RESTRICTED
GENERAL AGREEMENT S/NGBT/W/3/Add.2
3October 1994
ONTRADE INSERVICES (94-1985)
Negotiating Group onBasic Telecommunications Original: English
COMMUNICATION FROM NEW ZEALAND
Response toQuestionnaire on
Basic Telecommunications
Theattached communication iscirculated attherequest ofNewZealand tomembers ofthe
Negotiating Group onBasic Telecommunications.S/NGBT/W/3/Add.2
Page2
PART I
Definition andMarket Structure
Definition
1. InNewZealand, nodistinction ismade between basic telecommunications andvalue-added
services.
2. TheNewZealand regulatory regime doesdistinguish between networks (facilities) andservices
indefining basic telecommunications. Under theTelecommunications Act1987particular rights and
powers areconveyed tonetwork operators whoestablish andmaintain facilities to10ormore persons
(corporate orindividual) bylines. These powers include rights ofaccess toestablish andmaintain
networks e.g.laycables onthestreet andenter private property tomaintain networks. Section 2A
oftheTelecommunications Act1987(asamended bytheTelecommunications Amendment Act1988,
andfurther amended bySection 86oftheBroadcasting Act1989) provides astatutory process whereby
under anOrder inCouncil, companies providing either telecommunications services between 10or
more persons, orbroadcasting services bylines, tomore than500persons, maybedeclared anetwork
operator. Thepurpose ofthisprocedure istoassist companies providing these services whorequire
access toland, particularly theroadreserve, tolaycables ortoconstruct lines. Itisnotessential to
bedesignated asanetwork operator tolaycables ortoconstruct linesortoprovide atelecommunications
service. NewZealand doesnotlicense telecommunications services providers.
3. NotApplicable (NA), because there isnonational definition ofbasic services.
Market structure
4. There arenobasic telecommunications subsectors orcategories which arereserved tosupply
bymonopoly orexclusive supplier(s).
5. TheNewZealand regulatory regime doesnotdesignate monopoly/exclusive suppliers tosupply
anybasic telecommunications nationally, onageographical basis, orforparticular market segments.
6. Foreignequityparticipationispermitted,withonlyoneminorlimitation.WhentheGovernment
solditsshareholding intheTelecom Corporation ofNewZealand (TCNZ) toprivate sector interests,
itsetcertain conditions forthesaleofTCNZ. These conditions included aceiling of49.9percent
ontheshareholding ofanysingle foreign shareholder inTCNZ. (The total combined foreign
shareholding inTCNZ isactually greater than49.9percent.)
7. (a) NA. TheNewZealand regulatory regime permits competition.
(b) NA. TheNewZealand regulatory regime permits competition.
8. TheNewZealand Government hasnotentered intoanyintergovernmental agreements relating
tothesupply ofbasic telecommunications except INTELSAT. TheNewZealand Government isa
Party totheINTELSAT Agreement (andisrepresented bytheMinistry ofCommerce). Under the
provisions oftheAgreement, eachParty mustdesignate anentity toactasSignatory totheOperating
Agreement andtotakeresponsibility forfinancial andoperational matters. TheGovernment has
designated Telecom asSignatory totheINTELSAT Operating Agreement. Telecom hasownership
shares inINTELSAT.S/NGBT/W/3/Add.2
Page3
PART II
Competition
(i) Overview
Forallsubsectors andcategories oftelecommunications, theNewZealand Government has
stated thatitsobjective istoestablish andmaintain efficient markets intelecommunications goods and
services. Tothisend,ithasadopted policies andpromoted statutory measures tofacilitate competitive
entry intothose markets, andtomaintain theappropriate conditions foreffective competition. The
Government 'sview isthatcompetition isthebestregulator oftelecommunications markets inNew
Zealand. Foreign suppliers canparticipate inthesupply ofbasic telecommunications inallsubsectors
andcategories. The principal measures which comprise theregulatory environment for
telecommunications include:
Competition legislation
TheCommerce Act1986
TheCommerce Amendment Act1990
NewZealand maintains noindustry-specific regulation forentry intothemarket forsupplying
oftelecommunications goods orservices. Instead reliance isplaced ontheCommerce Actwhich is
thegeneral lawofcompetition inNewZealand. TheCommerce Actistheprimary statutory instrument
through which conditions ofeffective competition intelecommunications aresecured. TheCommerce
Actisenforced byanindependent statutory body, theCommerce Commission.
