No Slowing Down Incentive Auction for ATSC 3.0, Media Bureau Chief Says

That’s because “all the current commissioners” at the FCC “are committed to doing the auction as quickly as possible,” Lake said. “We do perceive a coming crunch for wireless broadband spectrum” that’s projected to start as soon as 2015, he said. “We know that even if we hold an auction in 2014, that spectrum won’t be able to be lit up as services for a couple of years after that. So we see an urgency in meeting the demand on that side of the industry.” There’s also “continued uncertainty” among broadcasters about the auction and the repacking that’s “harmful” and will continue to be so if the auction is delayed, he said. Such uncertainty that precedes an auction is “inevitable,” Lake said, “and we'd like to keep the period of that uncertainty as short as possible."

Broadcasters, Lake said in his prepared remarks, have urged that the auction and its post-auction repacking plan be synchronized with the implementation of ATSC 3.0, which developers have said would be finalized by the end of 2015 as a candidate standard. “I can see why synchronizing these two activities would have some appeal,” Lake said. “But it is important to recognize that it almost certainly won’t happen. We've set a goal of adopting rules this year and holding the auction in 2014 in order to meet a shortage for spectrum in wireless broadband that may appear as early as 2015. We're in full swing on that project, and we think those target dates are still aggressive, but doable.”

However, developing and implementing ATSC 3.0 “may be a multi-year affair, even with the pedal to the metal,” he said, noting it took 11 years for the first digital TV signal to go on the air after the FCC first established its DTV advisory committee. He hopes transitioning from one DTV standard to another will be quicker than the switch from NTSC to ATSC, he said: “But the time frame will almost certainly be longer than the time frame we contemplate for the incentive auction.”

In Q-and-A, Lake assured his audience that “no one is more concerned than I about the challenge of getting the repack done, and in particular getting it done within the three-year period Congress has given us” under the Spectrum Act. The law gives the FCC three years after the close of the auction to finish reimbursing broadcasters for moving expenses, he said. “Unless we can reimburse before they actually make the expenses -- and that’s something we're exploring -- we see a very tight timetable for getting that repacking done, and we're very concerned about the adequacy of all the different kinds of resources that will need to be deployed in order to get the repack done.” The FCC “will need all the help we can get from the industry in order to make sure that repacking process is a success and can be done in the time that Congress gave us."

A next-generation ATSC 3.0 terrestrial broadcast standard “would represent a fundamental technology shift that could be the catalyst for new business models and new revenue streams for broadcasters,” Lake said in his prepared remarks. ATSC 3.0 could enable such benefits as higher data payloads, broadband interactivity, personalization of the viewer experience, premium services and targeted advertising, he said. Wireless carriers “have been exploiting these functionalities for a decade, and broadcasters would benefit from doing so,” Lake said. In considering whether industry should speed development of ATSC 3.0, “I think there are reasons not to let the grass grow under your feet,” Lake said.

"Innovation” and “experimentation” should be part of broadcasters’ DNA, and ATSC 3.0 will help enable that, Lake said. “The TV industry has to evolve to keep pace with constantly changing consumer behaviors and expectations,” he said. “Mobility and interactivity are today major drivers for video consumption. These have been largely the domains of the wireless companies, but there’s no reason why broadcasters can’t offer users greater benefits in these spaces.” Moreover, as 4K TVs “become popular, broadcasters will want to be in the game with a way to deliver 4K video over the air."

Moving to a new ATSC 3.0 standard “will be a big decision, and developing a standard will take a lot of hard, sustained work,” Lake said. “Those steps are in the first instance for the industry [to take], not the commission,” he said. “Our formal role will be to consider a rulemaking to bless any new standard that may be brought to us as we did with the original ATSC standard."

The incentive spectrum auction will be a “tectonic event” in the history of the broadcast industry, Lake said. “Many broadcasters expressed an early concern that the incentive auction might interfere with their exploiting more innovative and efficient uses of their spectrum. I think and I hope we've made clear to this point that the contrary is true. Any broadcaster who chooses not to participate in the auction will retain all of the rights it would otherwise have to explore innovative uses of its spectrum.” Last year’s Spectrum Act also requires the FCC to “make all reasonable efforts to preserve the coverage area and population of TV stations,” post-auction, he said.

