Sinclair/Tribune Woes Could Slow ATSC 3.0 Rollout, Not for Long

The likely unwinding of Sinclair’s buy of Tribune and the related FCC hearing designation order are unlikely to derail rollout of ATSC 3.0 but might cause it to take longer, said supporters and critics of the new broadcast standard (see 1807270002). Sinclair/Tribune would have given the standard backing of a broadcaster reaching 60 percent of the U.S., but the entire industry is now heavily invested in ATSC 3.0, said broadcasters, industry officials and lawyers. Sinclair’s plans for the new standard predate its plan to buy Tribune, said Mark Aitken, Sinclair vice president-advanced technology. “NextGen TV will move forward regardless,” said New America Wireless Future Program Director Michael Calabrese, a frequent opponent of 3.0.

The speedy deployment was one of the primary public interest benefits presented by Sinclair as reason to approve the takeover. Though 3.0 supporters said the deal had no bearing on the standard, Sinclair claimed the opposite in filings, saying the duopolies and greater reach would aid adoption. “The ATSC 3.0 benefits are real and transaction-specific,” Sinclair said. “By giving Sinclair a more national spectrum footprint, rather than having to put together a patchwork of separate broadcast stations, the merger will allow Sinclair to deploy ATSC 3.0 more widely, efficiently, and quickly, thereby accelerating its roll-out.” Sinclair and Tribune didn't comment.

It follows that without a Sinclair-owned Tribune, the rollout won’t enjoy an accelerated pace, broadcast attorneys conceded, though all said it's unlikely such a slowdown would be more than temporary. NAB and the industry’s largest broadcasters are all committed to 3.0 and will proceed regardless, said Holland & Knight broadcast lawyer Charles Naftalin. The deal was announced before the 3.0 order was approved, an advocate noted. The standard now has broad support, the advocate said.

The deal's probable death will means uncertainty for Tribune's stations, but it’s likely any buyer interested in investing in Tribune’s holdings will see supporting 3.0 as a profitable course, said many. The whole industry is moving in that direction, attorneys said. Still, lack of a commonly owned broadcast behemoth could make assembling the nationwide footprint needed to allow broadcasters to compete with wireless companies more complicated, or put more pressure on the Spectrum Consortium, the 3.0 collective that includes Sinclair, Nexstar and Univision. “The Sinclair/Tribune merger is completely separate and unrelated to the consortium,” said a Nexstar spokesperson. “The spectrum consortium was established prior to the announcement of the Sinclair-Tribune transaction and therefore is not reliant on its eventual outcome.”

ATSC 3.0 groups said the lack of a deal wouldn't affect the new standard at all. “Nothing that happens in M&A is going to slow down deployment of Next Gen,” said Spectrum Consortium President John Hane. “Stations are moving ahead regardless.” It's an industrywide standard developed by more than a hundred companies, said Pearl TV Managing Director Anne Schelle. “Regardless of industry consolidation,” the standard’s “trajectory is not going to change,” she said. There are “many new consortium members in the pipeline,” said Hane, saying the group will have “full coverage.” Aitken and Schelle said trials and planned rollouts of 3.0 technology are on schedule.

Any consequences from a finding of a lack of candor in Sinclair’s dealings with the FCC on the Tribune deal are also seen as unlikely to affect ATSC 3.0. If Sinclair were to proceed with the hearing, it would take years to get to a final result, by which time the new standard would be far along, Naftalin said. Though the forms for applying to broadcast in 3.0 haven't been issued, it’s seen as unlikely they will include character questions, and the FCC is unlikely to weigh such matters in a minor change application. An ongoing ALJ proceeding on Sinclair isn’t likely to affect other broadcasters in the Spectrum Consortium, or prevent Sinclair from making arrangements in the transition, lawyers said. Calabrese agreed: “Because Sinclair holds the primary patents for ATSC 3.0, the company will still enjoy growing market power and leverage in retransmission consent negotiations as station groups and TV equipment makers move to ATSC 3.0, all of which will occur with or without the Tribune assets."