Party-Line Vote Expected on ATSC 3.0 Order, With Few Concessions to MVPDs

The FCC’s draft ATSC 3.0 order is expected to be approved 3-2 on a party-line vote, and the few changes since it was circulated last month will largely favor broadcasters, industry and eighth-floor officials told us. MVPD groups lobbied hard for changes to the 3.0 transition plan, but broadcast and pay-TV officials said the final version would include few changes favoring their positions. Sinclair executives, meanwhile, downplayed privacy concerns with 3.0 (see 1711140046).

Though the item won’t be approved until Thursday authorizing 3.0's voluntary deployment, broadcast consortium Pearl TV announced plans Tuesday for a “model market” in Phoenix involving 10 TV stations owned by E.W. Scripps, Fox, Meredith, Nexstar, Telemundo, Tegna and Univision. The model will “help foster industry consensus and drive ecosystem development,” said Pearl. The move drew praise from FCC Chief of Staff Matthew Berry.

Commissioner Jessica Rosenworcel has been critical of the proposed transition since shortly after retaking her seat (see 1710120019), and her expected no vote won’t be a surprise, industry officials said. An eighth-floor official said the FCC majority and minority weren’t close to a compromise. “Commissioner Rosenworcel has been abundantly clear on her concerns about how ATSC 3.0 is being implemented,“ emailed Policy Adviser Kate Black. “She included it in her first public remarks since returning to the Commission and made a speech last week” (see 1711090064).

Though Commissioner Mignon Clyburn had been viewed as a possible partial dissent, she's now seen as a full dissent. Last week, she began a Twitter campaign challenging aspects of the draft order. “Me and the @FCC seem to have different ideas” about whether the draft item includes a “robust” consumer information campaign, Clyburn tweeted Tuesday.

Clyburn’s top aide, David Grossman, told us he had been recused from the draft until last week on the advice of ethics officials because he was engaged in potential employment discussions with “an outside party.” When those discussions ended, Grossman got clearance Nov. 6 to participate in matters he previously had been recused from, he said. Grossman told NAB he was no longer recused, in a Nov. 8 meeting with CEO Gordon Smith, according to an ex parte filing in docket 16-142.

Many broadcast industry officials believe the Democrats are in part opposed to the standard because of its close association with Sinclair, which for years has been 3.0's strongest broadcaster advocate. Rosenworcel and Clyburn have both been critical of Sinclair buying Tribune. Rosenworcel linked the new standard to that deal in a speech last week, citing Sinclair’s holding of essential 3.0 patents.

“There have been almost 9,500 patents/applications disclosed to the ATSC relating to the 3.0 standard. Sinclair/One Media have ... 12," emailed Jerald Fritz, One Media executive vice president-strategic and legal affairs. “The business upside for Next Gen TV simply dwarfs by orders of magnitude any possible patent royalties that Sinclair might realize,” he said. “For Commissioner Rosenworcel, this isn’t about playing politics, this is about the protecting the public interest,” said Black. “She was a point person for the digital television transition during the Bush and Obama Administrations. She has a long record of working on these issues and clearly knows how to implement this new standard in a way that fosters innovation and protects consumers.”

Clyburn "considers any insinuation that a vote on an item before her is motivated by politics to be a personal and professional insult," a spokesman said. "She refuses to sink as low as those who would question her integrity, her 19 years of public service, her willingness to listen to all parties, or her ability to distinguish one docket from another.”

The final item is expected to closely resemble the circulated version, said opponents and proponents. It's expected to include a shot clock for broadcasters that don’t receive expedited processing of their applications to begin airing 3.0, and more flexibility for the rules on broadcaster outreach programs to consumers.

Though pay-TV officials requested stricter simulcast requirements and rules on retrans negotiations, the order isn’t expected to lean that way, broadcast and MVPD officials said. NCTA President Michael Powell called Commissioner Mike O’Rielly and Chairman Ajit Pai Nov. 8 to ask for changes to the item to keep costs from being passed to MVPDs, a filing said. “Given the substantial complexity and costs for MVPDs to carry ATSC 3.0 signals (costs ultimately borne by consumers), the Commission should make clear that it will scrutinize efforts by broadcasters to obtain premature carriage of ATSC 3.0 by unreasonably withholding access to ATSC 1.0 signals.”

The order would require full-power broadcasters to offer “substantially similar” content on 1.0 simulcast “lighthouses” as on 3.0 streams for five years, though the obligation to simulcast won’t end without a further rulemaking. Low-power broadcasters will be able to transition right away. Broadcasters with simulcast plans that cause no more than a 5 percent service loss to their coverage area would receive expedited processing. Broadcasters have strong market incentives to preserve the quality and coverage of their signals during the transition, Pearl with Cox Media, Graham Media and Hearst Television executives told Pai, Rosenworcel, Commissioner Brendan Carr, O’Rielly and an aide to Clyburn in a Nov. 8 meeting.

The Phoenix model market is expected to let broadcasters test aspects of 3.0 such as interoperability with MVPDs and station configurations, said Pearl Managing Director Anne Schelle. “What we learn in Phoenix will be critical for a successful deployment of next-generation TV across the country.” The model market is expected to begin “soon,” the release said, and Schelle has said 3.0 beta testing is likely to begin in 2018 (see 1710270063).