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Discussion Document – For Consultation

Discussion Paper

VHF-FM Broadcasting: Frequency

Availability and Allocation

September 2005

First published in September 2005 by theRadio Spectrum Policy and Planning Group

Resources and Networks BranchMinistry of Economic Development

PO Box 1473, Wellington, New Zealandhttp://www.med.govt.nz

ISBN 0-478-28449-7




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




Introduction

1. VHF-FM broadcasting commenced in New Zealand in the early 1980s in thefrequency range 89-93 MHz. With the progressive clearance of other services thefrequency range used now covers 88-108 MHz. Small segments at the upper andlower edge are used for low power services under a general user licence, with theremainder of the band used for individually licensed services. The band above100 MHz has some capacity for more services, but further use is subject to a threeyear moratorium that is to be reviewed in 2006.

2. The technical standards presently used are largely those adopted in the early1980s, and are sourced from the International Telecommunication Union (ITU-R).Recent work suggests that new planning parameters can be adopted to increasethe availability of licences. In addition, changes to the lower frequency limit of theoverall band from 88 MHz to 87.5 MHz could be possible. The increase in licence

availability through potential removal of the moratorium and new technicalstandards requires decisions on any further provision of spectrum to meet wider broadcasting policy objectives, prior to any general commercial allocation. Thenew licences envisaged are in addition to present government reservations for thefour priority programmes.

3. In particular this paper raises the issues of potential broadcasters who seek tobroadcast only in a local area, or to a niche market, but are unable to fund theacquisition costs of a commercial licence. This issue was identified in the recentReview 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 broadcastingmarkets that assist in fulfilling the government’s wider broadcasting objectives(refer to paragraph 56 of this paper) and assist in progressing the GovernmentProgramme of Action (http://www.mch.govt.nz/publications/public-broadcasting/).

4. The purpose of this paper is to seek public feedback on proposals relating to VHF-FM 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 GeneralLicence; and

• facilitate the wider use of synchronous technology for coverage extensionand infill purposes; and




• create new FM licences throughout the country, largely in the band above100 MHz after the removal of the present moratorium, for use by:

• a future non-commercial “not for profit” network (or an equivalent use ineach local area); and

• local broadcasting (two licences in each area), with restrictions onacquisition to facilitate new entrants; and

• commercial broadcasting (two licences in each area), allocated with nospecial acquisition restrictions.

5. The feedback will be used to inform final Government decisions about bothfrequency availability through technical standards and allocation of future licencesthrough reservations or competitive auctions. Details about how to make asubmission are provided at the end of the document.

6. As a discussion document this paper does not represent formal Governmentpolicy and should not be relied upon by parties in making or consideringcommercial or other decisions. The Government reserves the right to add, delete,amend or replace any of the content of this document.




Availability of Licences

Background

7. The “FM” band used in New Zealand lies between 88 MHz and 108 MHz. This isbroadly consistent with the band utilised by other countries, although there issome minor variation between countries in the lower frequency limit. This broadconsistency ensures that a wide choice of equipment is available in New Zealandfrom world markets. The notable exception is Japan (along with China, Korea andthe Philippines) who utilise a narrower band from 76-90 MHz for domesticbroadcasting. Radios designed for those markets are not, in themselves, suitablefor use in New Zealand.

8. The lower edge (88-89 MHz) of the band in New Zealand is currently being usedto provide low power broadcasting services under a General Licence.

Frequencies below 88 MHz are used by Land Mobile services, although theintensity of use has diminished over the years as new communicationtechnologies (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 licencesmanaged and granted by the Crown under the Radiocommunications Act 1989.

Technical Standards

9. The number of licences technically available in any area is governed by theplanning standards adopted. These standards need to recognise the practical

performance of both transmission equipment and receivers. Initial services wereimplemented with a frequency separation of 1.6 MHz, primarily to allow lower costtransmitter combining equipment at main transmission sites. The presentstandard is a frequency separation of 0.8 MHz, although separations of 0.6 MHzhave been used in some circumstances.

