An alternative technique using transmitters on the same frequency from two or more sites providing overlapping coverage is also possible. The transmitters operate on a synchronous basis, with carefully controlled linking arrangements to ensure that the signals reinforce each other in receivers. 24. Transmitters in a synchronous network must transmit the same programme and necessarily require frequencies to be used which are different to the normal and preferred frequency sequence at a site. Under present planning standards the preferred 0.8 MHz raster at a site would normally be offset by a few hundred kHz from the raster at adjacent sites. For example, Site A might use 90, 90.8, 91.6 MHz etc, site B might use 90.2, 91, 91.8 MHz, and site C might use 90.4, 91.2, 92 MHz etc. A synchronous system would require the same frequency at each site, say 91 MHz in this example, which gives a frequency separation narrower that 0.8 MHz between licences at both sites A and C. 25. Synchronous systems have generally been limited in nature in the past and considered by the Ministry on a case by case basis, but are now being sought for much wider coverage areas. This wider use raises two main issues: a technical compatibility issue of frequency separation, and a policy issue concerning the noncompetitive allocation of licences. 26. The technical issues for any given proposal will depend on the services licensed in any given area, and will need to be considered individually. If frequency separations of 0.4 MHz are agreed as discussed earlier in this paper, there will be a greater scope for synchronous services to be implemented. Synchronous services are also likely to require various frequency changes to existing services to be negotiated and agreed between the parties concerned. 27. The policy issue is that new licences for commercial purposes are presently generally only provided on a contestable basis, typically by auction. Allocating a licence for a synchronous extension through auction is both difficult and not likely to result in any new entrant. The close technical interaction of a synchronous extension licence and an existing licence means that the two licences cannot effectively be used separately. Indeed, the extension licence cannot be created and certified unless specified as being designed for synchronous use. 28. A synchronous network could conceivably be created, by a licensee with a single licence in say Wellington, to extend to Kapiti, Wairarapa, the Manawatu and beyond subject only to technical compatibility issues. This could give that licensee a significant competitive advantage over another operator wishing to use the same Discussion Document For Consultation
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sites on a normal non-synchronous basis who would be required to purchase the necessary licences at auction. 29. The Ministry wishes to encourage innovations and efficient spectrum utilisation by techniques such as synchronous use, but also wishes to encourage new entrants and provide a fair basis for extended coverage to occur. There is a tension between these objectives and therefore the Ministry needs to balance them appropriately. 30. It is therefore proposed that applications for synchronous systems be considered on the basis that: they can be demonstrated to be technically compatible with other licences or proposed changes to other licences negotiated by the applicant (this may require the Ministry to agree to relocate an existing licence to a new frequency well away from the existing frequency); they facilitate the availability of (or at least do not preclude) other licences in the area, suitable for contestable allocation in due course (this recognises that separations of 0.4 MHz and frequency changes to facilitate synchronous use may provide opportunities for new licences); they demonstrate to the satisfaction of the Ministry how the requirements of s.138 of the Radiocommunications Act are met (the Ministry may require a formal application for clearance to the Commerce Commission); resource charges for increased population coverage are paid under present policy criteria as if each licence operated on a stand alone basis.

Proposal B - The Ministry seeks comments on the proposed criteria for use of synchronous systems and in particular on the competitive aspects of allocating licences for synchronous use without a contestable allocation process.

