9 JULY THE NEW ZEALAND GAZETTE 3191

All research, including the Radio New Zealand survey,
clearly pointed to substantial interest in the provision of
a truly local service.

The corporation survey evidence did show high support
for popular music on FM for teenagers and young adults.
Their music needs, however, have to be considered along
with those of the under 40 audience as a whole. We consider
they will be met (along with others’ needs) to a reasonable
degree by the Energy Enterprises format and, more
specifically later, by the additional choice of ZM/FM.

(h) The requirement that frequencies be utilised in the public
interest:

There were no submissions relevant to this heading.

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

The Action FM station was supported by Taranaki
Newspapers Ltd. which, before the hearing, reduced its
proposed interest from 40 percent to 14.9 percent.

We have had some regard to the New Zealand News
(and Brierley Investments Ltd. as the majority shareholder
in New Zealand News) ownership and dominance of the
print media services available in Taranaki to both public
and advertisers.

FM applications involving newspaper ownership are, in
terms of Government policy, to be taken on their merits
but the tendency towards dominance in this case is also a
factor to which we should give some weight. That will be
slight in this case because the interest in the warrant is less
than a prescribed interest.

Both the private stations would introduce a news service
to the area. A ZM/FM service would also have some
different news but would use the basic New Zealand wide
Radio New Zealand News service which is already available
on 2ZP.

A private operator would introduce different news
sources. Energy’s would introduce one not associated with
existing media in Taranaki.

(j) The hours during which the applicant proposes to broadcast
programmes:

Energy Enterprises Ltd. would provide a 24-hour locally
originated programme service. Action FM proposed an 18-
hour a day service on week days initially. In the particular
circumstances we consider this a slight disadvantage
compared with the fuller service offered by Energy.

The ZM service would be 24 hours a day but only 4
hours of it would be fully locally originated. Local
information would be inserted into the programme at some
other times but there are some limitations on this. It will
be seen as a network operation for about half the day and
a network dominated one for about 8 of the remaining
hours and at weekends.

Although the corporation claimed the ZM/FM service
would have local news, weather, etc. inserted for up to 18
hours a day, the level of local manning proposed indicates
a much less topical local service for the evening hours.

(k) The extent of advertising matter which the applicant proposes
to broadcast:

The corporation proposed no limit on advertising
volume.

Both private applicants proposed that there should be
self-imposed limits of 8 minutes per hour. The tribunal
considers such limits should be imposed by the tribunal
as conditions. It is always open for parties at a later stage
to apply for amendments, particularly where there is some
FM competition.

During the period that Energy Enterprises is operating
as a solo operation its maximum minutes per hour would
be limited to 8.

In view of the effect on the private station of the
corporation’s operations, the ZM/FM station will be limited
to 6 minutes per hour.

Although the corporation claimed that there was no basis
for giving some protection to a new private applicant, the
tribunal must take account of the enormous resources and
ability of the corporation in both its selling organisation
and its network privileges to sell advertising competitively.
We consider that, for an initial period at least, it is
important that there be some restriction on the market.
The effect of the restriction of course is to benefit both
2ZP and the private station. The benefits do not fall entirely
to the private operator.

(l) The proposed rates and changes to be made in respect of
advertising programmes:

There was criticism levelled at the corporation budgeting
on a 100 percent sale of inventory and the effect this had
on rates.

There were also allegations that the ZM/FM rate was
unrealistically low. These were countered by the corporation
which considered them consistent with its charge for
ZM/FM services elsewhere on a 10 percent market share.

The tribunal would be concerned if there was any so-
called “predatory pricing” being undertaken by the
corporation but it considers this unlikely if available
advertising minutes were limited to 6 per hour.

(m) Such matters as may be necessary for the purposes of imposing
conditions under section 71A of this Act:

We have referred to the 51 percent shareholding of
Energy Holdings Ltd. in Energy Enterprises. As this
company has a prescribed interest—and a controlling one—
it will be necessary to impose conditions making it a
condition that, as long as Energy Holdings (“Holdings”)
has a prescribed interest in the warrant, it will be a
condition of the warrant that—

(a) Any change in the shareholding of Holdings which
results in any person obtaining a prescribed interest in
the warrant indirectly will require the consent of the
tribunal.

(b) Any disposal by Holdings of its shares in the warrant
holder

• to any news media company or
• to any person who will then hold a prescribed interest
  will require the approval of the tribunal.

(n) All relevant evidence or representations made at the hearing.

(o) Such other matters as may be prescribed in regulations in that
behalf:

Regulation 15A of the Broadcasting Regulations requires
the tribunal to have regard to the general policy of the
Government in relation to the development of FM
broadcasting as an integral part of sound-radio broadcasting
in New Zealand.

The tribunal is required by section 68 of the Broadcasting
Act 1976 to have regard to the policy of the Government.

In our Nelson decision (decision No. 15/87) we set out
our understanding of the effect of the 2 sections of the Act,
i.e., section 80 and section 68. We have also given
consideration to the Government policy stated in the
ministerial notices referred to and detailed in that decision.
Our general position on the Government policy question
set out fully in that decision is the position we have taken
here.

Regard to Government policy in this instance has
resulted in our giving a more favourable decision to the
ZM/FM application. While we would not have placed the
Action FM application ahead of it, the weight we gave the
policy influenced us in our decision to grant the ZM/FM
application at this stage rather than decline the application
and suggest a further application would be considered at
some indefinite date in the future.

We believe the ZM/FM service should, as a second
priority, follow and not commence contemporaneously with
the private operation which we consider to be more
desirable in overall terms and in time scale.

After careful consideration then, the tribunal has
concluded that it should grant 2 warrants, 1 to Energy and
1 to the BCNZ for a ZM/FM station, with the ZM/FM
warrant deferred until 12 months after the commencement
of broadcasting by Energy.

We accept that the FM Concert programme, which would
be “piggy-backed” into the area on the ZM/FM programme,
may be thus deferred. The corporation may well consider
that since the actual operations of the ZM station are not
closely linked with its support for the cost of the FM
installation, and since the corporation’s revenue on its own
estimates may in fact increase on the commencement of
the Energy Enterprises station, it may be appropriate to
take the opportunity to install and co-site a Concert
Programme transmitter with the private FM transmitter
and commence the service at the same time. The unusual
delay in the completion of this decision will have been of
some benefit to the corporation. That may allow a more
positive view to be taken on the commencement of the
Concert Programme FM service.

Our comments on the Nelson situation are pertinent. In
Taranaki, the corporation may well decide in public interest
terms whether it is as important to introduce the ZM/FM
service (a commercial operation) or the Concert Programme
in FM stereo.