Vote: Communications
Output Class - Policy Advice - Communications
Description
This output class provides policy advice in respect of telecommunications, postal services, broadcasting and the management of radio spectrum.
Quantity, Quality, Timeliness and Cost
Work Programme
All policy advice projects were delivered in accordance with the terms of the work programme as agreed with the Minister. Changes to deadlines were negotiated with the Minister.
Key Deliverables in the Work Programme for 2003/2004
Telecommunications
Report to the Minister on the performance of the new telecommunications regulatory regime (including the comparative performance of the New Zealand telecommunications regime in respect of prices and the uptake of key new telecommunications services) by 30 June 2004.
A report benchmarking New Zealand Telecommunications Services (including fixed, mobile and broadband services) against other OECD countries was provided to the Minister on 30 June 2004.
In addition, a major report was prepared following the Commerce Commission's decisions and recommendations in regard to unbundling the local loop. This report included a public submissions process. It was provided to the Minister in the agreed timeframe.
Radio Spectrum
Increase certainty for spectrum users by finalising and implementing a policy on how spectrum rights should be treated on their expiry.
A price-setting formula has been developed and a discussion paper was released in June 2004 setting out the proposed arrangements for the renewal of radio spectrum rights. The goal is to provide industry with greater confidence in the arrangements for the renewal of rights, and therefore assist them to make investment decisions. The project to finalise and implement the policy on how spectrum rights should be treated on expiry will extend into the 2004/2005 year, due to the complex nature of the policy work and the requirement for another round of public consultation.
Advice was also provided on finalising arrangements for the allocation of two blocks of 3.5GHz spectrum reserved by the Crown. This work supports Project Probe and other regional broadband projects.
Cost
(Figures are GST exclusive)
| | 2004
Main
Estimates | 2004
Supple-
mentary
Estimates | 2004
Actual | 2003
Actual |
| | $000 | $000 | $000 | $000 |
| Revenue: | | | | |
| Crown | 2,339 | 2,009 | 1,875 | 2,042 |
| Other | 41 | 41 | 14 | 41 |
| Total Revenue | 2,380 | 2,050 | 1,889 | 2,083 |
| Expenses: | | | | |
| Annual appropriations | 2,380 | 2,050 | 1,889 | 2,083 |
| Other appropriations | - | - | - | - |
| Total Expenses | 2,380 | 2,050 | 1,889 | 2,083 |
| Net Surplus/(Deficit) | - | - | - | - |
Sources of Revenue Other
| | 2004
Actual | 2003
Actual |
| | $000 | $000 |
| Cost recovery | 11 | 41 |
| Inter-departmental cost recovery | 2 | - |
| Miscellaneous | 1 | - |
| Total Revenue Other | 14 | 41 |
Major Budget Variances
The Supplementary Estimates change (-$330,000) reflected the deferral of a postal access review to January 2005 (-$80,000), and a transfer to Vote Energy to meet residual cost pressures associated with addressing security of supply policy issues in that Vote (-$250,000).
The variance between Supplementary Estimates and actual expenses mainly reflects delays to the introduction of the deaf relay service and textphone access due to a greater amount of time required to complete consultation and the tender processes than expected. The Telecommunications Relay Service (TRS) launch, which was to be in March 2004, is now expected to be in November 2004.
The variance between the 2003/2004 and 2002/2003 for expenses is mainly due to the deferral of the postal access review to 2004/2005 ($80,000), and the net effect between the two years of transfers to Vote Energy Policy Advice in each year ($250,000 in 2003/2004, $180,000 in 2002/2003).
Output Class - Management and Enforcement of the Radiocommunications Act 1989
Description
This output class provides services in relation to the management of the Radiocommunications Act 1989 by planning the allocation of radio spectrum, including international coordination and representation; issuing licences; providing licence registration services and access to the information held on the register of radio frequencies; assisting with the resolution of radio spectrum interference complaints; ensuring compliance with, and enforcement of, the statutory responsibilities of all spectrum users; and management of radio spectrum sales.
Quantity, Quality, Timeliness and Cost
(Performance standards and forecast volumes are in brackets where applicable.)
Quantity
Numbers actioned:
- 2,888 (3,000) new radio licence applications;
- 419 (250) new spectrum licences;
- 1,669 (600) instrument registrations; and
- 1,090 (1,000) interference investigations.
Volumes are demand driven. While the numbers forecast for instruments registered were based on historical trends it is difficult to predict how many applications will be received in any one year because applications for new services are dependent on technology trends, equipment and spectrum availability. The very large increase in instrument registrations in 2003/2004 is partly due to growth in broadband services and 3G realignment.