Telecommunications legislation
TheTelecommunications Act1987
TheTelecommunications Amendment Act1988
TheTelecommunications Amendment Act1990
TheTelecommunications Amendment Act1994
TheTelecommunications (International Services) Regulations 1989
TheTelecommunications (Disclosure) Regulations 1990
TheTelecommunications (Disclosure) Regulations 1990, Amendment No.1
Restrictions ontheprovision oftelecommunications goods andservices havebeenprogressively
abolished since 1987. This was completely implemented bythepassage ofthe
TelecommunicationsAct1987(providing,interalia,forthephasedrelaxationofrestrictionsoncustomer
premises equipment) and,thecommencement oftheTelecommunications Amendment Act1988,
(removing restrictions onthesupply oftelecommunications services ofallkinds) by1April 1989.
Theremaining provisions oftheActrelate tothepromotion ofconditions tocontribute tocompetition
inrespect ofaccess toland, andregulatory powers withrespect tointernational telecommunications
services. TheTelecommunications Amendment Act1990established regulation making powers used
toestablish information disclosure requirements onTelecom, withthepurpose offacilitating effective
competition.
Radiocommunications legislation
TheRadiocommunications Act1989
TheRadiocommunications (Radio) Regulations 1993S/NGBT/W/3/Add.2
Page4
Fairtrading andconsumer legislation
TheFairTrading Act1986
TheFairTrading Amendment Act1990
OtherlegislationwhichindirectlyaffectstelecommunicationsincludestheBroadcastingAct1989,
andthePrivacy Act1993.
Theabove legislation withtheexception ofthePrivacy Act,isadministered intheNewZealand
Ministry ofCommerce, Wellington. Theregulatory environment isalsoaffected bycertain obligations
associated withtheprivatization oftheTelecom Corporation ofNewZealand Limited (seequestion 7)
andobligations arising from international agreements towhich NewZealand isaparty.
(ii) There arenorequirements, conditions, orlimitations applied inanysubsector orcategory which
relate tothelisted modes ofsupply.
(iii) Nolimitations onmarket access areapplied inanysubsector orcategory.
(iv) There arenolimitations onnational treatment specific tothetelecommunications sector apart
fromrequirements under theArticles ofAssociation ofTelecom thattheshareholding ofany
single foreign entity islimited to49.9percentoftheCorporation, andthattheBoard of
Directors ofTCNZ comprises atleast50percentofNewZealand citizens.
Local/long distance/international
1. Thedistinction between localanddomestic longdistance isdistinguished bynetwork operators
aspartoftheirtariff andengineering policies. Alongdistance callisdefined asacallbetween any
twodistinct localcalling areas.
2. Registration under theTelecommunications (International Services) Regulations isrequired
bypersons whoestablish, operate ormaintain facilities inNewZealand forthepurpose ofproviding
toother persons inNewZealand (pursuant toanagreement orarrangement withanoverseas operator)
either public switched telecommunications services orleased circuits toorfrom territories outside
NewZealand. Revision oftheregulations (tomove toalessprescriptive regime) isexpected inlate
1994 orearly 1995.
Wire-based/radio-based
Whether theprovision oftelecommunications services iswireorradio-based isnotarelevant
issueinterms oftheNewZealand regulatory regime. From atopographic pointofview, NewZealand
utilises bothlonghaul microwave andfibreoptics. While there islittleuseofsatellite technology for
domestic telecommunications purposes, theNewZealand regime would havenodifficulty subject to
theconditions outlined intheattached public information bulletin -PIB17andnormal ITU
earth station/terrestrial coordination.
Somefrequencybandssuchascellular,UHFtelevisionandMDSmultipointdistributionsystems
havebeenplaced under themanagement rights regime (detailed inPIB17).Other spectrum isallocated
onthebasis ofradio apparatus licence (detailed inPIB17).
