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21 May 2020

Relief for ATSC 3.0 as FCC proposes broadcast internet bailout

Some big announcements around ATSC 3.0 were expected at last month’s fallen NAB trade event, so the stage was set at the virtual replacement – NAB Show Express – for industry representatives to set the world alight. In the end, it was the FCC rather than the broadcasters providing the ATSC 3.0 headlines – planning to shake up media ownership rules to allow broadcasters to provide internet services via NextGen TV.

This is further evidence for how the hybrid broadcast broadband video standard continues to be completely mollycoddled by the FCC – spoon-feeding the market new opportunities as initial dreams slide out of view.

To us, the proposal by FCC Commissioner Brendan Carr – to vote on broadcast internet being exempt from legacy media regulation – represents an obvious bailout for ATSC 3.0. Faultline has reiterated how this market was slow off the mark long before lockdown disaster struck and ultimately would fall short of its targets, while executives have only recently admitted that ATSC 3.0 rollouts will not be reaching the intended target of 40 markets this year.

From both a technical and regulatory standpoint, delivering broadcast internet over ATSC 3.0 is an absolute minefield. Internet services based on ATSC 3.0, which benefits from an IP backbone while ATSC 1.0 does not, would function on the technology’s one-to-many architecture, compared to the one-to-one architecture of cellular networks. That said, ATSC 3.0 networks are tipped to become complementary to 5G networks – perhaps in a similar way to how peer-to-peer networks have become complementary to the traditional server-based CDN.

We don’t have to look particularly far for a solid example, with Sinclair Broadcast announcing a plan in January with SK Telecom to establish a 5G-ATSC 3.0 testbed in Jeju Technopark in Korea, involving the translation of 5G-ATSC 3.0 services to Sinclair’s television station (WJLA) located in Washington D.C.

At the time, we said the tie-up between SK Telecom and Sinclair Broadcast had potential to be the greatest catalyst to the commercial deployment of ATSC 3.0 services since the FCC began allowing OTA broadcasters to roll out ATSC 3.0 service updates more than two years ago. That rings true this week. It’s worth noting that SK Telecom got ahead of the curve thanks to an expensive in-house network architecture, while most operators are happy to wait for standardized affordable virtual radio access networks.

Of course, people will point to past attempts like LTE Broadcast, which flopped, although the cellular broadcasting mode FeMBMS (Further evolved Multimedia Broadcast Multicast Service) has provided some momentum in the mobile broadcast market. The FeMBMS broadcast mode combines well with the High Power High Tower (HPHT) model to deliver content cost effectively across large coverage areas up to 60km.

Remember when ATSC 3.0 was tipped to bring broadcast channels to mobile devices? That idea was quickly brushed under the carpet as companies claimed TV screens were always the primary target. Returning to the idea of handset delivery therefore brings us full circle to the question of which manufacturers will equip devices with ATSC 3.0 receivers? Not much has progressed since One Media 3.0, Sinclair Broadcast’s dedicated next-gen platform development arm, revealed silicon at CES 2019 designed to accelerate the adoption of ATSC 3.0 across markets with direct-to-mobile TV capabilities and broadcast/broadband convergence systems.

Meanwhile, the FCC’s fledgling plan is to allow broadcasters to provide broadcast internet services directly or indirectly, by entering into leasing arrangements with third parties – presumably using the same 6 MHz channels presently allocated for DTV services.

The FCC is seeking comment on two things. Firstly, the potential uses and applications of excess broadcast spectrum capacity resulting from the transition to ATSC 3.0. Secondly, whether the amount and method of calculating the ancillary services fee should be reconsidered given the new potential uses of excess spectrum capacity.

As with all FCC Notices of Proposed Rulemakings, the ‘Promotion of Broadcast Internet Innovation Through ATSC 3.0’ is written to inflict maximum confusion. However, we think it comes down to a decision dating back to 2001, when the Commission concluded that the ban on advertising applies to all broadcast programming streams provided by non-commercial educational (NCE) licensees, but does not apply to ancillary or supplementary services on their DTV channels, such as subscription services or data transmission services. Ultimately, this meant such services do not constitute broadcasting – and therefore NCE broadcasters are permitted to offer broadcast internet services.

When Faultline said in early April that the market opportunity for NextGen TV hangs precariously on loosened restrictions in the coming months, we were referring more to physical restrictions on movement, rather than restrictions on media practices driven by the FCC. But here we are with another get out of jail free card.

Just a couple of months ago, the FCC adopted a proposed rulemaking for technical changes for the hybrid standard, relating specifically to distributed transmission systems (DTS). The National Association of Broadcasters and America’s Public Television Stations petitioned the FCC to change these decade-old rules, and the commission is seeking comment on how to facilitate DTS signals to spill over beyond a station’s authorized service area by more than the minimal amount currently allowed.

Current DTS rules are too limited to allow for sufficient coverage, as such systems require multiple transmitters spread throughout a broadcaster’s footprint, as opposed to one big transmitter.

Specifically, Commissioner Carr’s Declaratory Ruling aims ensure that Broadcast Internet services are not weighed down by legacy media regulations, by clarifying that the FCC’s broadcast television station ownership rules do not apply to leasing arrangements between broadcasters and third parties for the provision of Broadcast Internet services.

It would remove regulatory uncertainty that could hinder the development of any new use cases of broadcast spectrum that the ATSC 3.0 standard enables, by clarifying that longstanding TV station ownership rules do not apply to the lease of spectrum to provide Broadcast Internet services.

The ISPs and MNOs should oppose the move with everything they have. Of course, these companies provide the pipes for broadcasters to deliver their content over IP, reaching millions of cord cutters and cord nevers – providing a vital source of revenue for broadcasters during these particularly tough times.

On the other hand, allowing TV stations to sell internet services either directly or indirectly would certainly be good for competition in both the fixed broadband and cellular sectors, and help to close the digital divide that has been highlighted during the pandemic.

“Broadcast Internet services are poised to offer a new and competitive broadband pipe. These services can leverage the power and coverage of broadcast television spectrum to deliver high-speed, 25 Mbps internet services. This will help ensure that market forces determine the highest and best use of Broadcast Internet services and allow innovators to generate the geographic footprint that may be needed to deliver competitive offerings,” said Carr.

That may be true, yet removing regulatory barriers one by one to allow the broadcast market to thrive, while continuing to mount pressure on internet technology companies after unravelling net neutrality, is peak FCC.

Anne Schelle, Managing Director at Pearl TV, was speaking at NAB Show Express prior to the FCC’s announcement, so did not discuss the broadcast internet opportunity directly, but did provide some insights into the state of the market.

“We are seeing a delay of about a quarter from Covid-19, simply because of access to stations. But there is a lot of remote provisioning and a lot of infrastructure software being enabled, so vendors can remotely configure these stations which is good news. There will be lots of announcements this summer as States open up,” said Schelle.

“We won’t make the 40 markets this year, but a significant amount of markets will go up later this year to support TVs on retail now from Samsung, LG and Sony. Broadcasters are now connected at the hip to these CE TV manufacturers for the first time,” she added, trying her best to deliver a few positives from a pretty stagnant situation.