Good afternoon everybody. I'm pleased to be here today - it's good to have an opportunity to engage with inquiring minds, particularly the minds of those who will play a role in the future of New Zealand's broadcasting.

I am very pleased to be Minister of Broadcasting - it's a dynamic, rapidly- evolving sector and I enjoyed learning about it during my two years as Opposition spokesperson. Now I have a chance to put things in place - and to play some part in creating the broadcasting environment you will enter when you graduate.

I would like to give you some idea of the government's plans for broadcasting, what we are trying to achieve, and how we are going about it.

The professional skills you are acquiring will be an important factor in getting your first jobs in broadcasting. Today I will discuss two other aspects which will also impact on your careers - government policy and our plans for the digital environment. I understand most of you here are radio students, so I will focus primarily on this area.

Government policy

This government's objectives in broadcasting are consistent with our general policy objectives for New Zealand.

We are committed to maintaining state ownership of Television New Zealand, to continuing support for Māori Television, and to continuing funding for Radio New Zealand, National Pacific Radio Trust, and Access Radio; and the existing funding commitment to TVNZ 6 and 7.

We want value for money from our public broadcasters, and we want to fund great content - hence our decision to use the funding previously allocated to TVNZ to assist with Charter objectives to create the Platinum Fund.

The Platinum Fund is managed by NZ On Air alongside the existing contestable television funding, but is specifically allocated, on a contestable basis, to projects that fulfil public service broadcasting objectives. That way the best projects will be made, and this can only be a win for the viewer.

As Minister of Broadcasting, I am focused on three key priorities:

* removing the Charter from TVNZ to free it from an unworkable dual mandate of commercial and public broadcasting expectations;
* the digital switch-over for television; and
* ensuring transparency and accountability for broadcasting entities receiving public funding.

When it comes to radio broadcasting, there is no particular area of concern to consider - we have excellent public radio; a range of commercial stations; and Access, student and iwi radio stations. The spectrum allocation regimes work well, and there isn't the same urgency with regard to a switch-over to digital broadcasting.

In general, government wants to ensure that we have a fully open and competitive environment, as we believe this best delivers diversity and quality to the consumer. We believe contestable funding via NZ On Air will deliver high-quality local content on television and radio.

Background

Most of you will be too young to remember the upheaval in broadcasting in the late 1980s and early 1990s. This was a period of legislative, regulatory and institutional changes designed to improve economic efficiency in the broadcasting sector.

New structural models were established to reflect these principles in relation to government ownership of commercial assets, and the State Owned Enterprise was introduced - a model requiring a separation of commercial and social objectives.

The old broadcasting corporation (variously known as the NZBC and BCNZ) did not fit that model.

The Broadcasting Amendment Act (No.2) 1988, and the Broadcasting Act 1989 dissolved the BCNZ, and established TVNZ and Radio New Zealand as separate entities.

The Broadcasting Tribunal was replaced by the Broadcasting Standards Authority and restrictions on overseas ownership of New Zealand broadcasters and on advertising hours were reduced.

De-regulatory measures to promote competition were introduced, and transmission assets were passed to TVNZ's subsidiary, BCL (subsequently separated from TVNZ and today known as Kordia).

The establishment of the Broadcasting Commission, (or NZ On Air, as it is known) established a contestable grant scheme for the production of local content. This funding model was unique in the world, and ahead of its time. Now other countries, including Ireland and the UK, are interested in following our example.

The legislative changes of the late 80s were to create a very different broadcasting environment - where:

* CanWest acquired the TV3 network and established the TV4 network through trading of spectrum rights - plus radio interests (now RadioWorks);
* private terrestrial television networks were established;
* Sky and Saturn established satellite and cable services respectively;
* there was a big increase in television advertising, resulting in increased advertising revenues; and
* government cemented its support for Access Radio.

Iwi Radio also dates from this period of change, after the Waitangi Tribunal recommended radio frequencies be reserved for the promotion of Māori language and culture. Between 1989 and 1994, 21 stations were set up around the country.