The higher than forecast number of new spectrum licences is due to an auction being held during the year and non-commercial/Māori allocations resulting in increased numbers of licence applications.
The Ministry conducted:
- 233 (150) Electro Magnetic Compatibility (EMC) supplier compliance folder audits. (All suppliers using the C tick label are required to maintain a compliance folder for each product supplied. This folder contains specified documents demonstrating the product's compliance with applicable standards and is subject to audit);
- 375 (250) EMC product audits;
- 328 (150) new licence audits; and
- 82 (10) site audits.
The higher than forecast number of EMC supplier compliance folder audits was due to an increase in the number of suppliers with high folder numbers encountered.
Larger numbers of EMC product audits, new licence audits and site audits were achieved because the audits took less time to conduct than originally estimated. Target audit volumes have been increased for the 2004/2005 financial year.
Quality
For all licences issued in accordance with established ISO 9001 processes, ISO 9001 certification will be retained following quality audits.
The quality target was met. An audit by TELARC in May 2004 confirmed that all licences were issued in accordance with established ISO 9001 processes. ISO 9001 certification was retained.
Timeliness
93% (90%) of management rights and correctly completed spectrum licence instruments were receipted and acknowledged within five clear business days of receipt.
Documented interference complaints were responded to and remedial action commenced as follows:
- for public safety services, within two hours of being lodged in 100% (90%) of cases;
- for commercial radiocommunications, within one working day of being lodged in 95% (95%) of cases; and
- for radio and television broadcasting, within two working days of being lodged in 94% (90%) of cases.
Radio Spectrum Planning
As detailed in the Ministry of Economic Development Output Plan, work focused on the following activities:
Representing New Zealand's radiocommunications interests at the International Telecommunications Union (ITU) and other international fora.
The Ministry represented New Zealand's interests at the 2003 ITU World Radio Conference and in various ITU-related working groups associated with spectrum management and new technologies.
Conducting radio spectrum management right sales in accordance with established rules, as directed by the Government.
Auction No. 6 for the sale of FM, AM and television frequencies was completed in December 2003.
Engineering planning and advice for radio spectrum allocations.
A proposal for the re-planning of the 400MHz band was prepared and released to industry for comment. This proposal supports the expansion of land mobile communications infrastructure and new digital technologies.
Advice was also provided on a range of issues including digital television, 3.5GHz fixed wireless access spectrum, and coordination with international satellites.
Cost
(Figures are GST exclusive)
| | 2004
Main
Estimates | 2004
Supple-
mentary
Estimates | 2004
Actual | 2003
Actual |
| | $000 | $000 | $000 | $000 |
| Revenue: | | | | |
| Crown | 320 | 320 | 187 | - |
| Other | 12,629 | 11,201 | 11,426 | 12,461 |
| Total Revenue | 12,949 | 11,521 | 11,613 | 12,461 |
| Expenses: | | | | |
| Annual appropriations | 9,821 | 9,821 | 9,031 | 11,324 |
| Other appropriations | - | - | - | - |
| Total Expenses | 9,821 | 9,821 | 9,031 | 11,324 |
| Net Surplus/(Deficit) | 3,128 | 1,700 | 2,582 | 1,137 |
Sources of Revenue Other
| | 2004
Actual | 2003
Actual |
| | $000 | $000 |
| Spectrum licence fees | 5,276 | 5,768 |
| RAL - telecommunications | 481 | 584 |
| RAL - radio and mobile | 4,933 | 4,866 |
| Other fees | 124 | 217 |
| Total fees | 10,814 | 11,435 |
| Inter-departmental revenue | 558 | 997 |
| Net gain on sale of fixed assets | 37 | - |
| Inter-departmental cost recovery | 6 | - |
| Miscellaneous | 11 | 29 |
| Total Revenue Other | 11,426 | 12,461 |
Major Budget Variances
The Supplementary Estimates change for Revenue Other (-$1.428 million) reflected a fees reduction in October 2003.
The variance between Supplementary Estimates and actual expenses reflects timing issues around both the commencement of the project to replace the Radio Spectrum Management Group's IT system and appointments to a number of vacancies, and the Government requiring only one large auction for spectrum rights to be undertaken in 2003/2004.
The variance between 2003/2004 and 2002/2003 for Revenue Other (-$1.072 million) mainly reflects a fees reduction in October 2003.
The variance between 2003/2004 and 2002/2003 for expenses (-$2.33 million) mainly reflects one-off severance payments made in 2002/2003 following a review of the Radio Spectrum Management Group.
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