Legal Challenges Bigger Issue for 3.0 Than Technical Ones, Broadcasters Say

The biggest challenges to setting up an ATSC 3.0 station are legal rather than technical, said Pearl TV Engineer Dave Folsom Wednesday on a panel. Technical issues are “straightforward,” but programming agreements, sharing arrangements and rights issues generate an “immense amount of legal work” behind the scenes, said Folsom, who oversees Pearl's ATSC pilot project in Phoenix. “The legal piece is going to be by far the long pole in the tent,” said Sasha Javid, chief operating officer for the Spectrum Consortium, at the ASTC event.

Four stations have applied for 3.0 commercial licenses, and three were already granted, said Media Bureau Legal Adviser Evan Morris on another panel. The FCC started accepting commercial applications Tuesday (see 1905230065). The three granted applications are for low-power stations in Oregon, he said. LPTV stations don't have to maintain a 1.0 signal when they transition, they can “flash-cut” to 3.0. Representatives of SpectrumCo, PearlTV and America's Public Television Stations told us they aren't aware of any applications from their entities having been filed.

Setting up a designated market area to shift to the new format requires extensive agreements among stations involving hosting each other's signals but also requires getting permissions from varied programmers. Networks have to give permission for their content to be hosted, and syndication agreements may not apply to a 3.0 signal, Folsom said. Networks and programmers will likely “get used to it,” he said. Technical issues for setting up a 3.0 station didn't offer as many unexpected challenges as the “soft” legal side, he said.

Broadcasters in a DMA strategizing together over the switchover can raise antitrust concerns, Javid said. To avoid that, broadcasters should make sure every station in a market is presented with the choice to be part of the transition, broadcast officials said. In group discussions, broadcasters should also avoid discussing costs or vendor prices, Javid said. Those discussions could get “dicey” and be viewed negatively by the FCC, he said.

SpectrumCo's “strawman” transition projections had included cost sharing plans but no longer do so to avoid antitrust concerns and burdensome accounting, Javid said. Since most stations are owned by large groups, cost fluctuations between DMAs will “come out in the wash,” he said. Taking a big picture view also should ease concerns that the first “lighthouse” station in each market hosting the 3.0 signal of others is likely to incur the biggest costs, said engineer Dennis Wallace of Meintel Sgrignoli.

It could take roughly 15 years before broadcasters completely move over, Folsom said. Broadcast consolidation could speed that process, Wallace said. Larger groups can drive the transition faster, in part because they can “self-share” where they have duopolies, the broadcast officials said. SpectrumCo is planning to use this strategy to get “quick wins” by beginning the transition in markets where its members -- which include Sinclair and Nexstar -- have duopolies, Javid said.

With the 10th anniversary of the analog cutoff looming next month, “we can reflect on how the first digital standard served to lift all boats,” said ATSC President Madeleine Noland, presiding over her first ATSC conference since taking the helm two weeks ago from the retiring Mark Richer. “Now we have an opportunity to build on -- and even surpass -- that past success.” With ATSC 3.0, “we again have the potential to lift all boats as we did with ATSC 1.0,” she said. “Again, content producers will have great new story-telling tools such as high dynamic range, yet more pixels, multiple audio tracks, interactivity and more. And broadcasters will have new business opportunities.”