Update to UHF-TV Case-by-Case Review
[ Last Updated 13 December 2005 ]
Radio Spectrum Policy and Planning
Resources and Networks Branch
Ministry of Economic Development
© Crown copyright
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The opinions contained in this document are those of the Ministry of Economic Development and do not reflect official government policy.
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Update to Case By Case Review
1. The discussion paper Implementation of a Price-Setting Formula for Reallocation of Commercial Spectrum Rights was released in June 2004, with comments requested by 30 July 2004. The case by case review of UHF-TV spectrum licences set out in the discussion paper is being revised before a report is provided to Cabinet.
UHF-TV Nationwide Sets
2. The discussion paper recognised difficulties in establishing market values for spectrum licences originally allocated in licence sets designed for near nationwide coverage, and proposed that these licences be reallocated by auction, as base prices for the current rights are unlikely to reflect market value.
3. Respondents expressed a clear preference for a renewal offer to be made to existing rightholders, rather than an auction of licences.
4. A firm of consultants was contracted to consider various methodologies for valuing the rights using the price-setting formula and rightholders' suggestions. The consultants concluded that no one methodology produced a fair market value, but suggested a renewal offer price in a range between $1.2 million and $1.6 million if rights are offered for 20 years, based on those methodologies judged to be most applicable. A copy of the consultants' report is available on request from radiospectrum@med.govt.nz.
5. In light of this advice, responsible Ministers have agreed to recommend an offer price in this range to Cabinet, and, if the current rightholder does not wish to pay this price, for the rights be reallocated by way of auction.
Renewal Terms of all UHF-TV Spectrum Licences
6. The discussion paper noted that where a viable alternative use is foreseen that would require significant re-planning of the band, new spectrum licences may be offered for periods of less than 20 years. The initial case-by-case review of spectrum licences in the UHF-TV band did not, however, propose a shorter term.
7. The term of renewed licences is being re-evaluated in light of submissions and of discussions on the future of the UHF-TV band with stakeholders and overseas counterparts.
8. Uncertainty has been expressed over use of the UHF-TV band for analogue broadcasting in the short to medium term and whether the current allocation of licences is fully compatible with migration to digital broadcasting in these bands. Further, in the long term, there is potential for at least part of the band to migrate to uses that may be incompatible with the existence of (potentially unused) site-specific spectrum licences originally engineered for analogue UHF-TV.
9. As the band manager for the UHF-TV band, the government must consider options to ensure that the highest value use of this spectrum is achieved over the longer term. One option under consideration is to offer a fixed term licences for a period less than 20 years, with the offer price reduced according to the price-setting formula. A ten year term, for example, would provide 15 years certainty of tenure from offer in 2005 to expiry in 2020, while allowing use of the bands to be reassessed for the period following 2020.
Next Steps
10. A report is being prepared for submission to Cabinet on the full range of expiry of rights issues (including UHF-TV licences allocated on an individual basis, AM/FM licences, whether unused licences will be offered for renewal, renewal term, averaging and the renewal process) later this year.
11. If you wish to offer comments on renewal term options, please provide them by email to radiospectrum@med.govt.nz or contact officials urgently. Due to the very short time for reporting back, comments are requested by 1 November 2004.
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