Resale basis
3. Existing regulations require anycompany using leased circuits toprovide international
telecommunications services tocomply withthesamecontractual terms andconditions asanyoperatorS/NGBT/W/3/Add.2
Page5
providing switched services. Indraftrevised regulations (seequestion 2),public switched services
andthose provided overleased circuits willbedistinguished. Under thedraftregulations, providers
ofpublic switched services would begranted automatic registration providing certain formalities were
observed. Providers ofservices supported byleased circuits interconnected atbothendswould have
theirapplications vetted onthebasisofcertain criteria onequivalence andimpact ontelecommunications
users inNewZealand. However, applications inrespect ofroutes onwhich international simple resale
isgenerally entertained (Australia, Canada, UK,USA) would bedeemed tomeetsuchcriteria. This
represents aunilateral move byNewZealand toliberalize resale, asitisnotbased onreciprocity, except
inthecaseofAustralia.
4. Theresale ofprivate leased circuit excess capacity ispermitted onacommercially negotiated
basis.
Facilities based
5. Basic telecommunications suppliers (foreign anddomestic) canconstruct andoperate theirown
networks orinvest inconsortia toconstruct andoperate suchfacilities. NewZealand doesnotrequire
licences toconstruct/operate facilities.
Public/non-public supply
6. TheNew Zealand regime makes nodistinction between suppliers ofpublic switched and
non-public basic telecommunications.
7. Theprovisions oftheKiwi Share require TCNZ tomaintain itsnetwork asextensively asit
wason11September 1990when theGovernment solditsentire 100percentshareholding inTelecom
toprivate sector interests. TCNZ must comply withobligations inrespect ofresidential services.
These obligations wereincluded bytheGovernment intheArticles ofAssociation ofthecorporation,
andprovide forthefollowing commitments:
- localfreecalling willremain atariff option available toallresidential customers;
- theStandard Residential Rental (i.e.theaccess charge) foraphone linewillnotrise
faster thanmovements intheConsumer Price Index, unless theprofits ofTelecom 's
Regional Operating Companies areunreasonably impaired; and
- phone linerentals forresidential customers inruralareas willnotbehigher thanthe
standard rental inthecities, andtheresidential service willremain aswidely available
asitwasatthetimeofthesale.
8. TheNewZealand regime makes nodistinction between apublic ornon-public basis forthe
provision ofbasic telecommunications.
9. Except fortheKiwi Share requirements relating totheresidential services ofTelecom, no
obligations orresponsibilities areimposed onpublic basic telecommunications carriers.
10. There arenorestrictions onorganizing orproviding andoffering private networks by
telecommunications suppliers.
11. Theoperation ofpublic payphones isnotreserved tomonopoly orexclusive suppliers.S/NGBT/W/3/Add.2
Page6
PART III
Regulatory Issues
Relationship between regulatory andoperational functions
1. Basic telecommunications suppliers arenotdirectly involved inmaking regulatory policy, but
theyareinvolved informulating andenforcing standards fortheirownnetworks. Theyarealsoinvolved
intheactivities oftheTelecommunication Standardization Sector oftheITU, tovarying extents, e.g.
through attendance atmeetings, andconsultation bytheMinistry ofCommerce onRecommendations.
2. New Zealand doesnothaveatelecommunications specific regulatory authority. Network
operators formulate andenforce theirowntelecommunications standards. However, electrical safety
standards aredetermined bytheMinistry ofCommerce. Radio communication equipment usedin
telecommunications must alsomeetstandards tosafeguard against radio interference: thestandards
aresetandenforced bytheMinistry ofCommerce. Industry members alsoparticipate inanational
telecommunications standard committee coordinated bytheStandards Association ofNewZealand,
andintheactivities oftheTelecommunication Standardization andRadiocommunication Sectors of
theITU.
3. Only onelevel ofgovernment (thenational level) hasresponsibility forregulation affecting
basictelecommunications.TheresponsibleauthorityistheMinistryofCommerce.Thereareprocedures
enabling suppliers toresolve questions ordisputes theymayhaveortoappeal adecision withthe
regulatory bodyconcerned. These areprimarily under general competition legislation (especially the
Commerce Act)andcaninvolve either direct action inthecourts orthelodging ofacomplaint with
theCommerce Commission (theenforcement agency fortheCommerce Act.) Inaddition, anyaction
ofallgovernment agencies canbethesubject ofanaction forjudicial review.