Coverage Infill Techniques

31. The topography of some areas is such that a transmitter providing infill coverage from an additional site is often desired. This requirement is greatest in the Wellington area where many stations have an infill transmitter (typically a translator). In most cases these transmitters have used an additional frequency, thereby reducing the number of frequencies available for use at the main station and the overall availability of programmes that can be provided on the FM band. This situation is distinct from a coverage extension, in that the infill area is largely within the coverage area of the main station. 32. Two techniques have recently been utilised, use of a 0.4 MHz frequency separation between infill station and the main station, and use of co-frequency synchronous systems. The sites used for the 0.4 MHz separation trial (main station at Kaukau and infill site at Towai) have some degree of coverage overlap, and this is therefore a potentially more demanding test of receivers than co-sited services separated by 0.4 MHz. The power used from the main station was Discussion Document For Consultation
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somewhat less that used for a wide area licence, but was still adequate to cover the Wellington urban area. It is noted that the first FM licences in Wellington (at the Kaukau site) used powers of up to 47 dBW and coverage was anticipated in Kapiti, and parts of Marlborough. Over time these more distant areas have developed local transmission arrangements and are less dependant on Wellington based transmitters. A lower power from Kaukau of around 35 dBW still gives an adequate local Wellington coverage. 33. The trial use of a frequency separation of 0.4 MHz between licences at the Kaukau and Towai sites, given the specific topography and location of populated or generally accessible areas, has proved satisfactory with the powers used. It is therefore considered that it should be adopted as a normal arrangement. 34. Other FM services have provided coverage infill in Wellington through synchronous systems. These use two or more transmitters on the same frequency with carefully controlled frequency and modulation parameters. These have also been proven satisfactory in the Wellington environment. 35. It is therefore proposed that further FM licences in Wellington be planned on the basis of either: wide area coverage and power (47 dBW) without infill coverage; or metropolitan area coverage and power (35 dBW) with an infill capability using a 0.4 MHz frequency separation; or synchronous single-frequency systems.

36. This type of planning would also be considered on a case by case basis in other areas where infill coverage requirements are sought. 37. This proposal would improve overall availability of services in Wellington, but would require careful planning together with some limits on the flexibility that licensees presently have in how licences might be utilised. The costs to implement a synchronous system would be higher than for a simple translator, but mobile listeners would not require to tune between two frequencies for complete coverage. These additional costs may pose funding issues for non-commercial broadcasters, and require increased commercial viability for other licensees. In due course these standards would also be used as licence re-arrangements and changes were sought to the existing licences in the Wellington area. The same concepts would also be applied in other locations, should they be proved to be feasible.
Proposal C - The Ministry seeks comments on the provision of infill coverage through licences separated by 400 kHz from the main coverage service, or synchronous systems, initially in Wellington but later in other centres following technical proving.

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Frequency Limits
38. The frequency band allocated to the Broadcasting Service in the ITU Radio Regulations commences at 87 MHz in Region 3 (Asia Pacific including New Zealand). Region 1 (Europe) has a limit at 87.5 MHz whilst Region 2 (Americas) have an ITU allocation limit of 76 MHz, but in practice utilises an 88 MHz limit. Receiving equipment is however generally designed for to meet the requirements of Europe (ITU Region 1) which has an allocation commencing at 87.5 MHz. New Zealand presently uses a band limit of 88 MHz, with low power (0.5 Watts eirp) being licensed on frequencies up to 88.7 MHz (refer http://www.med.govt.nz/rsm/licensing/gurls/gurl-lpfmbc-2.html) and individual high power licences being used above 88 MHz3. 39. The spectrum below 88 MHz is used by Land Mobile services which provide twoway communications to vehicle fleets such as taxis, couriers. This use has diminished over recent years and is expected to diminish further in future years. The wide use of FM broadcast receivers that which are designed to receive frequencies from 87.5 MHz suggests that in time the highest value use of the frequency range 87.5-88 MHz will be for some form of FM broadcasting use. 40. The spectrum above the present upper limit of 108 MHz is used by aeronautical services, but even if this limit could be reviewed there is virtually no receiving equipment designed to receive FM broadcasts on frequencies above 108 MHz.
Proposal D - The Ministry seeks comments on the proposal to plan and implement VHF-FM broadcasting services between 87.5 MHz and 88 MHz. This would require the present Land Mobile use to be compressed into the band below 87.5 MHz. If the proposal is adopted, what time frame should apply to the transition?