10. Investigations and field trials have shown that with appropriate technicalparameters 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 overlappingcoverage. These trials were commenced on the expectations that, provided they

were considered successful (i.e. that reception was satisfactory and that protectionof other licences could be achieved), long term licences would be considered bythe Ministry under existing policies. These trials have not led to any significantissues being raised by listeners and therefore the question of the acceptance of narrower frequency separations needs to be considered more widely. This willalso assist in resolving the future of the specific trial licences. The wider planningissues are discussed in the following sections of this document.

Receiver Selectivi ty

11. The primary issue is whether typical receivers have adequate selectivity to

discriminate the wanted signal from the unwanted signal. ITU-R criteria




(Recommendation BS412-9) suggest that this can be adequately achieved at270 kHz separation if the signal levels are always exactly equal. At 400 kHz theunwanted signal should be no more than 20 dB stronger than the wanted signal.

Frequency

Separation

Protection ratio

BS 412 Figure 1

Comment

0 (co-channel) 45 dB (Stereo)

36 dB (Mono)

Wanted must be 45 dBstronger than unwantedsignal for stereo reception

Assuming single,steady stateinterference

270 kHz 0 dB (S or M) Wanted and unwantedsignals may be equal

400 kHz -20 dB (S or M) Unwanted can be 20 dBstronger than wanted signal

800 kHz -40 (S or M) Unwanted can be 40 dBstronger than wanted signal

Separation is beyondrange of Figure 1.Value is derived from Annex 2.

12. The relative signal strength values refer to the signals present at the receiver andtherefore the transmitter sites used and power levels would need to be selected toachieve these values in the majority of the common coverage area. This generallyrequires transmitters with a 400 kHz frequency separation to use the sametransmission site (be co-sited) and to have similar transmitter powers. To allow for

potential different transmitting antenna (with likely differences in radiation patternsand polarisations), and marginal differences in propagation to the receiver, amaximum 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 normalbandwidth of transmitted signals. This may be relevant because there has been atendency for some licensees in New Zealand to operate the transmitter deviationat the maximum permitted, and sometimes beyond that limit, in order to make theresulting signal “sound louder”.

14. The ITU-R criteria also warn against using transmitters with a frequencyseparation of 10.7 MHz (plus/minus 0.2 MHz) in a common coverage area. This isunderstood 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 IFstages. It seems likely that this relationship and mixing would, if present, affectreception of any FM signal in the coverage area, irrespective of the actual FMsignal being received. The trials in Auckland involve a 10.8 MHz separation (93.8and 104.6 MHz) and to date no reports of adverse effects from this issue havebeen reported. This suggests that, provided reasonably comparable signal levelsare used (i.e. there are not situations where a weak signal is being received in thepresence 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 MHzrelationship however.




Transmit Antenna and Combining Costs

15. Use of a narrower separation at a particular site would require either a separatetransmission antenna or a more costly combining system. These costs are likelyto 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 toavoid higher transmit antenna costs. However the cost of antenna/combininginfrastructure 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 arean issue that will need to be considered by intending broadcasters in setting their budgets. This would apply equally for commercial parties and groups seekinggovernment funding in some way. This factor is not seen as a matter that shouldprevent an otherwise available licence from being considered for allocation.

Receiver Tuning

17. Some radio receivers, typically bedside or portable models, are difficult to tunewhen stations are close together on the dial. This is especially true if the receiver is overloaded by strong transmissions from nearby transmitters. Analogue modelswill always require careful tuning when there are a large number of signalspresent. Anecdotal comments suggest that cheaper priced receivers have poorer performance including greater difficulty in accurate tuning. There are nostandards 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 islikely that there is a greater, and growing, proportion of digitally tuned models inuse. It is not proposed to limit the availability of licences based on what arelargely subjective performance factors of receivers such as the ease of tuning onparticular models of receivers.