Frequency allotment orassignment
4. TheRadiocommunications Act1989 introduced fundamental reforms tothemanagement of
theNewZealand radio spectrum inorder tofacilitate competitive entry intelecommunications and
broadcasting, aswellastopromote efficiency inspectrum management. Provision ismade intheAct
fortheestablishment ofmanagement rights ofupto20years andsubordinate licences inthename
oftheSecretary ofCommerce andfortransfers andsubdivisions ofsuchrights. ItistheGovernment 's
general policy thatwhere thedemand forsuchrights orlicences exists, supply ofthose rights will
betendered. TheMinistry ofCommerce hasaprogramme ofplanning andcreating management rights
and,where necessary, arranging tendering ofthose rights (subject toanyGovernment policy decisions).
Acquisition, ordisposition, ofamanagement rightisdeemed tobeanacquisition, ordisposition, in
terms oftheCommerce Actandtherequirements ofthemergers andtakeovers provision ofPartIII
oftheActapply.
Rights tocellular telephone frequencies weretendered in1990. Thesuccessful bidders were
required toobtain Commerce Commission clearance before uplifting therights. Telecom enjoyed
incumbency rights tooneofthebands, andthree further bands were offered fortender. BellSouth
NewZealand Ltdsuccessfully secured therights toonefrequency band, andTelecom acquired the
rights toanother. Athirdrightwasretendered in1993, andTelstra (New Zealand) Limited secured
it.Telecom operate ananalogue AMPS cellular service, andhasintroduced adigital AMPS cellular
service, while BellSouth isoffering adigital GSM service. Telstra isalsoplanning tooffer aGSM
service.
TheMinistry ofCommerce isalsoplanning totender radiofrequencies forlandmobile services.
Licensing ofavariety ofother telecommunications service applications isadministered flexibly byS/NGBT/W/3/Add.2
Page7
theMinistry. Certain equipment standards restrictions aremaintained inorder tominimise radio
interference. (Foradditional information, please seeBrochure PIB17attached).
5. Foreign telecommunications suppliers, provided theyareaNewZealand based corporate entity,
doreceive national treatment under these procedures andcriteria.
Numbering andidentification costs
6. TheNewZealandTelecommunicationsNumberingAdvisoryGroup(NZTNAG)wasestablished
in1993. Thisadvisory Group provides aforum forrepresentatives ofnetwork operators, users, and
theMinistry ofCommerce. Itischaired bytheMinistry, which alsoprovides theSecretariat.
Membership isvoluntary andagreement onmeasures isbyconsensus.
Members ofthisGroup havereached agreement onprocedures fortheallocation ofaccess
codes, local service 9XY number blocks and0800 ABnumber blocks. These procedures arenow
inplace. Thegroup hasidentified further numbering issues which needtoberesolved andisworking
onthem.TheNZTNAGhasbeeneffectiveinresolvingtelecommunicationsnumberingissuesofconcern
tomembers inanefficient andeffective manner andthere isconsidered tobenojustification for
considering amore interventionist mechanism.
7. Foreign telecommunications suppliers, provided theyareaNewZealand based corporate entity,
doreceive national treatment under these procedures andcriteria.
Standards, typeapproval andequipment attachment
8. Therearenomandatorystandardsinplacewithrespecttotelecommunicationswiththeexception
ofelectrical safety standards andradio communications standards tosafeguard against interference.
Standardsfortelecommunicationsterminalequipmentaredeterminedbytheindividualnetworkoperators.
9. Ifastandard isunder review oranewstandard isbeing developed, there isanopportunity
forpublic review andcomment priortoitsadoption. Foreign entities mayparticipate inthisprocess.
Theprivate sector canparticipate inthedevelopment ofstandards through theTelecommunications
Subcommittee ofStandards NewZealand. Telecom operates anextensive public consultation process
foritsownnetwork standards, issuing consultative documents indraftformandinviting public comment
from bothlocalandforeign entities.
10. Allterminal equipment issubject totypeapproval withthenetwork operator. Radio equipment
issubject toMinistry ofCommerce approval toensure thatitdoesnotcause interference. Self
certificationfollowedby"LimitedPermit"trialwherebyanumberofinstallationsareallowedtoproceed,
isusedonlyformore complex equipment (e.g.PABXs etc.)where testfacilities arelimited. Allother
equipment must betested byatesting authority accredited bythenetwork operator.
NewZealanddoesnothaveanymutualrecognitionagreementsatpresent,althoughanagreement
formutual recognition oftelecommunications terminal equipment andelectromagnetic compatibility
isunder negotiation between theEuropean Union andNewZealand.
