4084
THE NEW ZEALAND GAZETTE
No. 172

station would amount to $350,000. This would lead to a
loss of potential advertising for the regional FM station
and to a lesser extent have an effect on Radio Northland's
revenue. This station may, in fact, prejudice the viability
of the regional station during its first years of establishment.

(e) The financial and commercial ability of the applicant to carry
on the proposed service.

Mr Lilley has spent many years in radio as an announcer
and has been involved in community promotions including
the summer station Bay Radio, established by Radio New
Zealand in the Bay of Islands over the summer holiday
period. For the past few years he has been part of the team
in that station and announcer in charge of promotions. He
is a medical electronic technician.

Mr Pearce has an Electrical Trades certificate and for
the last 6 years has been employed by the Bay of Islands
Electric Power Board as an electrical technician working
on telemetry systems, radio communications and laboratory
testing. He was in charge of the installation at Kerikeri
Airport and of a new radio telephone repeater at the summit
of Mount Raukura.

In March, P. W. Byers, a chartered accountant, became
a director of the applicant company. He is responsible for
organising the overall management requirements for the
company's operation, raising the capital and controlling
the day to day financial management of the company. He
is 40 years old and has many years experience in chartered
accountancy. He is now a senior partner in an accounting
firm in Kaikohe.

To some extent we also formed an opinion on the way in
which the application was put together. Despite their
technical background there were extensive amendments to
the proposal and extensive criticism of the original
proposals on technical grounds by other witnesses.

The application had not been thought out carefully as
regards news and staffing, and none of the directors had
any sales or marketing experience.

What is more it was not evident that Messrs Lilley and
Pearce saw this as important. The way in which they
would handle local news and information was
unsatisfactory and the proposition appeared to be beyond
their personal abilities and beyond the resources of the
area, unless it were introduced and carried out by
experienced broadcasters with both sales marketing and
management experience. Mr Pearce who was to take
responsibility in these areas had no sales experience or radio
news experience.

(None of this reflects on Mrs Beer's presentation of the
case which certainly made the most of it.)

We would have been more impressed with the application
had the applicant's proposed a more modest sitting and
coverage area and shorter hours, although we cannot say
that it would necessarily be successful.

We accept that Mr Byers is a capable accountant in
private practice, but do not know whether he would have
the level of commitment to the establishment of this
business which might prejudice his personal time and
involvement in his professional activities.

The survey material when probed was not impressive.

After hearing Mr Webber's evidence we considered that
the research and budgeted figures are reasonable except in
this respect. We do not consider the revenue projections
can be attained on the small population base, even allowing
for the summer influx. From 400 businesses this would
require $750 per annum sales to every one of them. There
was no satisfactory evidence of advertising support.

(f) The likelihood of the applicant carrying on the proposed service
satisfactorily.

Mr Lilley has some knowledge of programming but it
appears to be limited. The resources of the station would
not permit any extensive surveying of reaction to music
programming and we doubt that the station could survive
in its present form. It is more likely that the company
would be taken over and run by some others on another
basis who would then possibly ask for amendments to the
warrant.

We believe that the task has been under-estimated by
Messrs Pearce and Lilley and that their lack of management
experience would show up in the difficult first 12 months
of the establishment of the station. There is a lack of
experience to organise and manage sales.

(g) The results of any survey available to the Tribunal

The survey was referred to but it proved to be of no
substance. It was informal and subjective. The material,
when probed, was not impressive.

(h) The requirement that frequencies be best utilized in the public
interest.

Mr R. B. Vernall, an engineer with the Regulatory
Division of the New Zealand Post Office, pointed out that
the proposed transmitter site did not comply with the co-
siting policy, and had the potential for causing interference
problems, namely:

1. Excessive field strength causing domestic receiver
   overload for locations close to the transmitter.

2. Picture impairment on TV Channel 1 receivers in
   nearby areas.

3. General field strength and balance with the Hikurangi
   station.

However, Mr Vernall pointed out that because of the
sparse population in the vicinity of the transmitter site,
with a careful allocation of frequency and power the number
and severity of the interference problems would be low.
Because this area is at one end of the country the
implications of non-cositing would be less important for
frequency allocation. The Post Office would be prepared
to certify the application up to 1 kW with omnidirectional
aerials as a result of further information supplied. Mr D.
J. Gatland said that if the most desirable frequency
89.0 MHz were allocated as the FM frequency in order to
minimise interference with television reception, there may
then be no suitable FM frequency available in the area for
short term broadcast authorisations. Mr Gatland pointed
out that the assessed population of 25 000 average was not
consistent with the total mid-north television coverage from Hikurangi and Russell transmitting stations
of about 24 000 based on the 1981 census.

Mr Gatland also noted that the site was an inefficient
one providing a marginal service to important places such
as Kaikohe (shaded by 12 foot hills 4 miles out of Kaikohe),
Opua which was heavily shaded. Moerewa and Kawakawa
which were heavily shaded.

By contrast the Hikurangi site used by television which
had been criticised by the applicants was an efficient site
requiring only one television translator in the proposed
service area for Sunshine, namely at Russell. It is by no
means certain in the view of Mr Gatland that a similar
translator would be required for FM if Hikurangi was used
as a mid-north area station. The 2 mV/m standard for a
town like Kaikohe would be achieved from Hikurangi.
He said that a lot of the coverage problems of Sunshine
arose because the site was so low that it did not clear the
surrounding hills. Only 1½ kilometres away to the south-
west, there was a hill 50 feet higher whereas Hikurangi was
3 times the height, which meant that the station would
only require one-tenth of the power to serve a similar
coverage radius.

We accept that Mr Gatland's evidence casts doubt on
the coverage proposed by the applicant. The reason for not
wanting the Hikurangi site was expense and the fact that
it would cover a wider area than was intended to be served
by the applicant. While there is no doubt that the most
efficient use of frequencies would be the use of the
Hikurangi site, because of the location of the area no great
harm would be done by having a non-cosited station, if
the desirability of the service, its economic viability and
its likelihood of fulfilling a need in the area weighed
sufficiently in the balance.

(i) The desirability of avoiding monopolies in the ownership or
control of news media.

The applicant would provide another source of
information.

(j) The hours during which the applicant proposed to broadcast
programmes.

The 18-hour period appears to us to be too ambitious
and shows an attempt to provide a full station service to
an area. A more modest proposal would have been more
realistic.

(k) The extent of advertising matter which the applicant proposed to broadcast.

It is unlikely the extent of advertising would reach a
level where there would be any disadvantage in the
application to anyone.

(l) The proposed rates and charges to be made in respect of the
advertising programmes.

The rates were too high. We accepted Mr Borck's
comparisons with Radio Northland's rates as unfavourable
to the applicant.