As you can see, government policy plays a very big part in determining the nature of the broadcasting environment.

The changes introduced by the Labour Government sought to build up public service broadcasters, but in the case of TVNZ, I think we can say the policy was not particularly successful.

Our policies take the mixed objectives out of the system, and are more suited to a diversified broadcasting environment.

Today, government's responsibilities for Broadcasting are located in:

* the Ministry of Economic Development, which focuses on networks and infrastructure, through management of the radio spectrum;
* the Ministry for Culture and Heritage, which focuses on the content that gets delivered across the network, with social and cultural objectives in mind, and is responsible for NZ On Air and the Broadcasting Standards Authority; and
* Te Puni Kōkiri, which is responsible for Māori Television and for Te Māngai Pāho, which funds programmes on Māori TV and on TVNZ, the iwi radio stations, the Māori news services Ruia Mai and Waatea News.

Spectrum

As you will know, New Zealand is considered to have a fairly de-regulated radio environment. New Zealand has a plethora of radio stations: approximately 600 commercial radio stations, and approximately 400 non-commercial radio stations. As a result, New Zealanders are spoilt for choice - for example, in Auckland you have much greater choice of radio stations than people in Sydney.

It also means a greater choice of employment opportunities for you when you graduate.

This was not always the case. New Zealand used to have a system where the government authorised all uses of radio frequency spectrum.

Some of you may have seen Rock the Boat recently - I'm not sure if it reflects the Radio Hauraki experience, but you will get some idea from this film how tightly regulated radio used to be, and the lengths to which commercial broadcasters went to get on air.

With the passing of the Radiocommunications Act 1989 and its regulations, we shifted to a competitive market, where spectrum rights became a tradable property.

Spectrum allocation

Now, we have two methods of spectrum allocation: the Management Rights Regime and the Radio Licensing Regime.

Under the Management Rights Regime, interested parties bid for management rights to a nationwide block of spectrum. A rights-holder can then assign spectrum licences within that block. New Zealand was one of the first countries to enact a property rights-based regime for spectrum allocation and this regime is still regarded internationally as an efficient and cost-effective approach to spectrum management.

The Radio Licensing Regime is reserved for non-commercial services - defined as radio-communications that the commercial market would be unlikely to provide to any useful level.

Radio spectrum managed under the radio licensing regime is a significant resource for New Zealand's ICT infrastructure and supports a wide range of public and private uses including public safety, emergency and defence services.
A competitive bidding process would be unaffordable for these groups, so the government uses an administrative process for those frequencies, with a cost-recovery fee.

The government's job is to decide whether spectrum is assigned administratively, or sold commercially. Spectrum is a valuable resource, and the government has to balance the interests of commercial and community broadcasters and to ensure New Zealanders get a full range of services; not just those which are commercially viable.

New Zealand has gone further than most countries in treating spectrum as a commodity, but 83 per cent of the frequency bands below 30 Gigahertz are still managed administratively.

Review of the radio licensing regime

In government, it is important to regularly review policies to ensure they are still relevant and effective. The Ministry of Economic Development is currently reviewing the way spectrum is managed under the Radio Licensing regime.

In March, the Ministry released a discussion paper considering a number of potential options which may help improve the overall efficiency and effectiveness of spectrum management. Submissions close this month, and I will be interested to read the outcomes of this process.

The regime has not been comprehensively reviewed since the Radiocommunications Act 1989 came into effect. However, various aspects of the regime were examined as part of the review leading up to the 2000 amendment of the Radiocommunications Act, and in the 2005 Review of Radio Spectrum Policy.

No changes to the regime are proposed at this stage. The intention is to gather better information on the efficiency and effectiveness of the current regime and to test the Ministry's current thinking. This work is a very early stage of policy development and the Ministry of Economic Development will take into account the submissions before recommending any further work.

Overall, we think the regime is working well, with a few exceptions like studio-to-transmitter link spectrum in Auckland area, where supply is not meeting demand. The Ministry is particularly interested in industry views on any other potential problems which have not been identified in the discussion paper.

