WASHINGTON—Associations backed by the pay TV industry have voiced significant opposition to the NAB’s proposals for speeding up the transition to NextGen TV/ATSC 3.0.
In filing with the Federal Communications Commission, which has launched an inquiry into rules impacting the rollout of ATSC 3.0 broadcasts [FCC GN Docket No. 16-142 Authorizing Permissive Use of the “Next Generation” Broadcast Television Standard], the NCTA, the American Television Alliance (ATVA) and others have criticized NAB proposals that the FCC should set a firm cutoff date for ATSC 1.0 broadcasts and eliminate requirements to simulcast 1.0 content on the newer 3.0 broadcasts.
In its Jan. 20 filing, the NCTA. which represents major cable providers told the FCC that the transition “to ATSC 3.0 should remain market based, and the Commission should reject broadcasters’ requests for government intervention. Instead, the government should continue to prioritize protecting consumers from any harmful impacts.”
More specifically, the NCTA comments argued that “the simulcasting requirements in the Commission’s rules remain essential at this point in the transition given the broadcast industry’s decision to use a non-backwards compatible technology. The Commission should not foist the substantial costs of a premature conversion to ATSC 3.0 on consumers and MVPDs by abandoning the simulcasting and substantially similar protections at this time.”
Filings by the NAB, Pearl TV and other broadcasters have pushed for the end of simulcasting rules because it would free-up spectrum and allow them to better showcase the benefits of the new 3.0 broadcast standard.
The NCTA also argued that the FCC “should also reject any calls to grant must-carry rights to 3.0 signals. In today’s video marketplace, must carry requirements are no longer supportable under the First and Fifth Amendments. Extending must carry requirements to 3.0 signals would only exacerbate these constitutional infirmities.”
The filing argued that “MVPD distribution of ATSC 3.0 signals also presents numerous technical challenges, including issues that implicate the Commission’s existing rules regarding broadcast must carry and retransmission consent. The Commission should remain mindful of these challenges as the transition progresses.”
In terms of must-carry for 3.0 broadcasts, the NCTA argued that “requiring cable operators to incur additional substantial costs to upgrade their equipment to meet new carriage obligations would have significant economic impacts on regulated cable operators and interfere with their investment-backed expectations. In today’s highly competitive marketplace for video, these burdens are more severe and represent a far greater economic impact on cable providers than was the case when courts have considered these issues in the past.”
The NCTA also contended that “The Commission should also ensure that broadcasters’ use of spectrum serves the public interest and meets statutory requirements concerning ancillary and supplementary services, and it should take steps to contain any anti-competitive effects stemming from broadcast stations’ transition to ATSC 3.0.”
The NCTA warned that implementation of the broadcast standard posed a number of anti-competitive threats to the video market and argued that the FCC should adopt policies that would avoid those problems.
“If the Commission decides to permit stations to flash cut to ATSC 3.0 despite the early state of the transition and lack of demand from consumers, it should take additional steps to limit and contain the inevitable anti-competitive effects and harm to MVPDs and consumers,” the NCTA argued.
If the Commission decides to permit stations to flash cut to ATSC 3.0 despite the early state of the transition and lack of demand from consumers, it should take additional steps to limit and contain the inevitable anti-competitive effects and harm to MVPDs and consumers.
“The Commission should affirmatively require that patents relevant to the ATSC 3.0 standard be licensed on a reasonable and non-discriminatory (RAND) basis,” the NCTA urged. “Of significant concern, there has already been patent infringement litigation involving alleged ATSC 3.0 functionality where the jury awarded the patentee an ongoing royalty of $6.75 per television for four patents, exorbitantly higher than the rates for the two existing patent pools for ATSC 3.0 patents. Specifically, a pool comprising over 11,000 patents operated by Avanci charges $2-$3 per unit, and a pool of 50+ patents administered by Via Licensing Alliance similarly charges under $3 per unit. Constellation’s excessive royalty award prompted LG to suspend inclusion of ATSC 3.0-compatibility in its TVs for the U.S. market. This type of `patent ambush’ is particularly worrying given that many patents in the field claim patent-ineligible subject matter (as LG is arguing in the pending litigation), but it can take years of litigation to invalidate such patents.”
In its filings, the American Television Alliance also argued that the transition posed significant technical issues for pay TV operators and that they should not be required to invest significant amounts of money to comply with Must carry rules.
The ATVA said it “continues to be open to `voluntary and market-driven’ adoption of ATSC 3.0” and said the FCC should continue its “voluntary and market-driven” approach.
“From the MVPD perspective, the most significant concern about ATSC 3.0 is that the format is not backwards compatible with MVPDs’ existing distribution architecture, and many current set-top-boxes and consumer devices cannot support ATSC 3.0 streams and related features,” it stressed. “Developing ATSC 3.0 compatibility would require MVPDs to incur substantial costs for new equipment and system changes to receive and process ATSC 3.0 signals. Even then, most MVPDs could not deliver ATSC 3.0 signals to consumers. In other words, whatever improvements broadcasters might make to their signals using ATSC 3.0 are highly unlikely ever to accrue to MVPD subscribers and thus MVPD expenditures to accommodate ATSC 3.0 would be a dead weight loss.”
“We, therefore, urge the Commission to maintain the simulcasting requirement (and the substantially similar requirement),” the group concluded. “If the Commission were to decide otherwise, however, it should at a minimum require broadcasters—whether electing retransmission consent or must-carry—to deliver signals to MVPDs in a 1.0-compatible format at their cost. Otherwise, the Commission would be asking MVPDs (and their subscribers) to incur substantial costs to downconvert broadcast signals without any benefit to those subscribers. This would be arbitrary and capricious.”
The group also contended that “the primary benefits of the ATSC 3.0 transition appear not to be improvements to broadcast television, but rather the ability of broadcasters to use ATSC 3.0 signals for unrelated services like datacasting. This real possibility that broadcasters could use the vast majority of their spectrum for services other than free, over-the-air television raises significant legal questions, including under the Communications Act, FCC rules, and the Administrative Procedure Act—especially if MVPDs and their subscribers are expected to pick up the tab for such services.”
The full filing by the NCTA is available here.
The full filing by the ATVA is available here.
[This article is part TV Tech’s ongoing coverage of the FCC and NextGen TV; articles about the comments and filings from other companies and associations with different perspectives on these issues can be found here and here.]
