Communications and Information Technology Minister Steven Joyce today announced optional changes to the payment plan for radio broadcasters to renew their spectrum licences.
"The recent economic downturn, and the associated significant decline in advertising revenues, has caused a number of commercial radio broadcasting licence holders to reassess their business plans.
"The Government recognises that some licensees may have difficulty paying the one-off lump-sum renewal payments for their 20 year spectrum licenses next year."
Cabinet has agreed to offer an alternative payment option to the radio broadcasters, provided any change is revenue-neutral to the Crown.
This will allow a series of not more than five annual payments incorporating interest at 9.5 percent, plus inflation.
The 9.5% is Treasury's discount rate for technology projects. There will be appropriate mechanisms for the Crown to have first security over any licenses paid for in this manner until the payments are completed.
Mr Joyce says this is designed to provide the radio industry with some short-term flexibility of payment terms to assist it during the current economic downturn.
"It does not represent a decision to move away from lump sum payments when settling other spectrum purchases in any way."
"The recent economic downturn, and the associated significant decline in advertising revenues, has caused a number of commercial radio broadcasting licence holders to reassess their business plans.
"The Government recognises that some licensees may have difficulty paying the one-off lump-sum renewal payments for their 20 year spectrum licenses next year."
Cabinet has agreed to offer an alternative payment option to the radio broadcasters, provided any change is revenue-neutral to the Crown.
This will allow a series of not more than five annual payments incorporating interest at 9.5 percent, plus inflation.
The 9.5% is Treasury's discount rate for technology projects. There will be appropriate mechanisms for the Crown to have first security over any licenses paid for in this manner until the payments are completed.
Mr Joyce says this is designed to provide the radio industry with some short-term flexibility of payment terms to assist it during the current economic downturn.
"It does not represent a decision to move away from lump sum payments when settling other spectrum purchases in any way."
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