41. It is also considered possible to contemplate a slightly higher power for the low power broadcasting used at this band edge. The power limit is designed to protect against interference to the sensitive Land Mobile base receivers which are typically located on hilltop locations some kilometres away from the urban areas where low power FM services are generally located. There has been little evidence of incompatibility between LPFM and land mobile at present power levels and a modest power increase is not expected to change this, especially if such use was constrained to say 0.5 MHz away from the band edge. 42. Land mobile base receivers should be able to tolerate off frequency signal levels comparable to those created by mobile transmitters operating within their frequency band. This suggests that an eirp of around 5 watts could be used on specific frequencies in the low power band edges4. However this is not
3

A specific exception to this is a high power licence on 88.6 MHz in Auckland (Skytower) with a corresponding exclusion of low power broadcasting from this area.
4

Existing LPFM is limited to 0.5 Watts (-3 dBW). A FM transmit power of 5 watts (7 dBW or 37 dBm) is 10 dB greater. At this level, a free space loss of 75 dB (~2 km distance separation) would give power levels around -40 dBm at a land mobile installation. This is some 70 dB above expected typical minimum base receiver sensitivities, and therefore around the maximum expected to be tolerable.

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considered practical at the upper band edge because of the high protection requirement for the aeronautical services. 43. If the allowable power is to be increased, there might also be benefits in changing the method of specification of the power of LPFM services. The power is presently specified as a radiated power (e.i.r.p.), which requires knowledge of the antenna gain and feeder loss to set the transmitter power. An alternative could be to specify a transmitter power, and recognise that a typical dipole antenna gain and feeder losses will probably only increase this by only 1 to 2 dB. A sophisticated installation might add perhaps 6 to 10 dB in one direction, with a corresponding decrease in other directions. The alternative approach is likely to be easier for operators to ensure compliance, but is perhaps more difficult for enforcement purposes as access to premises is required for measurement. In any event a LPFM operator would still be required to avoid creating interference and may need to use a power level lower than the maximum as at present. 44. The exact arrangements in the lower band edge would need to recognise that the Land Mobile service will continue using this spectrum for some time. A prohibition on new Land Mobile licensing and eventual use by low power broadcasting is envisaged. For the purposes of this discussion paper use of 87.5-88.4 is envisaged as low power use with perhaps 88-88.4 MHz being licences at a maximum power of 5 watts. The 87.5-88 MHz portion closer to the Land Mobile services would retain a power limit of 0.5 watts. Above 88.4 MHz would be utilised for normal individually licensed high power use. 45. Changes of this type would cause disruption to Land Mobile services and to some existing LPFM users, but are seen as a better overall use of the spectrum.
Proposal E - Comments are sought on the proposal to allow a greater power for low power FM broadcasters under the general licence in the 88.0 MHz to 88.4 MHz range. Is an eirp limit of 5 watts suitable? Should the method of measurement be changed to specify, say, 5 watts at the transmitter output and allow any antenna to be used?

Estimated New Licence Availability

46. An initial evaluation has been undertaken of new licence availability in the lower portion of the band (i.e. below 100 MHz) through use of revised planning standards, particularly allowing a separation of 0.4 MHz. This shows that there are not large numbers of licences in most areas, because the current planning uses a geographic and frequency offset approach to maximise availability. For example, a new licence spaced at 400 kHz at Auckland (Skytower) will generally be on exactly the same frequency as an existing wide area coverage licence in the Waikato. This limits the power of a licence at Auckland (or in Waikato), often to the extent that it falls outside the power difference considered satisfactory. Creation and technical certification of a new wide coverage licence in either area may therefore not be immediately possible.