Future Flexibility

18. The use of a 0.4 MHz separation may limit the practicality of adding new “sub-carrier” type services in future. These may include digital modulations in additionto, or instead of, existing modulations. Whilst digital systems, for example theIBOC system available in the United States, are generally designed to becompatible 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 beaccommodated by adjustment of the relative levels of the main signal and anysub-carrier, others may not be as easily accommodated. The basic questionremains as to whether to favour increased numbers of new broadcasting servicesimmediately or to favour maintaining future flexibility to better accommodatepotential 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




and others have recently introduced the Radio Data Service (RDS) technology toprovide programme identification and receiver re-tuning facilities for suitablyequipped 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 baseany new licences on technical parameters that accommodate the standard VHF-FM transmission, including an allowance for RDS technology. It is alwayspossible for licence holders to commercially negotiate licence purchases/changesto 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 fromJapan have been fitted with so called “band expanders” to allow reception of theFM 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 tospecific 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 shiftfrequency1. The use of 0.4 MHz separation between licences extends thepotential for this type of reception difficulty to include those using expanders with a10 MHz shift frequency2. Whilst the Ministry is aware of this issue, it is seen asone that relates to the type of receiving equipment used by the individual listener

and only occurs under particular circumstances. There has been recent legalaction on this matter and further clarification is being sought from the Courts. TheMinistry does not consider it is a matter that should be taken into account in thelicensing and certification of licences under the Radiocommunications Act.

Proposal A - The Ministry seeks comments on adopting a policy of permitting co-sitedtransmitters with a frequency separation of 0.4 MHz, providing that the licensed eirp of suchtransmitters are within 10 dB of each other. Existing planning standards for determiningcompatibility with licences in adjacent areas would also apply.

1A 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 theexpander means that services licensed on 90 MHz and 102 MHz cannot be properly received when using anexpander with a 12 MHz shift frequency as the original Japanese receiver cannot discriminate between these signalsafter they are processed by the expander.

2A 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).




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 siteconcerned. Listeners are required to tune to the appropriate frequency in the areaconcerned, although some stations now use the Radio Data Service (RDS) so thatlisteners with suitably equipped receivers can have the receiver automaticallychange to the strongest signal in any given area. An alternative technique usingtransmitters on the same frequency from two or more sites providing overlappingcoverage is also possible. The transmitters operate on a synchronous basis, withcarefully controlled linking arrangements to ensure that the signals reinforce eachother 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 andpreferred frequency sequence at a site. Under present planning standards thepreferred 0.8 MHz raster at a site would normally be offset by a few hundred kHzfrom 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 ateach site, say 91 MHz in this example, which gives a frequency separationnarrower that 0.8 MHz between licences at both sites A and C.

25. Synchronous systems have generally been limited in nature in the past andconsidered 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 technicalcompatibility issue of frequency separation, and a policy issue concerning the non-competitive allocation of licences.

26. The technical issues for any given proposal will depend on the services licensed inany given area, and will need to be considered individually. If frequencyseparations of 0.4 MHz are agreed as discussed earlier in this paper, there will bea greater scope for synchronous services to be implemented. Synchronousservices are also likely to require various frequency changes to existing servicesto be negotiated and agreed between the parties concerned.

27. The policy issue is that new licences for commercial purposes are presentlygenerally only provided on a contestable basis, typically by auction. Allocating alicence for a synchronous extension through auction is both difficult and not likelyto result in any new entrant. The close technical interaction of a synchronousextension licence and an existing licence means that the two licences cannoteffectively be used separately. Indeed, the extension licence cannot be createdand certified unless specified as being designed for synchronous use.

28. A synchronous network could conceivably be created, by a licensee with a singlelicence in say Wellington, to extend to Kapiti, Wairarapa, the Manawatu andbeyond subject only to technical compatibility issues. This could give that licenseea significant competitive advantage over another operator wishing to use the same




sites on a normal non-synchronous basis who would be required to purchase thenecessary licences at auction.

29. The Ministry wishes to encourage innovations and efficient spectrum utilisation bytechniques such as synchronous use, but also wishes to encourage new entrants

and provide a fair basis for extended coverage to occur. There is a tensionbetween these objectives and therefore the Ministry needs to balance themappropriately.

30. It is therefore proposed that applications for synchronous systems be consideredon 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 mayrequire the Ministry to agree to “relocate” an existing licence to a newfrequency well away from the existing frequency);

• they facilitate the availability of (or at least do not preclude) other licences inthe area, suitable for contestable allocation in due course (this recognisesthat separations of 0.4 MHz and frequency changes to facilitate synchronoususe 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 aformal 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 synchronoussystems and in particular on the competitive aspects of allocating licences for synchronoususe without a contestable allocation process.