Asked by an audience questioner whether the FCC has “given thought” to how the transition to ATSC 3.0 might occur without broadcasters having the second-channel capability they had in the transition from analog to digital, Lake said “we've given it a great deal of thought and I hope we have further thought and better ideas by the time we have to do it.” One idea the commission is exploring is that “there will be some number of stations that will be going off the air because they've contributed their spectrum to the auction,” he said. “They will have facilities and channels that won’t be immediately used by the wireless industry, and we might consider using those as a way to keep stations on the air … essentially as a parking place for them during the transition. Our goal and I'm sure the industry’s goal is that no one go off the air for any extended period of time so they might lose their viewers."

Broadcasters in a panel discussion later in the day Thursday stressed the urgency of a finalized ATSC 3.0 standard amid the increasing competition from wireless carriers. Mark Aitken, vice president-advanced technology for Sinclair Broadcast Group, said broadcasters should be able to demonstrate a working 3.0 standard in “the next year and a half,” nearly in time for the auction. Though he blasted the auction as an expensive and complicated transition to more of “the same,” calling it “lunacy,” he also said the auction was the FCC’s obvious response to a congressional mandate. Broadcasters seeking delay would have to “educate Congress and spell it out in terms they understand” if they wanted to delay the auction by six months or a year, he said.

Brett Jenkins, vice president of LIN Media, said before the broadcasting industry could tackle issues with applicable policy or with its business strategy, it would have to address its underlying technology. “The technology has to proceed faster than the other two avenues can work themselves out, because the technology needs to be there when folks are ready with the business plan and when the policy piece is able to get done,” he said. “Look, I'm no political expert, but when it comes to policy, you have to jump when the moment is right, when there’s an appetite to get something done, you have to be ready to do it. If we're not ready with the tech fast enough, I think we do risk losing the opportunity.”

Broadcasters also stressed the need for a flexible, forward-focused standard that could apply to new technologies and devices. Jimmy Goodmon, vice president of Capitol Broadcasting Company’s new media group, said the new standard should include a single chip or single chip hybrid system that would work on any mobile or stationary device. “In my opinion everything that can display video is a television and therefore I should get connected to that device,” he said. “I'm tired of those consumer electronics guys and the FCC and everybody else out there telling us what a television is and what a television is not.”

Broadcasters on the panel said development on the ATSC 3.0 should not wait for global harmonization if those efforts would delay its deployment. John McCoskey, chief technology officer for PBS, said some harmonization could and should happen, but full harmonization would add unnecessary delay to the adoption of ATSC 3.0. “I think we need to be pragmatic,” he said. “At all levels, in the layers of distribution of hierarchy, the physical layer is probably not obtainable, and if we try to focus on that it will probably slow down the process.” But at the upper levels of the discussion, there is “still a lot of harmonization that can happen and should happen” and won’t get in the way of the standards process, he said. Aitken said companies like Samsung and LG have substantial incentive to work quickly toward harmonization even without an official global standard, because “at the end of the day they don’t want to be building a different thing for every different market that they're feeding into; it just doesn’t work that way anymore.”

Erik Moreno, Fox senior vice president-corporate development, agreed that urgency was essential, but offered a different vision for leveraging the assets of the broadcast industry. He said the industry must vie for its survival as Verizon and other wireless carriers begin to enter the broadcast space with transmissions over LTE, agreeing with the other broadcasters that “it’s not an option to go as slow as we're going.” But he said he sees a larger solution to the issue of survival: Rather than remain reliant on advertising and retransmission fees, broadcasters should add a third revenue stream. He said its assets are in its collective spectrum, and if the industry could come together, it could repackage and resell that collective spectrum. “The only thing that stops us is ourselves, because we don’t know how to operate as one single unified body,” he said. Asked whether the industry could actually come together on an issue so massive, he said, “At the end of the day there is nothing greater than survival to get you to do something. … The opportunity is so massive -- I am talking multi-billion dollar opportunity -- and coupled with the fundamental threat of annihilation, it can get us somewhere.”