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47. Additional licences would be possible through the use of revised technical standards, the lifting of the present moratorium in the band above 100 MHz, and eventual changes to use a lower frequency limit of 87.5 MHz. There are fewer pre-existing constraints in the spectrum above 100 MHz and therefore more licences could be created. However the licences would not all be able to have the expansive coverage often obtained from high power use at high sites. For example to ensure compatibility with Auckland use, a licence in the Waikato would perhaps need to focus on Hamilton from a suitable transmission site, but not use the high Te Aroha site. Detailed planning would be necessary to determine the optimum outcomes. 48. There may also be some scope for increased coverage by re-siting or up-powering existing licences with case by case negotiations between licensees, but these would not generally be available for allocation by the Ministry. However the majority of new licences are anticipated from use of the new standards in the upper portion of the band, presupposing that the moratorium is lifted. 49. With use of new technical standards in the band above 100 MHz there could be four to six new licences in Auckland, and a similar or potentially slightly greater number of licences in most centres throughout New Zealand. Some of these licences would need to be targeted towards urban centres, rather than being wide area licences. This level of licence availability was not anticipated in the previous discussion paper in 2001.

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Allocation of Licences
Present Position
50. Given the potential availability of additional licences, it is useful to review the present allocations prior to postulating how additional licences might be allocated. Approximately one third of the lower portion (89-100 MHz) of the FM band is currently reserved or used for non-commercial licences. These are used to provide services such as National Radio, Concert FM, access radio, community radio and Mori radio. The remainder of this portion of the band has been licensed for commercial purposes. A few non-commercial reservations, mainly giving coverage of less populated areas, remain unused. 51. The upper portion (100-107 MHz) of the band is generally used or reserved for the Governments priority networks (National Radio, Pacific Island Radio, Youth Radio, and a National Mori Radio service). The first two of these programmes have been implemented in many areas over the last few years. In addition to these priority networks, an access radio service and two commercial radio services are licensed at Auckland, and an access radio station is licensed at Kapiti. The remaining capacity in the 100-107 MHz band has been subject to a three year licensing moratorium since 2003. 52. The Government provides direct funding for Radio New Zealand, and other services such as National Pacific Radio. Funds are also provided to NZ On Air and Te Mngai Pho (TMP) for funding of access radio, Iwi radio, and other services meeting the relevant policy criteria. 53. The primary objective of the Crown in managing the spectrum is to maximise the value of the resource to society. In the past, the Crown has achieved this by ensuring that licences are available for a range of broadcasting services, whether they have commercial or non-commercial objectives. Commercial licence holders have generally purchased licences through auctions or in secondary markets for the purpose of providing broadcasting services for profit. The Government recognises that not for profit services provide benefits to society and therefore has reserved and allocated licences for particular uses. 54. This paper is concerned with the allocation of FM licences for new broadcasting purposes, either commercial or non-commercial. It does not consider whether the purpose of any particular existing AM licences or reservations should be reallocated to the FM band. The underlying assumption is that both MF-AM and VHF-FM technologies will be suitable for broadcasting purposes for the foreseeable future. 55. It is anticipated that Government could wish to make decisions on the issues in this discussion paper in the early months of 2006, and that licences could subsequently be allocated later in 2006. It is recognised that, at present, all licences including any new allocations, would necessarily expire in April 2011. Government has announced policies that allow renewal, for a further 20 years, of commercially allocated licences and renewal offers are anticipated in April 2006, some five years before expiry of present licences in 2011. Existing nonDiscussion Document For Consultation
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commercial licences and unused reservations will also be reviewed before their expiry in 2011. This paper does not prejudge whether any particular licence will or will not eventually be renewed, but allows for a renewal to occur should that be appropriate. This paper assumes that any new licences could potentially be allocated for any period up to a maximum period until 2031, being 20 years beyond the present expiry in 2011.

Broadcasting Objectives
56. The Governments high level objectives (announced July 2000) are that the following would be used to guide the development of broadcasting policies to ensure that desired kinds of broadcast content are available to the New Zealand public: ensure all New Zealanders have reasonable and regular access to broadcasting representing the uniqueness and diversity of New Zealand life, recognising that the histories and stories of whnau, hap and iwi are integral to any description of that life; meeting the information and entertainment needs of as many interests as reasonable possible, including those that cannot be met by commercial broadcasting; contributing to public awareness of and participation in the political and social debates of the day; providing for minority interests and increased choice; and encouraging innovation and creativity in broadcasting while aiming to continually increase audience satisfaction with the quality of the content.

