Response to Govt Radio Frequencies Announcement

MEDIA RELEASE

5 October 2006

The Radio Broadcasters Association remain bemused at the Government’s stated intention to increase diversity and expand local ownership of commercial radio through the creation of new licences, announced on Tuesday by Ministers Maharey and Cunliffe.

“Regarding ‘diversity’, New Zealand listeners are already more than spoilt for choice with the number of stations per head the highest in the world, so we are at a loss to see where the audience will come from for as many as four new stations” says David Innes, Executive Director of the RBA, representing almost all commercial stations.

In our response to the Government’s Discussion Paper, we pointed out that Auckland of course is the extreme example where there are approximately 22 commercial services, two iwi stations, three Pacific Island stations, three Christian stations, four Chinese language services and the major community access station Planet FM broadcasting in more than 50 languages other than English. But in relative terms, this plethora of choice applies just as much to small towns where for instance Dannevirke, has 11 radio services and Alexandra 8, several of them non-commercial.

We further questioned the sense in creating new community access licences when existing players are, for the most part, under resourced and finding survival a daily challenge.

The RBA also questioned the fairness of creating new local commercial licences when existing licencees both networks and local operators already make such a substantial contribution to their local communities, to a value of more than $15 million in 2005 in major cities and small towns alike across New Zealand. To now preclude current operators from bidding for possible new licences has to be seen as hostile to the interests of both incumbents and the valuable work they do in communities around New Zealand. In effect, these ‘ring-fenced’ licences would confer an unfair advantage on new entrants. Thus, existing operators, both networks and local independent operators in towns such as Whakatane, Timaru, Blenheim, Wanaka and Waipukurau will face competition from new entrants inevitably paying less for their licences. In effect, the incumbents will be subsidising new entrants.

Should the Government proceed down this road, we are at least slightly reassured by their statement that licence conditions and on-air performance will be strictly policed to ensure compliance with the policy objectives. However, successive Governments’ record in compliance monitoring is poor.

We note that in recent times at least two student stations and one iwi station have been leased to commercial operators in defiance of the original intent under which the licences were issued. Community access stations are expected to charge for airtime to reduce pressure on taxpayer funding – yet many of them do not. Some low power FM broadcasters transmit at significant power above their permitted level, causing interference to other licensees. And so it goes on.

Without effective monitoring, particularly over content, the Crown’s stated policy objectives will almost certainly fail. This will require investment by Government in a compliance regime “with teeth” as happens in Australia, Canada and the U.S.

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Please note attached the Executive Summary of the RBA submission to the Ministry of Economic Development on this topic.

VHF-FM BROADCASTING: FREQUENCY AVAILABILITY & ALLOCATION
In response to Engineering Discussion Paper – December 2005

Executive Summary

The RBA appreciates the opportunity to respond to the September Discussion Paper from the Ministry for Economic Development.

Before commenting on the various proposals, we raise the issue of pre-determination. This is described as a process of consultation, yet throughout the Discussion Paper the words ‘proposed’ or ‘proposal’ are used. This suggests to us that MED is attempting to ‘sell’ the proposal rather than engage in open-minded consultation.

Notwithstanding this, the RBA supports the thrust of Proposal B (to establish proper criteria for synchronous systems), C (to plan for use of infill coverage), and (in part), D (to establish broadcasting services between 87.5MHz and 88 MHz) – but we recommend that the lowest frequency be 88.1MHz.

However we do not support Proposal A suggesting co-sited transmitters at 400kHz separation, holding the view that there are no sound policy reasons to do so, and several compelling engineering reasons not to do so. We, therefore, do no support Proposals F, G or H either, and submit that no new frequencies of any power should be auctioned before 2011 tenure is finally resolved. Nor do we support E which proposes an increase in allowable power levels for LPFM operators.

There is no justifiable demand for even more diversification of radio broadcasting in New Zealand.

We have no doubt that various interest groups pressure Government from time to time for the right to broadcast. But that doesn’t mean that they have some inalienable right to even a medium power radio frequency.

Indeed, we believe Government seriously underestimates the extent of diversity currently provided. For instance in Auckland there are approximately 22 commercial services, 3 Christian stations, National Radio, Concert FM, 2 Iwi stations, a student station, Niu FM, 531PI, a major community access station Planet FM that successfully broadcasts to more than 51 minority language communities in a typical week, a full power Indian service, four Chinese language services and some 10-15 LPFM operators spread around the city.

But diversity is not restricted to the major cities. For instance Dannevirke has 11 commercial services, 2 Radio New Zealand services, an iwi station and an LPFM operator. Alexandra has 8 commercial stations and an LPFM operator.

Even if the Government is not fully satisfied with existing diversity, we argue that the solution lies in its own hands and could, for instance adjust the formats of Radio New Zealand (successfully and resolutely middle class Pakeha in both services) or by modifying the AM simulcast frequency to accommodate local content; utilise unused frequencies held by Radio New Zealand, and/or provide more support for the struggling Community Access ‘network’ and/or the vibrant but ever changing LPFM sector.

The quality of broadcasting at the local level is higher than ever before.

We believe that Government overestimates demand for and underestimates availability of “localism”. In the first instance, as with “diversity”, we point out that there is substantial local content. Extensive evidence of this is provided in Section 3.

Networking has not meant the end of localism. Indeed we believe that we now offer listeners in even the smallest towns, a quality of broadcasting far better than when almost all content was generated locally.

However, as with the diversity issue, we submit that if Government still believes there is justification for more localism the answer surely lies in its own hands. National Radio is fully networked and progressively simulcasting on AM and FM in most markets. We can see no reason why one of these services could not be “localised”. Concert FM is fully networked at present, there are available unused frequencies held by Radio New Zealand, and again the Community Access stations could be strengthened as could LPFM operators.

The possibility of 5 new frequencies should have been disclosed before conclusion of negotiations for 2011 renewals.

It is a serious breach of faith in respect of the agreement reached with Government in May 2005 for the cost of licence renewal for 2011-2031. Five new frequencies across most of the country would seriously erode the value of the licences covered by the $96 million cap by their dilutionary effect on the licence ‘pool’ and by reducing the effective primary coverage, and thus the value of existing licences.

There are compelling engineering reasons for not establishing a 400kHz raster.

We are concerned that the Ministry is proposing to depart from ITU recommendations and standards; ignore the high use of analogue receivers in New Zealand homes; potentially close off use of two out of the three main digital technologies (IBOC and DRM); and ignore the fact that no other country in the world has adopted a 400kHz raster when using high-powered, high-altitude transmission sites.

Fundamental to our concerns is the potential for economic damage.

Through drip-feeding of licences by auction, the Crown has achieved very high prices, particularly in the Auckland market. These have now translated into substantially increased cost for renewal of licences for 2011-2031.

The 400kHz raster proposal has the capacity to seriously erode the renewal investment necessary by incumbents.

Both engineering principles and practice (as observed in testing for interference on 93.8 Auckland and 93.8 Waikato) indicate that there will be significant interference and thus reduction in audience levels.

Moreover the route suggested by MED of alternative transmission sites would add significant cost and increased instances of coverage mismatch.

LPFM broadcasters should continue to be limited to 0.5 W maximum power.

The proposed increase to 5W would cause increased interference thus reducing the number of LPFM slots in each market and would accelerate the trend already observable in some markets for them to become ‘de-facto’ commercial broadcasters, the RBA opposes this proposal.

ENDS

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