There will be further opportunities for discussion, if any changes are identified by the Ministry of Economic Development. Further consultation, if necessary, is likely to occur in 2009 and 2010.

Government support for radio content

In addition to its radio-spectrum management role, the government's main interest is in supporting material not found on commercial radio stations, to meet the diverse needs and interests of New Zealanders. Hence our ownership of, and funding for Radio New Zealand; funding for the National Pacific Radio Trust, and support via contestable funding for Access, student and iwi radio. These stations may not be commercially viable, but are desirable - and indeed necessary - for cultural or social objectives.

How else does government support cultural content on radio?

* through funding from NZ On Air and Te Māngai Pāho;
* through the development of broadcasting policy, monitoring of funding agencies and evaluation of public broadcasting outcomes by the Ministry for Culture and Heritage; and
* the Broadcasting Standards Authority, which administers content standards codes developed in consultation with the industry and considers complaints about breaches of the codes.

Access radio

As I noted earlier, the establishment of NZ On Air cemented government support for Access Radio Stations.

Access Radio stations play an important role in meeting the needs of interest groups and local communities around the country.

The 11 current stations are operated by incorporated societies or charitable trusts.

NZ On Air's criteria for funding Access Radio considers diversity, the level of community support, coverage, costings and management plans. In return for NZ On Air funding, the stations provide community programming, as determined in section 36(c) of the Broadcasting Act 1989, specifically for:

* women;
* youth;
* children;
* minorities in the community, including ethnic minorities; and
* people with disabilities.

Programmes which reflect the diverse/ethical beliefs of New Zealanders are also encouraged by NZ On Air.

Access radio programmes are made ‘by the community, for the community', with the help of access radio staff, who provide training and resources. NZ On Air meets up to 60 per cent of operational costs for Access Radio. Stations are expected to meet the rest of their costs through advertising, sponsorship, donations and the sale of air time to community groups.

Access stations have also been able to apply to NZ On Air for additional funding for special projects or necessary capital replacement or purchase. Special projects funded in recent years have ranged from assistance for stations facing enforced relocation as leases expired, and the replacement of aging and failing equipment, to the promotion of services to attract new programme makers and the development of a project to increase youth programming.

I understand there could be as many as three new Access-type stations commencing broadcasting shortly, as a result of new licence allocations in 2008, and NZ On Air has made provision for the start-up of these stations.

In 2008, NZ On Air undertook a review of its funding policies for Community Access Radio and Regional Television. Following the review:

* regional TV funding increased by 68% by re-prioritising within NZ On Air's baseline;
* regional television funding is moving to a programme-based scheme (rather than funding being used to help with station overheads); and
* Access Radio will also have some extra funding available through internal re-allocation of New Zealand On Air's baseline.

FM licences

In April 2008 the government released 16 new FM radio broadcasting licences, on a local non-commercial basis, to enhance regional and community broadcasting.

Not all of these licences were allocated, as in some regions applicants were unable to meet the criteria. There were eight successful applicants, evenly distributed between the North and South Islands. Four current Access stations - Radio Southland, Hills AM in Dunedin, Fresh FM in Nelson and Radio Kidnappers in Hawke's Bay were able to migrate to FM.

The other four, bsideFM in Whakatane; Taranaki Community Events Trust; Hutt Radio Trust and North Canterbury Radio Trust were given a year to begin broadcasting.

The only unused FM frequencies are in Crown reserve blocks in the upper FM band, which are currently set aside for youth and Māori networks.

The government intends to review the reserved block of frequencies for youth radio. This may result in the release of some frequencies for other uses, but I can't predict what the outcome might be, in advance of this review.

If the review results in a decision to release spectrum, decisions will have to be made about either making these available for a network service, or breaking the block into more localised and diverse services (which could result in a less efficient use of the frequencies).

Renewal of rights

All radio licences expire in April 2011. The renewal prices for individual commercial licences have been advised to current licensees, while the process and criteria for non-commercial licences are in development.

