Vote: Communications
Key
Departmental Output Classes
D1 Policy Advice - Communications
D2 Management and Enforcement of the Radio Communications Act
Non-Departmental Activities
Output Class O1 - Maintenance of Standards in Broadcasting
Output Class O2 - Telecommunications Commissioner
Other Expense - Contribution to International Telecommunications Organisations
Output Class D1 - Policy Advice - Communications
Description
This output class provides policy advice in respect of telecommunications, postal services, broadcasting and the management of the radio spectrum.
Outputs within this class are:
- policy advice on the regulation, operation, development and effectiveness of these sectors;
- representation of New Zealand's international interests in these sectors;
- advice on the operations of the Broadcasting Standards Authority;9
- advice on the exercise of Ministerial statutory powers; and
- monitoring and enforcement of compliance with telecommunications, broadcasting and postal services legislation, and the establishment of tradeable radio spectrum rights.
Quantity, Quality, Timeliness and Cost
Details of performance against the generic standards and measures for policy advice provided by the Ministry of Economic Development for this Vote (Quantity, Quality and Timeliness) can be found in the section Policy Advice and Ministerial Servicing.
Specific deliverables relating to the agreed work programme are outlined below.
Work Programme
All policy advice projects were delivered in accordance with the terms of the work programme as agreed with the Minister.
Key deliverables in the work programme for the year included:
Completing implementation of Government decisions arising from the recommendations of the Ministerial Inquiry into Telecommunications, including passing detailed legislation and developing regulations as required by 31 December 2001.
The Telecommunications Act was passed in December 2001. The Act sets up a Telecommunications Commissioner in the Commerce Commission to resolve disputes affecting competition between industry players. It represents a major change in the regulatory regime governing telecommunications in New Zealand.
By 30 June 2002, design of a levy to fund the Telecommunications Commissioner was completed with service providers' comments being sought to finalise draft levy regulations.
The Ministry also negotiated a revised Kiwi Share Obligation with Telecom to provide an upgrading of its rural network for Internet services and to modernise the agreement. The new agreement became a Telecommunications Service Obligation (TSO) under the Act, which provides for enforcement of obligations and cost sharing with competitors.
Monitoring and providing advice on the performance of the Broadcasting Standards Authority by 30 June 2002.
Responsibility for providing purchase advice in relation to the Broadcasting Standards Authority was transferred to the Ministry for Culture and Heritage from 1 July 2001.
Allocation of radio spectrum suitable for new telecommunications and broadcasting services by 30 June 2002.
In December 2001 Cabinet agreed that the Ministry conduct an auction of management rights to spectrum suitable for wireless local loop (WLL), local multipoint distribution services (LMDS) and cellular services around 900 MHz. In support of the Government's rural broadband objectives, Cabinet agreed to retain two out of 11 WLL blocks for licensing in specific geographical areas.
An auction catalogue was finalised in May 2002 following external peer review and consultation with industry on the draft catalogue.
In November 2001, Cabinet agreed to grant priority, in the upper FM band, to National Radio, Concert FM, Māori radio and Pacific Island radio.
Cost
| | 2002
Main
Estimates | 2002
Supple-
mentary
Estimates | 2002
Actual | 2001
Actual |
|---|
| | $000 | $000 | $000 | $000 |
| Revenue: | | | | |
| Crown | 2,372 | 2,278 | 2,016 | 2,562 |
| Other | 41 | 41 | 44 | 55 |
| Total Revenue | 2,413 | 2,319 | 2,060 | 2,617 |
| Expenses: | | | | |
| Annual appropriations | 2,413 | 2,319 | 2,060 | 2,617 |
| Other appropriations | - | - | - | - |
| Total Expenses | 2,413 | 2,319 | 2,060 | 2,617 |
| Net Surplus/(Deficit) | - | - | - | - |
Sources of Revenue Other
| 2002 | 2001 |
|---|
| | $000 | $000 |
| Application fees | 1 | 6 |
| Cost recovery | 41 | 37 |
| Miscellaneous | 2 | 12 |
| Total Revenue Other | 44 | 55 |
Major Budget Variances
The Supplementary Estimates decrease reflects a transfer of costs for policy advice on broadcasting content standards (-$78,000) to Vote Arts, Culture and Heritage, and a transfer to Vote Energy to meet the costs associated with additional work being undertaken due to the 2001 dry winter and issues relating to electricity governance and rules development work (-$16,000).
