Fight Over Draft ATSC 3.0 NPRM Shows Where Future Battle Lines Will Be Drawn
Ex parte filings and blog posts from NAB and pay-TV groups about the draft ATSC 3.0 NPRM show where the battle lines will be in the comment phase and on an eventual ATSC 3.0 order, industry officials from both sides told us.
Broadcasters say the adoption of a next-generation standard has nothing to do with retransmission consent rules, but pay-TV groups say ATSC 3.0 would strain their capacity, and broadcasters intend to force pay-TV operators to agree to transmit the new standard in retrans negotiations, said recent ex parte filings in docket 16-142 from the American Television Alliance and American Cable Association. FCC Chairman Ajit Pai's new policy of releasing the text of items on circulation led to a great deal of lobbying from pay-TV groups (see 1702020051).
A broadcast industry official expects few changes to the NPRM before Feb. 23's commissioners' meeting. Some additional questions on pay-TV capacity could be included, the official said.
Though it could be a while before a broadcaster is ready to make the switch to transmitting only in ATSC 3.0, it's an immediate issue because of retrans negotiations, said broadcast and pay-TV industry officials. With this NPRM and likely a future order, retrans negotiations this year and going forward involving broadcasters that are invested in ATSC 3.0 are certain to contain provisions involving the new standard, both sides agreed.
Multichannel video programming distributor concerns about ATSC 3.0's effects on their capacity are overblown because broadcasters haven’t asked for rules that would force MVPDs to retransmit the next-gen signal, said a broadcast executive. Since retransmitting ATSC 3.0 signals would require expensive upgrades to MVPD systems, it's a stretch to argue that broadcasters could force MVPDs to do so in retrans agreements, the broadcaster said. The draft NPRM “devotes a lot of space to retransmission consent arguments that have no bearing on enabling innovation in broadcast services, other than to stifle them,” said NAB in a blog post Monday (see 1702130038).
Though the NPRM seeks comment on whether the FCC should act to prevent ATSC 3.0 carriage from being a part of retrans negotiations, it should include additional questions about carrying the new standard and the effects of the switch on small operators, said ACA in a recent letter and ex parte filing. “Small MVPDs, for example, are uniquely vulnerable to broadcaster attempts to compel carriage of ATSC 3.0 signals.” The FCC should seek comment on having broadcasters or the incentive auction reimbursement fund pick up the cost of upgrading to ATSC 3.0, and on whether the transition will cause capacity issues for small cable providers, ACA said. ATVA wants the NPRM to seek comment on the quality of broadcaster simulcasts, and how much bandwidth an ATSC 3.0 signal can consume.
Transitioning to ATSC 3.0 will be “quite positive” business-wise for “the majority of local television stations,” said BIA/Kelsey Chief Economist Mark Fratrik in a news release. "The biggest opportunities around the implementation of ATSC 3.0 are that it will give broadcasters a new opportunity to grow and address their major concerns like reversing recent local television station viewing trends." A BIA/Kelsey report on the business case for the transition shows that many broadcasters would recoup the costs of the transition within three years, the release said. "This new technology will give Broadcasters the ability to pursue multiple new business models which will significantly diversify their current revenue mix," Fratrik said.