Criteria for renewal are in development, but may include renewing the licences for broadcasters which provide:

* local broadcasting;
* diversity of programmes and programme-makers, filling community needs unmet by commercial radio;
* providing access for communities who wish to make, hear or be involved in programmes, where their interests would otherwise not be met; and
* long-term planning for technological progress, including transition to digital or the web

The following conditions are likely to apply:

* A non-commercial station should use the majority of hours in peak listening time to programmes made by, and reflecting the interests of, the community it serves.

* The station should have a policy of identifying a range of potential programmes reflecting the diverse interests of the community at large or that identified as the focus of the station, such as students, a marginalised age group, ethnic minorities or religions.

* The station should seek out, train and encourage those in the targeted area of community interest to participate in programmes, as host/producer and/or guest contributor.

* Desirably, a station should schedule seminar-type training events where skilled broadcasters share their skills with potential broadcasters on the station.

* Where a station has the only non-commercial frequency in a town or city, care should be taken to include a range of programme genres.

* The station should investigate local internet services for possible extensions of broadcast material and/or join with local stations of similar interest to create a web presence for live streaming and/or podcast material.

* Access or student radio stations may have only one or two paid staff. Therefore the integration of office and studio volunteers, and programme producers should have clear written procedures agreed by the governance body, the paid staff and the volunteers.

* A business plan indicating a consistent funding stream for the operation of the station will be crucial.

Digital radio and digital switch-over

The digital era brings considerable benefits and challenges to broadcasting. Digital broadcasting is a priority for the government, as the world goes digital and analogue becomes obsolete.

For television, the aim is to achieve digital switch-over by 2015 at the latest, to maximise the economic benefit, which is estimated to be $230 million (providing the switch-over occurs by that date).

A tentative date will be announced when digital take-up has reached 60 per cent, and a final date will be annnounced when take-up is at 75 per cent, or in 2012, whichever comes first.

Television has to switch to digital, but the case is not so strong for radio. I expect the move to digital radio to be somewhat further off than it is for television.

With our geographical isolation and small population base, the choice of transmission platforms is far more limited than it is in Europe. Satellite availability is limited, so current trials in New Zealand are focusing on terrestrial digital radio broadcasting.

Benefits of digital radio

What would be the benefits of digital radio? Obviously, for radio buffs, there would be interference-free access to a wider range of stations than at present.

Proponents of digital radio claim that AM band radio services can be delivered at FM broadcast sound quality, and FM band radio content at CD-like sound quality.

Other forms of information could be broadcast simultaneously with audio transmission, such as station and song identification and weather reports.

Further benefits include;

* better coverage (if VHF Band-III is used);
* efficient use of spectrum;
* ease of tuning; and
* pause and rewind functions.

This last feature would be of particular interest to those of us who listen to the weather forecast and then realise that it has somehow got to the Chatham Islands (while our local forecast has failed to register in our consciousness).

Digital radio receivers are rapidly evolving and offering more and more features to tempt the consumer, but whether there would be strong interest in them remains to be seen.

United Kingdom

Certainly in the UK, the take-up hasn't been particularly strong, even though digital radio has delivered more radio stations, and digital transmissions are free from the interference problems experienced by FM stations.

Just under 30 per cent of adults in the UK claim to own a DAB set, and commercial operators have struggled to make a return.

The British government has not discussed a switch-off date for the analogue radio signal, and Lord Carter, the Communication Minister, has indicated a digital migration plan would not kick in until a number of milestones had been reached. Specifically, this would be when:

* digital radio accounts for more than 50 per cent of all radio listening - currently it accounts for just over 18 per cent;
* DAB coverage meets current FM levels; and
* local DAB reaches 90 per cent of the population and all major roads.

Commercial radio and the BBC are joining forces to set up a cross-industry Radio Council to promote digital radio to consumers, and to improve the uptake of these services.

Australia

Digital radio is being rolled out across Australia this year, starting, this month, with stations in Perth. In addition to the features I identified earlier, Australia's DAB+ services will provide scrolling news, sport and weather text and the capacity to text.

DAB+ digital radios will be available in MP3 style, hi-fi, portable players, clock radios, car adaptors and PC radios. Entry level radios will start at A$150.

