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'Consumer and Regulatory Win'

Draft ATSC 3.0 Order Requires 'Substantially Similar' Programming, No Retrans Restrictions

The FCC’s draft ATSC 3.0 order requires broadcasters to offer the same programming on both their simulcast 3.0 and 1.0 stations but appears to have looser restrictions on contours and image quality, will allow low-power TV flashcuts, and as expected (see 1710170048), doesn’t interfere with retransmission consent negotiations involving 3.0, according to a draft order released Thursday. The draft includes a further notice in which the agency would seek comment on using vacant channels during the 3.0 transitions and on waivers for simulcasting rules.

Though broadcast entities seemed largely pleased with the draft, an industry official said they’re likely to seek more flexibility for simulcasting before the Nov. 16 vote. The order is a positive for broadcasters and going in the right direction, but they may seek some changes on “details and corner cases,” said Pearl TV Managing Director Anne Schelle in an interview Friday. MVPD and consumer groups praised the simulcasting restrictions but expressed disappointment in the lack of rules on retransmission consent. Without such rules, the transition to the new standard “is likely to raise prices for cable customers by a large but unknown amount,” said Michael Calabrese, director of the Wireless Future Project at the New America Foundation, in a statement.

Industry officials said FCC voting on the item could break along on party lines. All the commission’s Republicans are expected to support the draft order, but Commissioner Jessica Rosenworcel signaled concern about the standard’s transition plan and has been critical of 3.0 booster Sinclair Broadcast’s proposed merger with Tribune (see 1710120019). "It is troubling that the Sinclair Broadcast Group benefits more than anyone from FCC approval of ATSC 3.0 as proposed, thanks to patent royalties and the leverage it gives them to demand higher retransmission consent fees,” said Calabrese. Commissioner Mignon Clyburn’s vote is considered harder to gauge, industry officials said. Though she voted in favor of the 3.0 NPRM, she expressed concerns then about consumers losing service (see 1702230060) and has been critical of the Sinclair deal.

The American TV Alliance said Friday it appreciates the order’s inclusion of “some measures to protect consumers,” but it will work to prevent the order from leading to higher bills for consumers and loss of service. In a call with reporters Thursday before the draft order’s release, ATVA officials said without strict requirements that simulcast 1.0 signals retain a broadcast contour, consumers could be left without TV signals, and a lack of retrans rules would lead to additional fees for consumers (see 1710260049). "We conclude that it is premature to address any issues that may arise with respect to the voluntary carriage of ATSC 3.0 signals before broadcasters begin transmitting in this new voluntary standard," the draft order said.

The order would require the 1.0 signal and 3.0 signals to be “substantially similar” for five years. Programming must be the same, except for “programming features that are based on the enhanced capabilities of ATSC 3.0, advertisements, and promotions for upcoming programs.” Though the order says the 1.0 simulcast channel “must continue to cover its entire community of license,” and losses of 1.0 service will be considered in granting 3.0 license applications, it also says “to the extent that service loss is no more than five percent of the population served by the existing station, we will provide expedited processing of such applications.”

That’s protecting some viewers but not all of them, a pay-TV official said. Since the order would allow broadcasters to switch to the new standard before 3.0 compatible equipment is available to consumers, some viewers will lose service, the official said. Because the draft order allows broadcasters to simulcast in standard definition, viewers could also lose HD service, the pay-TV official said.

ATSC 1.0 is “still our flagship service,” said Schelle. Though stations may switch to 3.0 in some “beta markets” starting in 2018, a “real consumer push” won’t occur until later, she said. ATSC 3.0-compatible consumer devices such as TVs and adapters won’t be available for retail purchase until at least 2019, she said. Consumers won’t be “stranded,” she said. Many broadcasters are going to be interested in figuring out the new standard for themselves through “lighting up” a 3.0 signal, said Sinclair Vice President-Advanced Technology Mark Aitken in an interview. The broadcaster spectrum consortium involving Sinclair, Nexstar and Univision is formalizing deals on which stations will broadcast 3.0 and which will serve as “lighthouses,” Aitken said.

NAB President Gordon Smith praised the draft order, adding that NAB is looking forward “to working with the FCC to ensure that broadcasters have maximum flexibility" with the new standard. Jerald Fritz, executive vice president-strategic and legal affairs for One Media, said it's a “clear consumer and regulatory win without the imposition of heavy-handed regulation." Said Jonathan Schwantes, senior policy counsel at Consumers Union: “We urge the FCC to put consumers first as they move forward on this transition, and work to ensure that consumers aren’t left paying the price for this transition.”