Draft ATSC 3.0 Item Thrills Broadcasters but Raises Questions on DRM and Carriage

In the FNPRM -- set for a vote Oct. 28 -- the agency recognized that broadcasting is a public service, Public Knowledge said in an ex parte filing posted Tuesday. “The NAB’s proposed approach to ATSC 3.0 undermines the very features that make broadcasting valuable.”

Gray Television Senior Vice President Rob Folliard said in an interview Tuesday that “the FCC has given us a lot of questions that we need to answer, and I expect that we will.”

The draft FNPRM proposes eliminating FCC rules for stations switching to ATSC 3.0, which broadcasters have blamed for slowing the transition to the new standard. But it only seeks comment on NAB proposals for implementing a tuner mandate and setting a certain date for the sunset of 1.0.

Folliard said the lack of tentative conclusions on the tuner mandate and 1.0 sunset aren’t negatives, and he's “thrilled” by the FNPRM. The current FCC has generally avoided tentative conclusions in major NPRMs, he said, pointing to last month’s largely conclusion-free item on the 2022 quadrennial review (see 2509300062). Folliard noted that broadcasters have been pushing for years for the agency to eliminate the substantially similar and simulcast requirements for stations transitioning to the new standard. “I wish the FCC would have done this in 2022, but we’ll take whatever relief we can get whenever we can get it.”

New Street analyst Blair Levin said in an email to subscribers that the draft item's exclusion of a tuner mandate or 1.0 sunset suggests that the FCC “will not drive the transition to 3.0 as fast [as] its advocates (particularly Nexstar and Sinclair) would like and is more favorable to MVPDs like [Comcast] and [Charter] and to manufactures than it appeared it would be in the spring.”

The FCC’s moves to issue an ATSC 3.0 item so soon after kicking off the 2022 quadrennial review and to seek comment on the national ownership cap show that the broadcasting industry is a priority for Carr, Folliard said. “In the midst of a government shutdown, he’s able to push out an NPRM on [next-generation] TV. I think that shows where his head is at.”

The draft item is expected to get approval from both FCC Republicans, but it isn’t yet clear how Commissioner Anna Gomez will vote. In her remarks on the September quadrennial review NPRM, Gomez grouped the 3.0 transition with the elimination of the national ownership cap and rollback of local ownership rules as “complex proceedings” on the future of broadcasting, and she’s widely seen as opposing NAB’s positions on the other two matters. She conceded then that broadcasters faced real financial pressures, but she also expressed concern about ATSC 3.0 datacasting. “This may well be a great use of spectrum, but we should certainly consider the policy implications of allowing this before it happens.”

'Widespread Consumer Frustration' on Encryption

The draft item asks several questions about the use of digital rights management (DRM) encryption in ATSC 3.0 broadcasts, citing “thousands of consumer comments" filed in docket 16-142 "opposing the use of encryption on free [over-the-air] broadcast signals.”

“We acknowledge the widespread consumer frustration expressed in these filings," the agency says in the draft. "We seek to ensure the public’s ability to easily watch stations’ free OTA signals in ATSC 3.0 just as they do today.”

Broadcast consortium Pearl TV has said DRM is necessary to protect broadcaster content, but consumer write-in campaigns and Public Knowledge have argued that it's being used to block some device manufacturers anticompetitively. The draft FNPRM also says the FCC seeks “to provide regulatory certainty to equipment manufacturers (including those who incorporate decryption keys/capabilities in their devices) and ensure that broadcasters’ chosen encryption regime, if any, does not impose unreasonable costs and burdens on them.”

Public Knowledge, a frequent critic of the current FCC, praised the agency for focusing on the DRM issue but said it didn’t go far enough. The FCC should “reaffirm that broadcasting must remain universally receivable without private authorization” and that “DRM and proprietary certification are inconsistent with the public nature of the airwaves,” the group said in its filing.

Gray's Folliard said the questions on DRM show that the FCC is doing its job. The agency “needs to make sure the DRM works, and they're asking a lot of important questions, and if we are unable to answer them appropriately, then shame on us.”

Challenges of Must-Carry Rules

The draft item also takes up MVPD concerns about the must-carry rules and the cost that cable and satellite companies will incur to alter their systems to be able to carry broadcaster signals. “We seek comment on the technical challenges that MVPDs face in carrying 3.0 signals, either by down-converting them or passing them through directly to subscribers.” Under current FCC rules, 3.0 stations can’t assert must-carry status, but the draft item seeks comment on allowing them to do so. NCTA has argued that requiring must-carry of 3.0 signals would violate the First Amendment.

In addition, the draft item asks questions about how the 3.0 transition and broadcast datacasting efforts could affect “the fundamental use of broadcast spectrum.” The FCC “has said that it expects the ‘fundamental use’ of television broadcast spectrum to continue to be the provision of free, over-the-air television service, but has not yet addressed the question of how much of its capacity a Next Gen TV station must ultimately devote” to such broadcasting.

MVPDs and others have said the agency should consider requiring broadcasters to dedicate a specific amount of spectrum to broadcasting. “NAB has demanded rules that would permit broadcasters to devote more than 95 percent of their broadcast spectrum to non-broadcast services,” said the American Television Alliance in a July filing. The possibility of broadcasters derogating their broadcast signal to maximize their datacasting capacity raises the question of “whether NAB proposes a reallocation of the broadcast bands by another name.”

Broadcast spectrum was given out to broadcasters in order to provide free, over-the-air television, said Public Knowledge Legal Director John Bergmayer in an interview. “The wireless industry typically had to pay for their spectrum.”