NCTA expressed worries about the ATSC 3.0 transition and local TV ownership deregulation, meeting Monday with FCC staff, said an ex parte letter posted Thursday in docket 16-142. NCTA, referencing our Nov. 2 report (see 1711010054), expressed “concern” with statements by Sinclair CEO Chris Ripley on an earnings call last week that the company started the process of determining the value of the patent holdings it has in 3.0 technology.
The conflict over ATSC 3.0 rules continued Thursday. Democrats inside and outside the FCC slammed the plan, as one of the biggest groups in communications that says it represents the public interest bickered over conflicts of interest with the main broadcaster association. Commissioners may not all OK the move when they vote on it in a week.
The draft ATSC 3.0 order “continues a troubling pattern of indifference at the FCC towards consumer privacy,” said Rep. Debbie Dingell, D-Mich., in a letter to Chairman Ajit Pai. “Although privacy concerns were raised in the record, it was not addressed at all in the draft order released by the Commission,” she said. The word ‘privacy’ is not even mentioned a single time in the entire draft order.” The new standard could include targeted advertisements, which raises questions about how demographic data will be gathered, Dingell wrote. She asked Pai how the FCC would coordinate privacy protection for 3.0 users with the FTC, how the technology involved collects data, whether it will require consumer consent, and how that data will be protected from hacking. Dingell highlighted 3.0’s lack of backward compatibility: “We should be having a robust dialogue about the privacy implications of this new standard as well as ensuring we are doing everything possible for consumers in any transition.” Commissioner Mignon Clyburn tweeted that Dingell's letter raised "important questions" about the draft order. "Many questions remain unanswered as @FCC contemplates moving forward," Clyburn said. An FCC spokeswoman told us the agency has received the letter and is reviewing it.
The draft media ownership reconsideration order’s “hybrid” approach to allowing combinations of two top-four network stations in the same market (see 1710260049) could lead to joint retransmission consent negotiation on behalf of the two stations, NCTA said in a meeting Thursday with aides to Commissioner Mignon Clyburn, recounted a filing in docket 14-50. The FCC “has found such joint negotiations to be anticompetitive and harmful to consumers,” NCTA said. Harms of joint negotiation are well supported in the record, and the FCC has to justify changing that finding to change the duopoly rule, NCTA said. If the agency moves ahead with the top-four rule change, it should bar such joint negotiations, or consider the impact on retrans negotiations as one of the criteria for determining whether such a combination will be allowed, the group said. The association argued there shouldn’t be an “arbitrary expiration date” on ATSC 3.0 simulcasting requirements, and expressed concern about the 3.0-related patents held by Sinclair: “The FCC cannot create a government-mandated monopoly for the intellectual property rights to build next-generation broadcast television products and then allow the patent rights holders to collect supra-competitive rents.” ATSC 3.0 could allow improved distance learning “on a customized local level,” blogged NAB Vice President-Spectrum Policy Alison Neplokh Tuesday. “Children could get lessons and materials customized to their curriculum at home without needing a broadband connection,” she said. “Low-income families in particular stand to benefit.”
CTA and NAB will team to run a transmission facility at WJW, Tribune Media's Fox TV affiliate in Cleveland, as a “living laboratory” to support implementation of ATSC 3.0, said the groups Tuesday in an announcement a little more than a week before FCC commissioners are expected to authorize 3.0's voluntary deployment (see 1710270063). The FCC granted NAB an experimental license to operate a full-power Channel 31 transmission facility at the site to help broadcasters and consumer tech companies prepare to deliver 3.0 products and services, the groups said. The associations will “oversee and manage the station’s activities,” they said. CTA told us a year ago it was in “the planning phase” for field-testing 3.0 reception at WJW (see 1611280030), which also ran the first live 3.0 broadcast of a major professional sporting event when it beamed Game 2 of the World Series between the Cleveland Indians and Chicago Cubs from Cleveland's Progressive Field in October 2016 (see 1610260072). The Tribune station for years also has hosted 3.0 technology field trials (see 1507130007). NAB has had an experimental license from the FCC for operating the Cleveland test station for over a year, spokesman Dennis Wharton said Tuesday. The license was renewed in September for a two-year extension, he said. As for whether the CTA-NAB initiative at WJW would continue under the station's Sinclair ownership if Sinclair's Tribune buy is approved, "we’re not commenting on potential future business transactions involving the Cleveland test station," said Wharton.