Some receivers will be able to display a cover of a CD, a product picture, or a picture of a radio host .

New Zealand

The main issues discouraging digital radio broadcasting in New Zealand are:

* the availability of the VHF Band-III (which is very suitable for digital radio, but is currently in use for analogue TV transmissions by TVNZ and TVWorks until DSO) ;
* the cost of digital receivers (which becomes a real issue when you consider how many radio receivers are in the average house);
* the small volume of the New Zealand market, which means we're price and technology takers;
* lack of industry agreement on the way forward in terms of which radio technology to choose; and
* the cost of simulcasting (we'd have AM, FM and digital radio all transmitting).

At present there doesn't appear to be a strong business case for digital radio, nor any particular consumer demand. There would have to be stronger interest before the government would turn its mind to whether there was a policy rationale for becoming involved.

Currently, digital radio in New Zealand is represented in two trial demonstrations in Wellington and Auckland. If you own a digital radio receiver in those two cities, you may be able to pick up seven radio stations (Base FM, BBC World Service, RNZ National, RNZ Concert, in two forms (DAB and DAB+) George FM, Mai FM and Radio Tarana). I have asked my officials to monitor the trials and report back to me by December this year.

Sometimes it is a good idea not to be the first off the block when it comes to technological change. Australia's DAB+ is a considerable improvement on the UK's DAB system. We will be able to monitor how both countries are managing the switch-over and learn from their experiences.

Convergence

We may not have digital radio per se, but radio is certainly getting into the digital world. Ten years ago, the only way a listener could access Radio New Zealand was on AM or FM: now, it can be accessed on Freeview DTT and DTH, Sky, the internet (as live stream, audio on demand, or podcast) and the current Kordia trials of Digital Audio Broadcasting in Wellington and Auckland.

Recently Radio New Zealand National's One in Five programme made innovative use of web technology to mark the third year of New Zealand Sign Language as New Zealand's third official language. One in Five was broadcast in audio and video on the website, so the deaf and hearing-impaired could view the signed interviews.

Alternative transmission options may become increasingly attractive for Access Radio stations with particular communities of interest, particularly given the lack of availability of FM non-commercial and commercial licences. I note Access radio is using the internet - Seven stations share their broadcasts via the internet at www.accessradio.org

Once radio signals are in the digital domain, clearly there are all kinds of possibilities for how that data can be accessed and used.

The increasing convergence between broadcasting, telecommunications and the internet raises some issues for government to consider.

Some of the content provided on the internet, cell phones and other mobile devices is the same as what is broadcast conventionally, but some is different, or in longer, unedited versions.

The Broadcasting Act applies a ‘one-to-many' definition of broadcasting and excludes ‘one-to-one', on-demand forms of communication. Similar content that appears only on the newer platforms used by broadcasters and accessed on demand is not subject to the broadcasting standards regime. There have been some cases, I believe, where the BSA has had to turn away complaints because they fall outside its jurisdiction - for example, broadcasting-like content that is only available on a website.

The policy question is: do we want a consistent set of standards - and an ability for the public to complain - to apply to broadcasting and similar content on other platforms?

This is one of the issues we will be considering in our programme of action for broadcasting.

Convergence raises other issues to consider.

* It will change revenue models; for example, is the future of spot advertising limited? Broadcasters may need to find ways to have a direct billing relationship with the audience.

* We will have to ensure everybody has access and consider how we can avoid ‘the digital divide'. The government's priority to roll out broadband will assist us in meeting that objective.

* There are also significant challenges in relation to copyright and intellectual property rights to consider, especially with increased interactivity and user-generated content.

Accountability and transparency

Accountability and transparency were key principles in our election manifesto for broadcasting.

In line with our general interest in getting value for taxpayer dollar, the government wants better accountability for entities receiving public funding, including our public broadcasters.

A Cabinet- commissioned review of the National Pacific Radio Trust is to be undertaken by November 2010. The government is committed to supporting the radio services offered by the Trust, but we want to ensure we are getting the best outcomes for the funding it receives. We intend to commence that review soon.