57. As identified above, these objectives are presently achieved through a mix of purely commercial services, government supported public broadcasters, Iwi broadcasters, and a number of local services such as student radio, access radio etc. There is little doubt that further commercial licences could be allocated immediately, but consistent with overall broadcasting policy it is necessary to also consider other potential broadcasting requirements, eg programmes potentially provided through community and other not for profit services.

Reservations for National Networks

58. Reservations were made in 2003 for sets of FM frequencies to enable a given type of service throughout much of New Zealand. The extent of each reservation has depended on the agreed population coverage expectations. There are two sets of reservations partly utilised (National FM, and National Pacific Radio) and it would be expected that these services will be progressively extended to achieve their coverage expectations using the existing reserved frequencies. A further two sets remain reserved for services not yet implemented (Youth Radio and National Mori Radio). Whether, when, and how these latter reservations will be utilised is a matter for further government policy development which is outside the scope of Discussion Document For Consultation
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this paper. The new licences envisaged in this paper are in addition to these earlier reservations. 59. Whilst there are no proposals for review of the existing unused reservations at this stage, the technical proposals for the Wellington area in this paper would allow a review of the actual frequencies needed to achieve the coverage objectives. This would assist in increasing the availability of new licences in areas where infill coverage has been planned for the present priority reservations. 60. However Government does wish to be aware of what new national or near national services might be desired that are anticipated to operate on a not for profit basis. This would assist in making decisions on whether further national frequency reservations, or reuse of the existing reservations that are not yet utilised, are necessary to assist in meeting broadcasting objectives. If new purposes are proposed, it would be necessary to have a clear understanding of how such a service might be structured and funded, and when implementation was likely, before final decisions on frequency reservations. 61. It could also be possible to use a near national reservation for a particular purpose with different operators in specific areas. For example frequencies could be reserved for educational institutions (as distinct from student radio and broadcasting school courses) to enable educational material to be broadcast. Only a handful of colleges/schools have operated licences in the past but if such reservations were to be considered on a near national basis there would need to be clear understandings about how these services might be structured and funded.
Proposal F - Comments are sought on the proposal to reserve a further set of licences (in addition to the present reservations) for a non-commercial or non for profit network. What programming purposes would be best broadcast on such a network (or equivalent individual area licences)? Who should manage such a service, how would it be funded and when could or should it be implemented?