Gray Television welcomes the FCC's “imminent approval” of ATSC 3.0 deployments (see 1710270063), said CEO Hilton Howell on a Monday earnings call. “By granting broadcasters the freedom to evolve technically, the FCC enables us to embrace a new standard that should open new opportunities for broadcasters, as well as new and better ways to serve our viewers.” This month also will “finally bring regulatory relief from the FCC,” Howell said of plans at commissioners' Nov. 16 meeting to vote in favor of local ownership deregulation. “It’s simply incredible that the FCC imposed the one-to-a-market rule that still governs mid-sized and small television markets before the bombing of Pearl Harbor” in 1941, he said. “No one can sincerely dispute that the world has changed considerably in the past few years, let alone in the last 76 years. We are grateful that the FCC finally will begin to take some long-overdue steps that permit local stations to take the steps necessary to be competitive.” Gray has “benefits of really strong duopoly operations” in its existing markets, said Howell, when asked in Q&A if local ownership deregulation will open up the company to new merger and acquisition opportunities. That’s not to say there won’t be “a great deal more opportunities that we will have in our existing markets,” he said. Gray will “continue to look at other transactions to grow a broader scale throughout the United States,” he said. “Things have been relatively slow on the M&A front,” but the company expects “things to pick up fairly rapidly after the FCC comes to a final conclusion,” he said. “It is our intention to take advantage of that whenever we have an appropriate, and financially appropriate, opportunity to do so.”
NAB ridiculed pay-TV's “ludicrous advocacy” that over-the-air viewers would lose programming in the ATSC 3.0 transition, in meetings Thursday with staff of FCC Chairman Ajit Pai and the Media Bureau, said an ex parte posted Monday in docket 16-142. MVPDs’ “assertion” they “care deeply about the welfare of over-the-air viewers is laughable,” because they include “some of the least popular companies in America due to their unique commitment to providing dismal customer service,” NAB said: The companies “seek to pad their profit margins not only by dragging retransmission consent issues kicking and screaming into any proceeding that even tangentially affects television service, but now apparently by claiming to care whether viewers receive over-the-air signals.” NCTA CEO Michael Powell in Oct. 30 meetings with Commissioner Brendan Carr (see 1711030059) emphasized “the need for the Commission to ensure that the broadcasters’ voluntary roll-out of ATSC 3.0 does not disrupt consumers or impose costs and burdens on cable operators and their customers, said a Nov. 1 filing. “Back down here on planet Earth,” NAB recommends the FCC “adopt a standard for expedited processing of applications that mirrors the coverage area standard” the commission used during the DTV transition. The “flexibility” given broadcasters during that transition “applies with equal force” to 3.0, it said. NAB’s analysis suggests that, under the draft 3.0 order’s standard, 22 percent of TV stations “would have no available simulcasting partners that could qualify for expedited processing, and an additional 12 percent of stations would have only a single potential partner,” it said. NAB wants the agency to “clarify” language in the 3.0 order on encryption to say that while free next-generation signals may be encrypted, “they do not require special equipment programmed by a service provider.”
Arguing that Sinclair still hasn't articulated a case for why its proposed $6.6 billion Tribune purchase is in the public interest, an array of industry groups, programmers and state attorneys general pushed against FCC approval or called for conditions. The docket 17-179 comments were in response to Sinclair's Oct. 5 replies to an agency information request (see 1710060055). The FCC's 180-day unofficial "shot clock" of the merger review remained paused Friday at 104 and the agency didn't say when it might restart.
Sinclair is “very pleased” with the draft ATSC 3.0 order the FCC released Oct. 26 and on which commissioners will vote on Nov. 16 (see 1710270063) because “it gives the industry a lot of flexibility in deploying” the next-gen TV standard, “which was our main objective,” said CEO Chris Ripley on a Wednesday earnings call. His boss' comments on backing local ownership deregulation at the FCC drew rapid criticism from opponents of Sinclair's proposed Tribune buy.
The FCC majority engaged in “direct attack on consumers and small business” during Chairman Ajit Pai’s 10 months, said Commissioner Mignon Clyburn in a news conference Wednesday preceding a briefing from the Voices for Internet Freedom coalition. In both events, Clyburn castigated Pai and the FCC majority for “hypocrisy” and a stream of policies she said favor large companies. “This is a sad path,” Clyburn said. Commissioner Jessica Rosenworcel, Democratic National Committee Deputy Chairman Rep. Keith Ellison of Minnesota and Rep. Ro Khanna, D-Calif., were also critical of the FCC majority. Net neutrality is “a justice issue, a civil rights issue,” Khanna told the event. FCC leadership is “fixated on billion dollar public companies and what it best for their bottom line,” Clyburn said. Congress held a hearing on net neutrality Wednesday (see 1711010052).