Coverage Infill Techniques

31. The topography of some areas is such that a transmitter providing infill coveragefrom 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 stationand 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 largelywithin the coverage area of the main station.

32. Two techniques have recently been utilised, use of a 0.4 MHz frequencyseparation between infill station and the main station, and use of co-frequencysynchronous systems. The sites used for the 0.4 MHz separation trial (mainstation 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-sitedservices separated by 0.4 MHz. The power used from the main station was




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 (atthe Kaukau site) used powers of up to 47 dBW and coverage was anticipated inKapiti, and parts of Marlborough. Over time these more distant areas havedeveloped local transmission arrangements and are less dependant on Wellington

based transmitters. A lower power from Kaukau of around 35 dBW still gives anadequate local Wellington coverage.

33. The trial use of a frequency separation of 0.4 MHz between licences at theKaukau and Towai sites, given the specific topography and location of populatedor generally accessible areas, has proved satisfactory with the powers used. It istherefore considered that it should be adopted as a normal arrangement.

34. Other FM services have provided coverage infill in Wellington throughsynchronous systems. These use two or more transmitters on the samefrequency 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 thebasis of either:

• wide area coverage and power (47 dBW) without infill coverage; or

• metropolitan area coverage and power (35 dBW) with an infill capabilityusing 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, butwould require careful planning together with some limits on the flexibility thatlicensees presently have in how licences might be utilised. The costs toimplement a synchronous system would be higher than for a simple translator, butmobile listeners would not require to tune between two frequencies for completecoverage. These additional costs may pose funding issues for non-commercialbroadcasters, and require increased commercial viability for other licensees. In

due course these standards would also be used as licence re-arrangements andchanges were sought to the existing licences in the Wellington area. The sameconcepts would also be applied in other locations, should they be proved to befeasible.

Proposal C - The Ministry seeks comments on the provision of infill coverage throughlicences separated by 400 kHz from the main coverage service, or synchronous systems,initially in Wellington but later in other centres following technical proving.




Frequency Limits

38. The frequency band allocated to the Broadcasting Service in the ITU RadioRegulations commences at 87 MHz in Region 3 (Asia Pacific including NewZealand). 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 requirementsof Europe (ITU Region 1) which has an allocation commencing at 87.5 MHz. NewZealand 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 highpower licences being used above 88 MHz3.

39. The spectrum below 88 MHz is used by Land Mobile services which provide two-way communications to vehicle fleets such as taxis, couriers. This use hasdiminished over recent years and is expected to diminish further in future years.

The wide use of FM broadcast receivers that which are designed to receivefrequencies from 87.5 MHz suggests that in time the highest value use of thefrequency 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 aeronauticalservices, but even if this limit could be reviewed there is virtually no receivingequipment designed to receive FM broadcasts on frequencies above 108 MHz.

Proposal D - The Ministry seeks comments on the proposal to plan and implement VHF-FMbroadcasting services between 87.5 MHz and 88 MHz. This would require the present LandMobile use to be compressed into the band below 87.5 MHz. If the proposal is adopted, whattime frame should apply to the transition?

41. It is also considered possible to contemplate a slightly higher power for the “lowpower” broadcasting used at this band edge. The power limit is designed toprotect against interference to the sensitive Land Mobile base receivers which aretypically located on hilltop locations some kilometres away from the urban areaswhere low power FM services are generally located. There has been littleevidence 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 levelscomparable to those created by mobile transmitters operating within their frequency band. This suggests that an eirp of around 5 watts could be used onspecific frequencies in the low power band edges4. However this is not

3A 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.

4Existing 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.




considered practical at the upper band edge because of the high protectionrequirement for the aeronautical services.