Local Area Broadcasting

62. Local broadcasting is presently facilitated through low power broadcasting, and a few frequency reservations/licences in particular areas. There are no licences provided specifically for local broadcasting, but some commercial licence holders do provide a mix of network and local programming to serve their audience needs. There are, however, potential broadcasters who periodically seek new licences in specific local areas. Over the years there has been interest in proposals for radio reading services for the visually impaired, rebroadcasts of BBC programming, locally owned and programmed services, and community specific proposals, such as local radio services for the Pacific communities and Asian communities. 63. It is necessary to consider whether a greater number of local area licences would result in programming that assists in meeting governments overall objectives, and if so how might such licences be allocated and managed so that the intended benefits are maintained over time. Unless a process of ongoing management is Discussion Document For Consultation
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provided, there is a risk that both the intended benefits, and the opportunity costs of an alternative commercial allocation, would be lost. 64. There has been growing interest by aspirant broadcasters over past years in a type of service that might be seen as falling between those provided by fully commercial broadcasting and public broadcasters. Such aspirant broadcasters might seek to target an ethnic community, or an interest or demographic target across a wide area, or just seek to broadcast to the local community. This issue was identified in a recent review of radio spectrum policy (refer http://www.med.govt.nz/rsm/spp/review/) but as yet has not been the subject of specific policy proposals. These needs have been addressed, at least in part, since the early 1990s through Access radio services where a variety of community groups provide programming to a single time shared transmitter. Increasingly some of these programme makers, along with other parties who might offer similar targeted programming, are looking to the ability to operate on a full time basis. They have generally not been able to acquire licences in contestable auctions, given they lack the resources of the major commercial broadcasting networks (CanWest, TRN, Rhema). However such new entrants may well be likely to add to meeting governments overall broadcasting objectives. 65. If this so called middle tier of potential broadcasters is to be facilitated, it is necessary to determine the extent that frequencies should be provided, and how such might be allocated to the likely wide range of applicants. In general licences would need to be in the upper part of the FM band, and in some areas would need to use a narrow frequency separation of 0.4 MHz as discussed earlier in this paper. For an optimum technical planning outcome any middle tier licences should generally be operated from the same sites as existing licences and use power levels similar to, but perhaps slightly below existing services. In general terms they could serve a majority of the relevant urban area. If such licences were significantly lower in power, but still co-sited, they would only offer a poor coverage area. Licences that were not co-sited would need a greater frequency separation from other services, thereby reducing the overall number of licences available in an area. 66. Given the localised nature of access and community radio services, national blocks of FM spectrum are not required and the planning and licence allocation needs to be at a local area level. Several potential allocation options for local licences have been considered. These range from the present process of reservation of frequencies for a specific programming types with a subjective process to select the best applicants for each reservation, a generic reservation with a subjective allocation process where competing programming types are weighed, or a commercial allocation process with restrictions on eligibility based on pre-determined factors (for example a new entrant not having access to an existing licence or offering a desired programme type not available in an area). All of these have their advantages and disadvantages, including the cost of the allocation process to the applicant and the government.

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67. Any allocation mechanism should be easy to understand, simple to operate, and be structured so that the intended benefits of the allocation are maintained over time. Allocations based on programme content are often difficult to describe and measure and require on going action to monitor compliance. These factors favour an objective, rather than subjective type of mechanism, and point towards mechanisms that have low compliance costs over the time of the allocation. Ideally the allocation process should also broaden the number of operators in present markets. On balance a simple auction type process, with eligibility restrictions preventing present licence holders in the relevant market from bidding, is favoured. However it would also be possible to limit entry based on other criteria and views on suitable criteria are also sought.
Proposal G - What advantages or disadvantages would occur from new entrants in local broadcasting markets? Would an auction allocation, with limitations on existing licence holders participating, be a satisfactory allocation mechanism? Would any other mechanism be preferred? Should restrictions on use and/or transferability be established for any such licences?

Balancing the Interests

68. Assuming that the expected technical availability of 4-6 licences in most areas under the technical proposals in this paper are confirmed, it is necessary to consider how such might be allocated between national not for profit reservations, local broadcasting use, full commercial use, and any other requirements. This paper assumes that five licences are available in each area, but that number would need to be reduced if unforeseen technical or other factors emerge from the submission process. In some areas, there may be additional licences available which could be developed over time which would generally be allocated by an unrestricted auction. 69. The Government is considering the option of making the following broad allocations of potential FM licences, largely from within the 100-107 MHz range of spectrum: i. ii. iii. one set for a potential future, but unspecified, near national not for profit broadcasting network (or equivalent local uses); two sets for local broadcasting, with allocation by an auction process limited to parties not holding licences in the specific area; two sets for commercial allocation with no entry restrictions on bidders.

