Hon David Cunliffe
Minister for Communications and Information Technology
5 December 2007
Media Statement
New Radio and Spectrum Licence Fees
Fairer and more transparent annual fees for radio and spectrum licences will
come into effect from 1 February 2008, Communications and Information
Technology Minister David Cunliffe said today.
“The new fee changes on 1 February 2008 will be the third fee review adjustment
since 2003 and will provide better alignment between licence fees and the costs
associated with the planning and management of the radio spectrum resource,”
said Communications and Information Technology Minister, David Cunliffe.
“The main feature of the changes is a direct adjustment of most licence fees
based on the costs of providing services,this will reduce most of the remaining
cross-subsidisation between or within licence categories. There is no change to
the overall cost of providing spectrum administration services.”
Mr Cunliffe noted that currently fees do not meet the full costs because of the
drawing down of past surpluses. The realignment has been spread over several
years to ease any transition issues.
“Earlier this year stakeholders were asked to provide feedback on three options
for licence fee adjustments. The government’s approach is consistent with the
option most favoured by those who made submissions.”
As well as the move to directly align licence fees to the cost of services provided,
the new regulations also include a ten percent reduction in licence fees for licence
holders who undertake their own interference investigations.
Mr Cunliffe said there will be no changes to the amateur licence fees for
repeaters, beacons and fixed links – but these will be included in a review of the
amateur fees to be commenced in the New Year.
For more information on the new radio and spectrum licence fees go to
www.rsm.govt.nz.
Media Contact: Chris Harrington (021) 227 9067
(04) 914 5067
Background
The changes to radio and spectrum licence fees were agreed by Cabinet as part
of the Radiocommunications Amendment Regulations 2007. The regulations also
include a number of additional amendments including:
 provision for greater security of tenure of radio licences;
 provisions related to interception of radiocommunications;
 a definition of ‘inappropriate receivers’ for VHF-FM broadcasting reception
(band expanders); and
 specification of the fees for an infringement specified by the
Radiocommunications Act in relation to a licence holder failing to notify the
Registrar of a change of name or address.
Questions and answers
1. Why are radio and spectrum licence fees being changed?
The revisions are part of a phased adjustment since 2005 to align radio and
spectrum licence fees to the cost of the services provided by the Ministry of
Economic Development for a particular category of licence. The Ministry is
required to recover costs associated with the planning and management of radio
and spectrum. The aim is better alignment between fees and the costs of
providing services, with no cross-subsidisation between or within licence
categories.
2. What is the basis for fee changes?
Stakeholders were asked to provide feedback on three options for licence fee
adjustments earlier this year. Nineteen submissions were received:
 Option A: direct adjustment of fees based on the unit costs of providing the
relevant service favoured by 47% of respondents;
 Option B: variable adjustment across fee categories favoured by 32% of
respondents;
 Option C: even adjustment across fee categories favoured by 5% of
respondents.
3. What’s happening with amateur fees?
There will continue to be no individual licensing fees for amateurs. There is to be
no change to the fees for the licensing of amateur beacons, repeaters and fixedlink installations pending a further review of amateur licensing arrangements prior
to the next planned review of radio and spectrum licence fees in 2009. It is
expected that the review will commence in early 2008.
4. What is the surplus and how did it arise?
The Memorandum Account was created as a ‘memorandum’ of third party funding
from licence fees. It went into surplus when the fees collected exceeded the
expected costs of providing spectrum management services, which is in part
explained by the Ministry of Economic Development’s management processes
becoming more efficient. Over the past few years the Ministry has reduced the
surplus by not fully recovering the full costs of spectrum management services
provided.
5. What measures can licensees take to reduce their licence fees?
There are three options for licensees to consider:
 A ten percent reduction in fees is being introduced for licensees who
undertake their own interference investigations. This will encourage
independent provision of these services.
 Licensees can also decide whether they want the Ministry of Economic
Development or an external engineer to undertake the certification work for
their licence. The Ministry’s RSM Engineering Certification Fees are only
payable where the Ministry performs the engineering work.
 The ten percent reduction in licence fees for on-line payments made by
credit or debit cards will continue.
6. Why are fees for engineering certification no longer specified in the
regulations?
Fees for engineering certification are being removed from statutory provision
where the Chief Executive of the Ministry of Economic Development is asked to
provide these services. This is because the Ministry of Economic Development is
obliged to recover only the cost of such services under statutory provision and
recovery of only the cost would undercut private provision. The bulk of such
services are now provided privately.
7. What regulatory changes have been made in respect of the security of
tenure of radio licences?
On 25 June 2007, Cabinet agreed to new terms and conditions for the revocation
of radio licences, thereby requiring a five year minimum notice of revocation for
licences but allowing for immediate or short notice (less than five years) of
revocation for specific reasons, but only on the basis that a suitable transition
plan is developed in conjunction with existing users. Such a plan would consider
a range of measures including the availability of alternative spectrum and the
possibility of financial incentives to assist with transition costs.
8. Why has a definition of an inappropriate receiver (for FM broadcasting)
been included in Regulation?
The Radiocommunications Act was recently amended to ensure that
“inappropriate” receivers are not taken into account when planning and certifying
new transmitting licences. These sections of the Act in effect become operative
once the definition is specified.
9. Why is a definition of an “inappropriate” receiver required?
Planning of broadcasting frequencies in New Zealand uses internationally
developed criteria, including the frequency range of 87.5 to 108 MHz. Some
receivers, notably radios in used vehicles imported from Japan, are not suitable
for immediate use in New Zealand as they use the 76 to 90 MHz frequency
range. Even when used with a locally fitted “band expander” they give poorer
performance under certain circumstances. If these poor quality receivers were to
be taken into account the number of transmitting frequencies would be severely
limited, even affecting some existing services.
10. Can “inappropriate” receivers still be used?
Yes. The consumer can still choose any quality and price of receiver they wish,
but if a poorer quality or “inappropriate” receiver is used the consumer is likely to
get poor quality or no reception of some stations in certain circumstances.
Information on the limitations of receivers fitted with “band expanders” is available
on the Ministry’s website www.rsm.govt.nz/cms/resourcelibrary/publications/band-expanders/fm-reception-problems
11. What regulatory changes have been made in respect of specification for
infringement fees?
To give effect to Subsection 24A(1) of the Act an infringement fee of $250 for an
individual or $1,250 in respect of an offence committed by a body corporate for
failure to provide a name or address change, within one month after the change,
to the Registrar. The proposed infringement fees are commensurate with the
lowest penalties applicable to other existing infringement offences.