43. If the allowable power is to be increased, there might also be benefits in changingthe 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 theantenna gain and feeder loss to set the transmitter power. An alternative could beto specify a transmitter power, and recognise that a typical dipole antenna gainand feeder losses will probably only increase this by only 1 to 2 dB. Asophisticated installation might add perhaps 6 to 10 dB in one direction, with acorresponding decrease in other directions. The alternative approach is likely tobe easier for operators to ensure compliance, but is perhaps more difficult for enforcement purposes as access to premises is required for measurement. In anyevent a LPFM operator would still be required to avoid creating interference andmay 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 theLand Mobile service will continue using this spectrum for some time. A prohibitionon new Land Mobile licensing and eventual use by low power broadcasting isenvisaged. For the purposes of this discussion paper use of 87.5-88.4 isenvisaged as “low power” use with perhaps 88-88.4 MHz being licences at amaximum power of 5 watts. The 87.5-88 MHz portion closer to the Land Mobileservices would retain a power limit of 0.5 watts. Above 88.4 MHz would be utilisedfor normal individually licensed “high” power use.

45. Changes of this type would cause disruption to Land Mobile services and to someexisting 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 eirplimit 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 Availabili ty

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 thereare not large numbers of licences in most areas, because the current planninguses a geographic and frequency offset approach to maximise availability. For example, a new licence spaced at 400 kHz at Auckland (Skytower) will generallybe on exactly the same frequency as an existing wide area coverage licence in theWaikato. This limits the power of a licence at Auckland (or in Waikato), often tothe extent that it falls outside the power difference considered satisfactory.Creation and technical certification of a new wide coverage licence in either areamay therefore not be immediately possible.




47. Additional licences would be possible through the use of revised technicalstandards, the lifting of the present moratorium in the band above 100 MHz, andeventual 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 morelicences 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 wouldperhaps need to focus on Hamilton from a suitable transmission site, but not usethe high Te Aroha site. Detailed planning would be necessary to determine theoptimum outcomes.

48. There may also be some scope for increased coverage by re-siting or up-poweringexisting licences with case by case negotiations between licensees, but thesewould not generally be available for allocation by the Ministry. However themajority of new licences are anticipated from use of the new standards in theupper 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 befour to six new licences in Auckland, and a similar or potentially slightly greater number of licences in most centres throughout New Zealand. Some of theselicences would need to be targeted towards urban centres, rather than being widearea licences. This level of licence availability was not anticipated in the previousdiscussion paper in 2001.




Allocation of Licences

Present Position

50. Given the potential availability of additional licences, it is useful to review thepresent allocations prior to postulating how additional licences might be allocated. Approximately one third of the lower portion (89-100 MHz) of the FM band iscurrently reserved or used for non-commercial licences. These are used toprovide services such as National Radio, Concert FM, access radio, communityradio and Māori radio. The remainder of this portion of the band has beenlicensed for commercial purposes. A few non-commercial reservations, mainlygiving coverage of less populated areas, remain unused.

51. The upper portion (100-107 MHz) of the band is generally used or reserved for theGovernments priority networks (National Radio, Pacific Island Radio, Youth Radio,

and a National Māori Radio service). The first two of these programmes havebeen implemented in many areas over the last few years. In addition to thesepriority networks, an access radio service and two commercial radio services arelicensed at Auckland, and an access radio station is licensed at Kapiti. Theremaining 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 Māngai Pāho (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 thevalue of the resource to society. In the past, the Crown has achieved this byensuring that licences are available for a range of broadcasting services, whether they have commercial or non-commercial objectives. Commercial licence holdershave generally purchased licences through auctions or in secondary markets for the purpose of providing broadcasting services for profit. The Governmentrecognises that “not for profit” services provide benefits to society and thereforehas 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 thepurpose of any particular existing AM licences or reservations should bereallocated to the FM band. The underlying assumption is that both MF-AM andVHF-FM technologies will be suitable for broadcasting purposes for theforeseeable future.

55. It is anticipated that Government could wish to make decisions on the issues inthis discussion paper in the early months of 2006, and that licences couldsubsequently be allocated later in 2006. It is recognised that, at present, alllicences 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 non-




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 beappropriate. This paper assumes that any new licences could potentially beallocated 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 thefollowing would be used to guide the development of broadcasting policies toensure that desired kinds of broadcast content are available to the New Zealandpublic:

• ensure all New Zealanders have reasonable and regular access tobroadcasting representing the uniqueness and diversity of New Zealand life,

recognising that the histories and stories of whānau, hapū and iwi areintegral to any description of that life;

• meeting the information and entertainment needs of as many interests asreasonable possible, including those that cannot be met by commercialbroadcasting;