11. Theability toattach terminal equipment tothenetwork isregulated bythenetwork operators
themselves. Section 6oftheTelecommunications Act1987 states that"Noperson shall, without the
agreement ofthenetwork operator, connect anyadditional line,apparatus orequipment toanypart
ofanetwork owned bythatoperator". Forexample, TCNZ operates aPermit toConnect programme
under which anyone seeking toprovide telecommunications equipment forconnection totheTCNZ
network mustgainitsprior approval. Thisprogramme isdesigned tocheck safety andcompatibility
features ofequipment. Thisprogramme hasgained widespread acceptance fromtheindustry andfromS/NGBT/W/3/Add.2
Page8
thepublic. Theoperation ofthisprogramme andallotherTCNZ activities aresubject totheCommerce
andFairTrading Acts.
12. Basic telecommunications suppliers connected tothepublic network canusetheirownswitches
provided theymeettheinterface requirements ofthenetwork operator.
13. Theprovision ofTTEisderegulated inNZandsuchequipment maybeprovided bythenetwork
operator orthecustomer subject totypeapproval bythenetwork operator.
Interconnection
14. Interconnection isthekeyissue inthedevelopment ofcompetition inNew Zealand. The
Government doesnotpromote industry-specific intervention butplaces reliance onfairinterconnection
agreements being negotiated between Telecom andfirms seeing tosupply telecommunications services.
TheGovernment monitors thedevelopment ofthesearrangements, andhasstated thatiftheconditions
forcompetitive entry areunnecessarily impeded itwillconsider theintroduction offurther measures.
Assuch, interconnection isnegotiated directly between network operators (principally between TCNZ
andotherparties), subject totherequirements ofNewZealand 'scompetition law.There arenospecific
regulations applied, however, under theTelecommunications (Disclosure) Regulations 1990, TCNZ
isrequired topublish theactual interconnection agreements ithasentered into.
15. TCNZ anditssubsidiaries asoperators oftheprincipal PSTN arerequired toprovide
interconnection onfairandreasonable terms toother basic telecommunications network orservice
suppliers.
16. Interconnection between leased circuits andpublic datanetworks ispermitted.
17. There arenogovernment rulesandregulations regarding thepricing ofinterconnection. Prices
forinterconnection arenegotiated between network operators, subject totheprovisions ofgeneral
competition legislation. There is,however, amajor setofcourt proceedings examining thevarious
recommendations onwhich principles should beadopted forlocalaccess interconnection. Ajudgement
isexpected laterthisyear. Theprinciples upheld maybeextended toother forms ofinterconnection
where appropriate. There isnorequirement toreferinterconnection charges toaregulatory bodyfor
approval.
These charges arerequired tobeinthepublic domain under therequirements ofthe
Telecommunications (Disclosure) Regulations 1990. Following areview conducted bytheMinistry
ofCommerce, theRegulations wereamended inDecember 1993. TCNZ isnowobliged todisclose
allinterconnection agreements withother parties, including itsownsubsidiaries. Inaddition, Telecom
isrequired topublish separate financial statements foritsprincipal operating subsidiary,
Telecom NewZealand Limited. Previously, TCNZ wasrequired tosupply details ofinterconnection
agreements totheMinistry ofCommerce onrequest. Interconnection charges arenegotiated ona
case-by-case basis, however, thesame charges maybecharged forthesame service.
Competitive safeguards
18. Thesafeguards theNewZealand regime hasagainst theanti-competitive practices ofmonopolies
etc.iscovered under general competition law. PartIIoftheCommerce Actincludes prohibitions on
contracts,arrangementsandunderstandingsthatsubstantiallylessencompetition,exclusionaryprovisions,
price fixing, resale price maintenance andtheuseofadominant position inamarket forthepurpose
ofrestricting, preventing ordeterring entry oreliminating aperson from amarket. PartIIIrelates
tomergers andtakeovers. Theobjective istoprevent anybusiness acquisition which results inaperson
acquiring orstrengthening adominant position inamarket, unless thatbusiness acquisition canbeS/NGBT/W/3/Add.2
Page9
justified interms ofpublic benefit. PartIVoftheCommerce Actmakes provision fortheimposition
ofpricecontrol generally, oronparticular firms orevenspecific products andservices, incircumstances
where theMinister ofCommerce issatisfied thatconditions ofeffective competition donotexistand
control isnecessary toprotect users, orconsumers, or,asthecasemaybe,suppliers. Itisthe
Government'sgeneralpolicynottointroducepricecontrol,norhastheMinisterofCommerceannounced
thedetailedcircumstancesinwhichcontrolwouldbeconsideredinrelationtotelecommunicationsprices.
