Digital Television
   

Policy Context

    Government Goals

  1. The Government has set itself a number of high-level goals to guide the general formulation of policies. At least two of these goals are relevant to the subject matter under discussion:
    "To grow an inclusive, innovative economy for the benefit of all"; and

    "To strengthen national identity and uphold the principles of the Treaty of Waitangi".
  2. In broadcasting, and communications more generally, these goals are given effect through the provision of open and competitive markets, and the provision of funding and other support in certain circumstances.

  3. The Government has signalled that it wishes more emphasis to be given to the promotion of New Zealand's national identity through broadcasting, including the promotion of Maori language and culture. This change of emphasis has been reflected in decisions to reset the objectives of Television New Zealand and to adopt a charter, and to strengthen and advance proposals for a Maori television service. Decisions taken by Government to date are not repeated here, but are available from the Minister of Broadcasting's website: /minister/hobbs/index.html.

  4. Recent decisions in relation to the use of the radio spectrum, especially in FM radio broadcasting, also reflect the Government's approach to strengthening national identity.

    Initiatives to Promote the "Knowledge Economy"

  5. The Government has stated its desire to promote the development of a knowledge economy in New Zealand, to provide greater economic and social benefits to all New Zealanders. Electronic commerce and the educational opportunities offered by the internet have an important role to play in this regard.

  6. A well-developed information and communications technology infrastructure is necessary to make the most of these opportunities. There is increasing demand on such infrastructure to support increased data traffic (video, internet, etc) across New Zealand and beyond at high speed. The availability of, and access to, adequate bandwidth is a key input to these future requirements.

  7. In September 2001, the Government adopted the goal "that all New Zealand communities are able to access two-way, high-speed internet services by the end of 2003".

  8. Digital television is linked to this objective because the technologies used to provide television programming are also capable of providing other forms of information content such as graphics, sound, text and voice. It is therefore likely that in the future, "television sets" may instead be regarded as "screens" which receive not only television programmes, but a full range of digitally-delivered services including the internet.

    Regulatory Framework for Broadcasting

  9. Since 1989, there have been no restrictions on who may enter the market to provide broadcasting services in New Zealand. The only government-imposed constraints on commercial broadcasters have been the need to acquire suitable radio spectrum, to comply with provisions of the Commerce Act and to meet programme content standards. In practice, these have not been significant limiting factors, with the possible exception of access to spectrum for radio broadcasting in certain areas.

  10. New Zealand's broadcasting regime is underpinned by three independent bodies:

    • the Broadcasting Standards Authority, which maintains standards of good taste and decency through the exercise of quasi-judicial functions;
    • NZ On Air, which promotes New Zealand identity and culture by helping to fund programmes and related initiatives;
    • Te Mangai Paho, which specifically promotes Maori language and culture through funding assistance.

  11. Since 1989, Television New Zealand has operated as a state-owned enterprise with a commercial focus. The Government has announced that Television New Zealand is to be restructured into a Crown company with the objective of giving effect to its charter while maintaining its commercial performance.

  12. The Government has not made decisions on how Television New Zealand's requirements under the charter will be funded. A discussion of possible implications for NZ On Air can be found in "New Technologies and the Digital Future", a report commissioned by NZ On Air from the New Zealand Broadcasting School and the Christchurch Polytechnic Institute of Technology: http://stage.morsemedia.com/nzonair/pag.cfm?i=459.

    Radio Spectrum Management

  13. A new system for managing the radio spectrum was introduced in 1989 to complement the opening up of broadcasting and telecommunications markets.

    44 As well as traditional administrative licensing, the Radiocommunications Act provides for a scheme of tradable legal rights in relation to radio spectrum. The Act provides a two-tier scheme of rights: nationwide management rights, and geographically-specific spectrum licences.

  14. Only the Crown can create such rights in the first instance, and it is open to the Crown to decide how such rights are to be made available to interested parties.

  15. Consistent with the objective of ensuring that spectrum is held by those who value it the most, thus maximising the value of spectrum to society as a whole, the Government has auctioned rights in commercial demand. These have generally taken the form of management rights, except in radio and television broadcasting where the Crown has auctioned spectrum licences only.

  16. The Crown has reserved radio spectrum for a range of non-commercial broadcasting purposes, including Maori television and regional television. The spectrum concerned has generally been made available either by way of administrative or spectrum licences. It should be noted, however, that in the case of the proposed Maori television service, the Government intends to transfer a management right suitable for a nationwide UHF service, thus giving Maori full discretion over how that service is implemented.

  17. The implications of digital broadcasting for existing commercial broadcasters, and for Maori television and regional television, are discussed further below.

    49 In the recent auction of 2 GHz radio spectrum, the Government decided to limit the amount of spectrum that could be acquired by a single entity at auction and for a period of three years after the auction. The practice of imposing such restrictions as part of the auction process is regularly used in a number of countries including Australia, and may also be used in subsequent auctions in New Zealand.

  18. The Government has considered its policy of what should happen when existing rights expire at the end of their terms, and expects to make announcements on this matter in the new year. The first set of rights to expire will be those held by UHF television broadcasters, followed by those held by commercial telecommunications operators and radio broadcasters. The future of rights at their expiry is clearly of central importance if the allocation of any new rights and associated new investments are to occur in the meantime. This matter is also discussed further below.

  19. Early in 2000, the Government considered and declined a request from Television New Zealand to proceed with a terrestrial digital data network utilising radio spectrum at 12 GHz. The possible allocation of 12 GHz spectrum is discussed below.

    Telecommunications Inquiry

  20. As part of its report, the Ministerial Inquiry into Telecommunications noted the important role that Sky's digital network could play in bringing electronic communications services to remote and low population-density areas. It noted that Sky had an important role in enabling all New Zealanders to have access to broadband services, and that it had every incentive to improve its market penetration to this end.

  21. The Inquiry was not convinced that the pricing of Sky's services should be regulated, opting instead for the development of an approved code of practice allowing industry input into any changes proposed by Sky to its conditional access system.

    Previous Government Decisions

  22. In September 1998, the then Ministry of Commerce issued a discussion paper entitled "Digital Terrestrial Television: Spectrum Allocation Options" (DP13). This focussed on radio spectrum issues in general, and digital terrestrial television in particular.

  23. The previous Government subsequently decided that:

    • an auction of UHF spectrum suitable for digital television would be held at the earliest opportunity (timing was contingent on the 2 GHz auction);
    • spectrum would be reserved from the auction, "sufficient" to permit free to air broadcasters to "simulcast" existing analogue services in a digital format;
    • this reserved spectrum would be made available to free to air broadcasters on a shared basis to conserve the amount of spectrum required;
    • a resource rental based on prices realised at auction would be payable for the reserved spectrum;
    • special limits on how much spectrum could be acquired in the auction were not needed, i.e. normal Commerce Act rules would apply.


  
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