Broadcasters are arriving in Las Vegas this week on a deregulatory roll, and the dice keep coming up sevens.
After decades of pushing back on local ownership rules that limited TV and radio station growth compared to competitors with growing national footprints, push finally came to shove under FCC Chairman Ajit Pai.
Gone is the newspaper-broadcast cross-ownership prohibition. Gone is the absolute prohibition on owning a couple of top-performing stations in a market. Gone is the FCC’s 2014 view of joint sales and services agreements as de facto end-arounds of those loosening local ownership rules.
Broadcasters wanted more, for example, lifting the prohibition on owning two of the four top stations rather than simply a case-by-case review, with the presumption still against such ownership.
Some broadcasters still wanted more. The Independent Television Group, for example, is suing the FCC over not eliminating the prohibition altogether. But after no action on that front for several chairmanships, Democratic and Republican, the dereg was more than half a loaf for broadcasters, like Sinclair, hungry for buying opportunities to heavy-up their portfolios.
Pai also opened an inquiry into increasing the 39 percent cap on national audience reach, another governor on broadcasters’ ability to expand even as over-the-top players proliferate and MVPDS heavy up without similar restrictions.
The Pai FCC also dropped the green flag on ATSC 3.0 advanced transmission standard, which can start rolling out anytime on a voluntary, market-by-market basis.
That was a big win for broadcasters because it will allow them to provide targeted ads, interactive programming and VOD, enhanced emergency alerts and even lease spectrum capacity to wireless operators to offload traffic when their networks are congested.
The National Association of Broadcasters teamed up with noncommercial stations, emergency alert advocates and the Consumer Electronics Association to call on the FCC to launch the potential transition, and the chairman answered that call, pretty much giving them what they asked for, i.e. a voluntary transition, the ability to make a case for flash-cutting to the new standard — though the presumption is they will continue to simulcast ATSC 1.0 and 3.0 for five years — and the ability to combine retrans negotiations for both 1.0 and 3.0 signals, which MPVDs had opposed.
Thanks to the current FCC, with a lobbying assist from NAB, the new standard is expected to drive sales of 4K TVs whose higher-resolution pictures can be delivered by the new standard, and give broadcasters a competitive foothold in over-the-top digital space. Broadcasters also scored a big win in Congress, with a bipartisan contingent supporting legislation that gave TV stations an extra billion dollars for the post-incentive auction repack. That includes low-power TVs and translators, as well as co-located FM stations, who will get funds to make their respective moves, money that had not been in the original $1.75 billion repack fund.
Pai, who pledged to glean some low-hanging over-regulatory fruit, has been doing so on a regular basis, much to the delight of broadcasters.That includes eliminating the requirement that a paper copy of FCC rules be kept at stations, and proposing to eliminate mid-term EEO reporting requirements. He has also dispatched FCC Commissioner Michael O’Rielly to put fresh eyes on the FCC’s three-hour per week, in at least half-hour increments, of mandated educational and informational programming.
“It’s refreshing to have an FCC chair who is openly positive about the role broadcasters play in local communities,” said NAB Executive Vice President Dennis Wharton. “Chairman Pai has embraced AM radio revitalization. He has lived up to his pledge to cut red tape and modernize rules that allow local radio and TV to compete against massively consolidated national pay TV and internet providers. He has freed up broadcasters to innovate with Next Generation TV. Chairman Pai is to be commended for reforming outdated rules and for actively supporting the one technology that is free to every American home: local broadcasting.” Pai will participate in the “We Are Broadcasters Celebration” on Tuesday.
But broadcasters can’t stand pat. Challenges remain, particularly around the so-called white spaces between TV channels. Microsoft has been pushing the FCC to reserve a channel in the broadcast band in each market for unlicensed wireless, something broadcasters say could supplant licensed users just as they could use the extra spectrum for ATSC 3.0 and LPTVs and translators could use it for new primary channels.