Radio New Zealand undertakes an annual survey of its listeners. The results are available on its website, in the Radio New Zealand Annual Report and to Parliamentary Select Committees, but I am keen for this information to be made centrally available and promoted.

I am pleased to note the results for 2008 are the best Radio New Zealand has achieved since commencing specific Charter research in 2000:

* 84 per cent of those surveyed, including non-listeners, agreed it was important for New Zealand to have a public service radio broadcaster; and
* 75 per cent agreed that Radio New Zealand provides a valuable service for New Zealanders.

Radio New Zealand National is perceived to be foremost among its peers - as you probably know it was named New Zealand's best radio station at the 2009 New Zealand Radio Awards - the first time a non-commercial public-service broadcaster has won the radio industry's top award.

Among the 13 awards Radio New Zealand won this year was the award for Best Radio Website. And I was pleased to note in the 2008 calendar year, more than six million Radio New Zealand programmes were replayed through the internet.

Radio New Zealand Amendment Bill

Under the Radio New Zealand Act 1995, five-yearly parliamentary reviews of Radio New Zealand's Charter are required. In 2005, Radio New Zealand undertook its own review, in consultation with listeners and stakeholders, and developed a revised draft of the Charter.

The parliamentary review of the Charter was undertaken by the Commerce Select Committee, which reported it was satisfied with Radio New Zealand's proposed revision, subject to a few minor changes.

The previous government did not get to a point of introducing the Radio New Zealand Amendment Bill. I have been able to make progress quickly on the Bill since the election and it is currently before the House.

The Bill sets out the principles of operation for Radio New Zealand and updates Radio New Zealand's Charter.

The revised Charter makes a stronger statement than its predecessor about Radio New Zealand's role as a public broadcaster. The Bill also removes any potential that Radio New Zealand could be required to provide a dividend. It clearly states Radio New Zealand‘s purpose is to serve the public interest, and that this is to be achieved through public-service principles.

The Bill also makes it clear that the clock will only start ticking for the five-yearly review once the revised Charter has been in place that long. Otherwise, there would be the potential for a new review to be commenced when the ink was scarcely dry on the last one!

Radio New Zealand plays an important role in public life, both in New Zealand, and in the wider Pacific region. Politicians here may resent being on the sharp end of Morning Report or Checkpoint questioning, but recent muzzling of the media in Fiji reminds us how important it is to retain editorial independence in our public broadcasting, and how vital this independence is for the democratic process.

As Minister of Broadcasting, I am pleased Radio New Zealand International's website and short-wave broadcasts have been able to continue providing news and information for people living in Fiji.

Broadcasting programme of action

In addition to the priorities outlined above I am currently working with my officials on a draft programme of action for broadcasting, which will build on government's manifesto commitments and further address some of the issues I've discussed today.

As Minister, I receive letters from New Zealanders who think I can decree changes in the way the news is read, or the speed in which it is delivered. Other writers urge me to intervene in on a range of broadcasting issues, such as the volume of television advertisements, the scheduling of particular programmes, programme content, perceived political bias, sports coverage and the outcome of their complaints to the Broadcasting Standards Authority.

I am pleased the days when radio news was written in the Prime Minister's office are long gone and that my portfolio responsibilities do not extend to the level of control some correspondents believe I should have.

From the sheer volume of letters I receive, and the passion with which they are written, I can only conclude that New Zealanders consider the media to play a very important role in their lives.

I don't receive many letters about radio, but I don't think we can infer from this that people are not interested in it. Radio has continued to hold its own in a rapidly changing media environment because it meets people's needs for up-to-date information about their communities and the wider world, and their need to be entertained and amused.

Radio also provides a forum for the exchange of ideas, supporting us as well-informed and involved citizens.

The government's broadcasting manifesto was entitled Fit for the Future. I am confident the government's policies will assist New Zealand's media organisations to meet the challenges and opportunities of a rapidly evolving technological environment.

I am sure radio will meet those challenges, and I wish you all the best with your future careers.