TCNZ isalsorequired under theTelecommunications (Disclosure) Regulations todisclose
theprices, terms andconditions ofcertain prescribed services andthefinancial statements ofitsprincipal
operating subsidiary.
19. TheNewZealand regulations dodistinguish between dominant andnon-dominant suppliers.
Section 36oftheCommerce Act1986refers totheuseofdominant position inamarket: "Noperson
whohasadominant position inamarket shallusethatposition forthepurpose ofrestricting theentry
ofanyperson intothatoranyother market; orpreventing ordeterring anyperson from engaging
incompetitive conduct inthatorinanyother market; oreliminating ordeterring anyperson from
engaging incompetitive conduct inthatorinanyother market."
Therearesafeguardsconcerningsupplierswhohavedominantcontrolofaccesstocertainmarket
ornetwork segments intherespect thattheTelecommunications (Disclosure) Regulations onlyapply
toTCNZ fortheprescribed services untilthereiseffective competition inanyparticular market segment.
20. NewZealand doeshaveanantitrust policy butitisnotspecific totelecommunications. PartIII
oftheCommerce Actrelates tomergers ortakeovers. Theobjective istoprevent anybusiness
acquisition which results inaperson acquiring orstrengthening adominant position inamarket, unless
thatbusiness acquisition canbejustified interms ofpublic benefit. Acquiring orstrengthening a
dominant position inamarket reduces competition anddisadvantages consumers. Clear public benefits
arerequired tooutweigh these disadvantages. Theregime includes offence andremedy provisions
aimed atencouraging thepriorclearance orauthorization ofallmergers thatraisecompetition issues.
21. There arenorestrictions onbasic telecommunications suppliers whoalsoareengaged in
manufacturing.
Pricing related measures
22. Ingeneral, theGovernment isnotinvolved inthespecific regulation ofprices, theyareset
according tonormal commercial practices. There arehowever twoexceptions tothis. Firstly, under
theTelecommunications (International Services) Regulations 1989theGovernment doesrequire parallel
accounting ratesbetween operators, although theSecretary oftheCommerce doeshaveadiscretion
towaivethisrequirementundercertaincircumstances.Secondly,undertheprovisionsoftheKiwiShare,
TCNZ maynotincrease itsresidential rentals inrealterms from November 1989 unless itsoverall
profitability isunreasonably impaired.
TheCommerce Actcontains prohibitions onpractices thatsubstantially lessen competition.
23. TheGovernment doesnotrequire tariff approval ornotification. Norequirements regarding
cost-accounting areinplace.
24. ThepartiescanstructuretariffpracticesastheywishsubjecttotherequirementsoftheCommerce
Actandnormal commercial practices. NewZealand 'stwolargest carriers bothoffer discounts on
such factors ascallvolumes andcallduration. Under theTelecommunications (Disclosure)
Regulations 1990, TCNZ isrequired todisclose theprinciples usedinitssetting ofdiscounts, and
theactual level ofdiscounts oncertain prescribed services, where theyrepresent more than10perS/NGBT/W/3/Add.2
Page10
centofthestandard price. Accounting ratesaresetbycommercial negotiation andarenotapplied
inadiscriminatory fashion between countries.
25. Basic telecommunications suppliers arenotinvolved insetting industry widetariffs.
26. Prices aredetermined bysupply anddemand bywayofnormal commercial negotiation and
aresubject toalltherequirements oftheCommerce Act.
27. There arenorules specific tothepricing ofanewservice.
Rights ofwayfortheconstruction ofinfrastructure
28. Basic telecommunications services suppliers arepermitted tobuild theirowninfrastructure
orfacilities. They arerequired toobtain thelanduseplanning consents oftheterritorial andlocal
government authorities. Inaddition, under theTelecommunications Act1987, anetwork supplier may
bedesignated asanetwork operator andthisconveys certain powers toestablish andmaintain
telecommunications networks. These powers include rights ofaccess toestablish andmaintain networks
e.g.laycables onthestreet andenter private property tomaintain networks. Section 2AoftheAct
provides astatutory process whereby under anOrder inCouncil, companies maybedeclared anetwork
operator. Thisassists companies providing telecommunications services whorequire access toland
particularly theroadreserve, tolaycables orconstruct lines.