The variance between 2001/2002 and 2000/2001 for expenses reflects the completion of a Ministerial inquiry into the telecommunications industry in 2000/2001.
Output Class D2 - Management and Enforcement of the Radio Communications Act 1989
Description
This output class provides radio frequency spectrum management services. Outputs within this output class are:
- licensing and compliance management of the radio frequency; and
- registration of radio spectrum rights.
Quantity, Quality, Timeliness and Cost
Licensing and Compliance Management of Radio Frequency Spectrum
Quantity
Numbers issued or assigned:
- 7,393 (4,000) radio licences; (Forecast numbers relate to new licence applications only. In the course of the year 3,006 new licences were processed. In addition, a further 4,387 applications for modifications to existing licences were processed.)
- 251 (200) spectrum licences;
- 1,971 (2,700) interference resolutions following complaint.
Volumes are demand driven.
Quality
Broadcasting licences issued conform to the established internal engineering processes as confirmed by an independent external audit.10
An independent external audit, conducted by a recognised member of IPENZ, confirmed that 100% (95%) of broadcasting licences issued conformed to the established internal engineering processes.
Administrative licences issued conform to the established internal engineering processes as confirmed by an independent external audit.11
An independent external audit, conducted by a recognised member of IPENZ, confirmed that 100% (95%) of administrative licences issued conformed to the established internal engineering processes.
Spectrum rights registered comply fully with statutory requirements as confirmed by an internal audit.
An internal audit confirmed that 100% (100%) of statutory requirements were met.
Timeliness
98% (90%) of correctly completed licence applications received were processed within timeframes12 specified within the letter of acknowledgment.
89% (80%) of management right and licence instruments were processed within five clear business days of receipt.
Projects
Review and complete paper on current usage of bands between 3-10 GHz. Identify likely future demand and trends and possible technical solutions to meet these demands by 30 June 2002.
Completed by 30 June 2002.
Review and complete paper on spectrum requirements for the land mobile services future transition to digital emissions by 30 June 2002.
Completed by 30 June 2002.
Cost
| | 2002
Main
Estimates | 2002
Supple-
mentary
Estimates | 2002
Actual | 2001
Actual |
|---|
| | $000 | $000 | $000 | $000 |
| Revenue: | | | | |
| Crown | - | - | - | - |
| Other | 12,629 | 12,629 | 12,033 | 12,474 |
| Total Revenue | 12,629 | 12,629 | 12,033 | 12,474 |
| Expenses: | | | | |
| Annual appropriations | 11,349 | 11,349 | 11,386 | 10,968 |
| Other appropriations | - | - | - | - |
| Total Expenses | 11,349 | 11,349 | 11,386 | 10,968 |
| Net Surplus/(Deficit) | 1,280 | 1,280 | 647 | 1,506 |
Sources of Revenue Other
| | 2002 | 2001 |
|---|
| $000 | $000 |
| RTRW fees | 4,739 | 4,363 |
| RAL telecommunications | 666 | 646 |
| RAL - radio and mobile | 5,132 | 5,958 |
| Other fees | 347 | 632 |
| Total fees | 10,884 | 11,599 |
| Interdepartmental revenue | 1,110 | 792 |
| Net gain on sale of fixed assets | - | 6 |
| Miscellaneous | 39 | 77 |
| Total Revenue Other | 12,033 | 12,474 |
Major Budget Variances
The variance between 2001/2002 and 2000/2001 expenses reflects an increase in expenditure as a result of costs associated with the hosting of the WITU (World International Telecommunications Union) conference by the Radio Spectrum Management Group. The variance in Revenue Other reflects a decrease in RAL levies for radio and mobile.
The variance between the Supplementary Estimates and actual for Revenue Other reflects a lower than anticipated revenue for RAL levies for radio and mobile communications.
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