• contributing to public awareness of and participation in the political and socialdebates of the day;

• providing for minority interests and increased choice; and

• encouraging innovation and creativity in broadcasting while aiming tocontinually 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, Iwibroadcasters, and a number of local services such as student radio, access radioetc. There is little doubt that further commercial licences could be allocatedimmediately, but consistent with overall broadcasting policy it is necessary to alsoconsider other potential broadcasting requirements, eg programmes potentiallyprovided 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 typeof service throughout much of New Zealand. The extent of each reservation hasdepended on the agreed population coverage expectations. There are two sets of reservations partly utilised (National FM, and National Pacific Radio) and it wouldbe expected that these services will be progressively extended to achieve their coverage expectations using the existing reserved frequencies. A further two setsremain reserved for services not yet implemented (Youth Radio and National

Mā

ori Radio). Whether, when, and how these latter reservations will be utilised isa matter for further government policy development which is outside the scope of




this paper. The new licences envisaged in this paper are in addition to theseearlier reservations.

59. Whilst there are no proposals for review of the existing unused reservations at thisstage, the technical proposals for the Wellington area in this paper would allow a

review of the actual frequencies needed to achieve the coverage objectives. Thiswould assist in increasing the availability of new licences in areas where infillcoverage 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 nationalfrequency reservations, or reuse of the existing reservations that are not yetutilised, are necessary to assist in meeting broadcasting objectives. If newpurposes 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 couldbe reserved for educational institutions (as distinct from student radio andbroadcasting school courses) to enable educational material to be broadcast.Only a handful of colleges/schools have operated licences in the past but if suchreservations were to be considered on a near national basis there would need tobe clear understandings about how these services might be structured andfunded.

Proposal F - Comments are sought on the proposal to reserve a further set of licences (inaddition to the present reservations) for a non-commercial or “non for profit” network. Whatprogramming purposes would be best broadcast on such a network (or equivalent individualarea licences)? Who should manage such a service, how would it be funded and when couldor should it be implemented?

Local Area Broadcasting

62. Local broadcasting is presently facilitated through low power broadcasting, and afew frequency reservations/licences in particular areas. There are no licences

provided specifically for local broadcasting, but some commercial licence holdersdo provide a mix of network and local programming to serve their audience needs.There are, however, potential broadcasters who periodically seek new licences inspecific local areas. Over the years there has been interest in proposals for radioreading services for the visually impaired, rebroadcasts of BBC programming,locally owned and programmed services, and community specific proposals, suchas local radio services for the Pacific communities and Asian communities.

63. It is necessary to consider whether a greater number of local area licences wouldresult in programming that assists in meeting governments overall objectives, andif 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




provided, there is a risk that both the intended benefits, and the opportunity costsof an alternative commercial allocation, would be lost.

64. There has been growing interest by aspirant broadcasters over past years in atype of service that might be seen as falling between those provided by fully

commercial broadcasting and public broadcasters. Such aspirant broadcastersmight seek to target an ethnic community, or an interest or demographic targetacross a wide area, or just seek to broadcast to the local community. This issuewas 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 communitygroups provide programming to a single time shared transmitter. Increasinglysome 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 addto meeting governments overall broadcasting objectives.

65. If this so called “middle tier” of potential broadcasters is to be facilitated, it isnecessary to determine the extent that frequencies should be provided, and howsuch might be allocated to the likely wide range of applicants. In general licenceswould need to be in the upper part of the FM band, and in some areas would needto use a narrow frequency separation of 0.4 MHz as discussed earlier in thispaper. For an optimum technical planning outcome any “middle tier” licencesshould generally be operated from the same sites as existing licences and use

power levels similar to, but perhaps slightly below existing services. In generalterms they could serve a majority of the relevant urban area. If such licences weresignificantly 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 frequencyseparation from other services, thereby reducing the overall number of licencesavailable in an area.

66. Given the localised nature of access and community radio services, nationalblocks of FM spectrum are not required and the planning and licence allocationneeds to be at a local area level. Several potential allocation options for locallicences have been considered. These range from the present process of

reservation of frequencies for a specific programming types with a subjectiveprocess to select the best applicants for each reservation, a generic reservationwith a subjective allocation process where competing programming types areweighed, or a commercial allocation process with restrictions on eligibility basedon pre-determined factors (for example a new entrant not having access to anexisting licence or offering a desired programme type not available in an area). Allof these have their advantages and disadvantages, including the cost of theallocation process to the applicant and the government.




