Spectrum licensing and management rights

The Radiocommunications Act 1989 provides for the creation of tradable, fixed-term rights over parts of the radio spectrum. These are known as management rights.

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Management rights and spectrum licences

Management rights and spectrum licences have attributes similar to property rights, in that they:

  • have legal certainty
  • can be traded, and
  • can be mortgaged and placed under caveats.

Management rights

Management rights cover a block of the radio spectrum. They give whoever holds them the right to issue licences for the use of that part of the spectrum. Management rights themselves don’t confer the right to make any transmissions.

The Crown creates management rights and spectrum licences for a range of different types of spectrum.

Management rights intended for commercial use are allocated through a competitive tender or auction. This is considered to be the best way to make sure that rights are held by those who value them the most. After the initial allocation of spectrum by the government, spectrum rights can be freely traded. Management right holders may chose to trade their rights to third parties, like other businesses for example.

The Crown may choose to:

  • keep some management rights and grant spectrum licences to frequencies within the band, or
  • allocate the management right to another person, who may then grant spectrum licences.

The Crown has kept management rights for spectrum suitable for broadcasting. It has also reserved some frequencies to meet public policy objectives.

Example

For example, spectrum suitable for telecommunications is structured by way of management rights, nearly all of which are held privately. Management rights used for cellular and fixed broadband wireless services have been sold to service providers. They licence themselves to use the frequencies within their management rights. They can also licence third parties.

Spectrum licences

Spectrum licences are granted by the owner of a management right and are typically:

  • assigned for a defined period of time
  • non-specific to equipment or transmission methods.

The licence holder is free to operate within the relevant frequencies at their discretion.

There are 3 types of spectrum licences.

  1. A licence to transmit radio waves and have no interference. This is the most common type of spectrum licence. It grants the right to:
    • transmit on a specified frequency, and
    • stop others transmitting interfering signals on the same frequency.
  2. A licence to have no interference on a specified frequency.
  3. A licence to transmit emissions without protection from interference.

Examples

Examples of spectrum licences include:

  • broadcasting licences, like FM or AM radio or digital television
  • 3G and 4G cellular licences
  • Managed Spectrum Park licences.

Spectrum licences are valid only once they’ve been recorded in the Register of Radio Frequencies (RRF).

When management rights expire

Commercial management rights are typically reallocated to the existing rightholder 5 years before they expire, for up to 20 years.

This is subject to a review — on a case-by-case basis — to ensure consistency with:

  • New Zealand's international radio obligations, and
  • RSM’s general objective of maximising the value of the spectrum to society as a whole.

Management rights are reallocated at a price that’s determined by a formula used to estimate their current market value. If the existing rightholder doesn’t want to pay this price the rights will be auctioned off to a new rightholder.