29. National treatment isextended toforeign basic telecommunications suppliers under these
procedures andcriteria provided theyareaNewZealand based corporate entity.
Newtelecommunications services
30. There arenorestrictions ontheintroduction ofnewtelecommunications services.
31. AstheNewZealand regulatory regime makes nodistinction between basic orvalue-added
services, determining whether anewservice isabasic orvalue-added service isnotnecessary.S/NGBT/W/3/Add.2
Page11
PUBLIC INFORMATION BROCHURE
TheRadiocommunications Act1989
IMPORTANT NOTICE
Thenatureofradiospectrummanagementissuchthattheinformationcontainedinthisdocument
issubject tochange without notice. TheCrown doesnotaccept anyliability fordamage orlossarising
from reliance onanyinformation contained inthisdocument. Interested persons should consult the
nearest Field Office ofRadio Operations, Ministry ofCommerce, forfurther information.
TheRadiocommunications Act1989 provides for:
1. Aregimeforregulatingthetransmissionandreceptionofradiowavesbasedontradeable
spectrum rights; and
2. Continuation oftheestablished administrative "radio apparatus" licensing system for
regulating those frequencies where spectrum rights havenotbeencreated; and
3. Qualifyingapparatuslicenceholderstobegrantedan"incumbent"licencewhenspectrum
istransferred from theadministrative system tothespectrum rights regime.
Spectrum rights
A"management right" toarange offrequencies (i.e.frequency "band") entitles theowner
ofthatright, known asthemanager, toissue "licences" either authorizing persons totransmit radio
waves ortoensure specified levels ofinterference arenotexceeded.
Amanagement righttoanybandcanonlybecreated bytheSecretary ofCommerce whomay
theneither dispose oftheright, orissue licences inaccordance withit.Itisthepresent policy of
Government todispose ofmanagement rights, orlicences where theCrown retains themanagement
right, bywayofpublic tender.
COMMUNICATIONS DIVISION -RADIO OPERATIONS
Westrive toprovide thebestRadio Spectrum environment forNewZealand
Head Office: Ministry ofCommerce Building, 33Bowen Street, P.O.Box2847, Wellington,
NewZealand. Telephone 0-4-472 0030. Fax0-4-473 2489S/NGBT/W/3/Add.2
Page12
Thetender process isintended toallow therelevant spectrum tobeallocated totheparty that
places themostvalue onit,andtoavoid theneedtomake comparative andsubjective judgements on
persons ortheirintended useofspectrum. Akeycharacteristic ofmanagement rights isthattheycarry
withthemnorequirement thatlimits usetoanyspecific telecommunication orbroadcasting application.
While licences maybecreated byamanager foranypurpose, inpractice anumber offactors
constrain theextent towhich thismayberealisable, including established international markets and
themanner inwhich spectrum isinitially sub-divided intomanagement rights. However, while the
Actalsomakes provision forspectrum rights tobetraded andre-configured tosuittheneeds of
managers, theMinistry would prefer toinitially create rights inaform favoured bythemajority of
interested parties.
TothisendtheMinistry, from timetotime, invites public submissions onthemanagement
ofcertain frequency bands, especially anyproposals tobring suchbands under thespectrum rights
regime. These invitations tomake submissions donotconstitute acommitment bytheSecretary of
Commerce togrant anyradio apparatus licences orcreate, tender orotherwise dispose ofany
management rights orlicences, orotherwise actupon anysubmission made. Further, anydecision
tocreate spectrum rights restswithGovernment andnottheMinistry. TheMinistry 'sobjective is
toreport theresults ofitsinquiries andconsultations toGovernment.
Itshould alsobenoted thatwhere anymanagement rights arecreated, thelicensee inrespect
ofexisting frequency usage which qualifies under PartXVIoftheRadiocommunications Act1989,
willbeentitled tobegranted an"incumbent" licence inaccordance withtheconditions specified in
theAct. TheMinistry recommends thataffected parties seeklegaladvice onthese provisions.