67. Any allocation mechanism should be easy to understand, simple to operate, andbe structured so that the intended benefits of the allocation are maintained over time. Allocations based on programme content are often difficult to describe andmeasure 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 inpresent markets. On balance a simple auction type process, with eligibilityrestrictions 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 localbroadcasting markets? Would an auction allocation, with limitations on existing licenceholders participating, be a satisfactory allocation mechanism? Would any other mechanismbe 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 areasunder the technical proposals in this paper are confirmed, it is necessary toconsider 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 additionallicences available which could be developed over time which would generally beallocated by an unrestricted auction.

69. The Government is considering the option of making the following broadallocations of potential FM licences, largely from within the 100-107 MHz range of spectrum:

i. one set for a potential future, but unspecified, “near national” not for profitbroadcasting network (or equivalent local uses);

ii. two sets for “local broadcasting”, with allocation by an auction process limitedto parties not holding licences in the specific area;

iii. two sets for commercial allocation with no entry restrictions on bidders.

70. It is envisaged that the “local broadcasting” licences could be constrained so thatthey were not transferable and not able to be programmed with material broadcaston licences in other areas, but otherwise unconstrained as to content. If serviceswere not implemented, or the licences were longer needed by the owner, thelicences 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.




71. The licence sets for commercial allocation, or any other licences that weredeveloped over time, would be allocated by auction as individual licences in eacharea, 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 licencesfor 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, localbroadcasting and full commercial broadcasting appropriate?




Summary of Proposals

Proposal A - The Ministry seeks comments on adopting a policy of permitting co-sitedtransmitters with a frequency separation of 0.4 MHz, providing that the licensed eirp of suchtransmitters 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 synchronoussystems and in particular on the competitive aspects of allocating licences for synchronous usewithout a contestable allocation process.

Proposal C - The Ministry seeks comments on the provision of infill coverage through licencesseparated by 400 kHz from the main coverage service, or synchronous systems, initially inWellington but later in other centres following technical proving.

Proposal D - The Ministry seeks comments on the proposal to plan and implement VHF-FMbroadcasting 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, whattime 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 limitof 5 watts suitable? Should the method of measurement be changed to specify, say, 5 watts atthe transmitter output and allow any antenna to be used?

Proposal F - Comments are sought on the proposal to reserve a further set of licences (inaddition to the present reservations) for a non-commercial or “non for profit” network. Whatprogramming purposes would be best broadcast on such a network (or equivalent individualarea 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 localbroadcasting markets? Would an auction allocation, with limitations on existing licence holdersparticipating, be a satisfactory allocation mechanism? Would any other mechanism bepreferred? Should restrictions on use and/or transferability be established for any suchlicences?

Proposal H - Comments are sought on the option of: reservation and later allocation of licencesfor a national not for profit network (or equivalent); for an allocation of two licences for local areabroadcasting restricted to new entrants; and for allocation of two licences for general

commercial use in each area. Is the balance between national reservation, local broadcastingand full commercial broadcasting appropriate?




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 PlanningResources and Networks BranchMinistry of Economic DevelopmentPO Box 1473WELLINGTON

Attention: Ian Hutchings

Telephone: 04 474 2940

Fax: 04 499 0969

Email: [email protected]

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 OfficialInformation Act 1982.

Please advise of any objection held to the release of any information contained in asubmission 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 accountall such objections when responding to requests for information on submissions to thisdocument under the Official Information Act 1982.

Privacy Act 1993

The Privacy Act 1993 establishes certain principles with respect to the collection, useand disclosure, by various agencies including the Ministry, of information relating toindividuals, and access by individuals to information relating to them held by suchagencies. Any personal information you supply to the Ministry in the course of makinga submission will be used by the Ministry in conjunction with considerations of matterscovered by this document only. Please clearly indicate in your submission if you do notwish your name to be included in any summary the Ministry may prepare for publicrelease on submissions received.

0.4khz_newzealand_technical standards.pdf

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