70. It is envisaged that the local broadcasting licences could be constrained so that they were not transferable and not able to be programmed with material broadcast on licences in other areas, but otherwise unconstrained as to content. If services were not implemented, or the licences were longer needed by the owner, the licences would need to be surrendered to (or cancelled by) the Government for potential re-allocation in due course. However the details of any arrangements to facilitate licences for local broadcasting would need to confirmed after consideration of submissions to this paper. Discussion Document For Consultation
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71. The licence sets for commercial allocation, or any other licences that were developed over time, would be allocated by auction as individual licences in each area, with no special entry rules, transferability or programming restrictions.
Proposal H - Comments are sought on the option of: reservation and later allocation of licences for a national not for profit network (or equivalent); for an allocation of two licences for local area broadcasting restricted to new entrants; and for allocation of two licences for general commercial use in each area. Is the balance between national reservation, local broadcasting and full commercial broadcasting appropriate?

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Summary of Proposals
Proposal A - The Ministry seeks comments on adopting a policy of permitting co-sited transmitters with a frequency separation of 0.4 MHz, providing that the licensed eirp of such transmitters are within 10 dB of each other. Existing planning standards for determining compatibility with licences in adjacent areas would also apply. Proposal B - The Ministry seeks comments on the proposed criteria for use of synchronous systems and in particular on the competitive aspects of allocating licences for synchronous use without a contestable allocation process. Proposal C - The Ministry seeks comments on the provision of infill coverage through licences separated by 400 kHz from the main coverage service, or synchronous systems, initially in Wellington but later in other centres following technical proving. Proposal D - The Ministry seeks comments on the proposal to plan and implement VHF-FM broadcasting services between 87.5 MHz and 88 MHz. This would require the present Land Mobile use to be compressed into the band below 87.5 MHz. If the proposal is adopted, what time frame should apply to the transition? Proposal E - Comments are sought on the proposal to allow a greater power for low power FM broadcasters under the general licence in the 88.0 MHz to 88.4 MHz range. Is an eirp limit of 5 watts suitable? Should the method of measurement be changed to specify, say, 5 watts at the transmitter output and allow any antenna to be used? Proposal F - Comments are sought on the proposal to reserve a further set of licences (in addition to the present reservations) for a non-commercial or non for profit network. What programming purposes would be best broadcast on such a network (or equivalent individual area licences)? Who should manage such a service, how would it be funded and when could or should it be implemented? Proposal G - What advantages or disadvantages would occur from new entrants in local broadcasting markets? Would an auction allocation, with limitations on existing licence holders participating, be a satisfactory allocation mechanism? Would any other mechanism be preferred? Should restrictions on use and/or transferability be established for any such licences? Proposal H - Comments are sought on the option of: reservation and later allocation of licences for a national not for profit network (or equivalent); for an allocation of two licences for local area broadcasting restricted to new entrants; and for allocation of two licences for general commercial use in each area. Is the balance between national reservation, local broadcasting and full commercial broadcasting appropriate?

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Submissions
Invitation for Submissions
72. Comments on the issues raised in this paper and the proposed policies for management of the 88-108 MHz band should be provided to: Radio Spectrum Policy and Planning Resources and Networks Branch Ministry of Economic Development PO Box 1473 WELLINGTON Attention: Ian Hutchings Telephone: 04 474 2940 Fax: 04 499 0969 Email: radiospectrum@med.govt.nz 73. The closing date for submissions is 1 December 2005.

Official Information 1982

The content of submissions provided to the Ministry in response to this public discussion document may become subject to public release under the Official Information Act 1982. Please advise of any objection held to the release of any information contained in a submission to this document, and in particular, which part(s) should be withheld, together with the reason(s) for withholding it/them. The Ministry will take into account all such objections when responding to requests for information on submissions to this document under the Official Information Act 1982.

Privacy Act 1993

The Privacy Act 1993 establishes certain principles with respect to the collection, use and disclosure, by various agencies including the Ministry, of information relating to individuals, and access by individuals to information relating to them held by such agencies. Any personal information you supply to the Ministry in the course of making a submission will be used by the Ministry in conjunction with considerations of matters covered by this document only. Please clearly indicate in your submission if you do not wish your name to be included in any summary the Ministry may prepare for public release on submissions received.

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