Radio apparatus licences
Inrespect ofradio frequencies where nomanagement rights havebeencreated, theSecretary
ofCommerce isresponsible, under theRadiocommunication (Radio) Regulations 1993, forthegranting
oflicences, orexemptions from licensing, ofallradio apparatus. Inexercising thisauthority the
Secretary isrequired, under Regulation 15,tohaveregard to:
• international treaty obligations; and
• public interest inreceiving maximum benefit from theradio spectrum; and
• technical compatibility withexisting licences.
Inaddition, under Section 112oftheRadiocommunications Act1989, theSecretary ofCommerce
isalsorequired tohaveregard tothegeneral policies oftheGovernment when granting apparatus
licences. Such policies arecommunicated totheSecretary ofCommerce bytheMinister of
Communications, andpublished intheGazette.
Tovarying degrees anumber ofradio services require international coordination inboth
operational andspectrum matters, forexample maritime, aeronautical, astronomy, navigation, satellite,
meteorological andamateur. This isachieved through avariety oforganizations especially the
International Telecommunications Union (ITU) ofwhich New Zealand isatreaty member. This
United Nations agency isprimarily responsible fortheallocation ofradio services tospecific bands,
andmember States arerequired torecognize these provisions when licensing frequencies within their
national boundaries.S/NGBT/W/3/Add.2
Page13
Theextent towhich different radio usescanshare thesame spectrum, oroccupy adjacent
spectrum,dependsonawiderangeoftechnicalconsiderations.Thereforetoachievemaximumutilization
ofspectrum andminimize potential interference between uses, itisrecognized international practice
tolicence radio services inaccordance withpre-arranged channelling plans. Suchplans usually evolve
overtimeinresponse tochanging technology andtrends intelecommunications. Inconsidering licence
applications fornewusesofabandtheMinistry mustbalance theinvestment made byexisting licensees,
andtheirreasonable expectations foradditional licences within theband, against theoverall benefits
tosociety from theintroduction ofnewtelecommunication technologies. Thetwomost significant
considerations inthisregard arethedegree oftechnical compatibility between theexisting usesand
proposed newuse,andcurrent international practice. Insome circumstances theMinistry mayseek
public comment onvarious options which mayinclude tendering ofmanagement rights orlicences.
Although radio apparatus licences areusually granted foramaximum period of12months,
andmayberevoked ormodified bytheSecretary atanytime, itisnormal practice forlicensees to
beoffered renewal onthepayment ofanannual licence fee.While suchfeesareonlyintended torecover
thecosts ofmanaging thespectrum inaccordance withtheobjectives outlined above, incentives to
maximize spectrum utilization areincorporated insome feecategories.
Radio spectrum management policies ofGovernment
Itisthegeneral policy ofGovernment topromote aneffective andefficient competitive
environment forthedelivery ofcommercial telecommunication andbroadcasting services thathave
radio spectrum asakeyinput.
Onbehalf ofGovernment itistheresponsibility oftheMinistry ofCommerce to:
1. Createspectrumrightsinfrequencybandsidentifiedwithcommercialtelecommunication
services (notably fixed, mobile andbroadcasting) where demand exceeds supply, then
allocate such rights primarily bywayofpublic tender toavoid comparative and
subjective judgments onpersons andintended use.
2. Manage frequency bands internationally allocated andcoordinated (notably distress,
maritime,aeronautical,navigation,astronomy,space,scientificresearch,meteorological
andamateur) inamanner consistent withNewZealand treaty obligations.
3. MakeadequatespectrumprovisionstomeetGovernmentpolicyobjectivesincommunity
(non-commercial) andMaori broadcasting, andpublic safety andsecurity services.
4. Make reasonable spectrum provisions, consistent withinternational practice, forgeneral
public access without arequirement forindividual licences (for example
Citizen Radio Service, radiomodel control, automatic garage dooropeners, microwave
ovens, diathermy, etc.).
5. Foster public discussion andinput onthedevelopment ofmanagement policies forthe
various radio spectrum bands.
6. Todevelop andmaintain alegislative framework thatisefficient andeffective in:
•Accommodating newtechnologies.
•International coordination requirements.S/NGBT/W/3/Add.2
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•Administrative processes.
•Management ofinterference issues.
•Compliance withallexplicit andimplicit international treaty obligations.
Communications Division
WELLINGTON
May1994 (Issue 4)