Can NextGen TV Be Saved?

Nov 08, 2023

By Ted Hearn

A generation ago, when TV stations needed to go digital, they did whatever it took in Washington, D.C., to ensure that the public-private partnership formed to guide the mission was a success. It was a 20-year effort – which built slowly at first until the federal government finally applied the pressure needed to bring the analog TV era to a close in mid-2009 without any serious consumer dislocation.

Sure, there were plenty of legislative, regulatory and court battles along the way. But in the end, the digital television (DTV) transition and the launch of HDTV happened under the watchful eye of Congress and the Federal Communications Commission and in the process freed up large amounts of radio spectrum that became the foundation for today’s faster and more efficient wireless networks.

TV stations owners are in the midst of a second DTV transition dubbed NextGen TV, which is the marketing label for the replacement of the current standard called ATSC 1.0 with the new standard called ATSC 3.0. NextGen TV, a voluntary TV station industry initiative from the outset, promises eye-pleasing 4K images, immersive sound and interactivity for consumers while TV stations are hopeful of revenue growth from new targeted advertising formats and various datacasting possibilities.

In complete candor, the shift to NextGen TV, authorized by the FCC in 2017, has not been going well. The most recent setback came in September when TV set maker LG said it would stop including ATSC 3.0 tuners in new TV sets after losing a patent infringement lawsuit. Based in South Korea, LG sells more TV sets in the U.S. than anyone else except Samsung.

There are other problems that don’t seem close to resolution.

A big flaw in the transition to NextGen TV is that it lacks a true public-private partnership. The current FCC, even though it devotes considerable staff time to overseeing 1,750 full-power TV stations, has shown only lukewarm support. The agency earlier in the year created the “Future of Television Initiative,” after TV stations reached out to FCC Chair Jessica Rosenworcel for help. So far, Rosenworcel’s approach, which required the National Association of Broadcasters to take the lead, has been confined to private meetings that have not shown much in the way of results. And it appears Rosenworcel is focused more on broadband regulation than broadcasters’ future.

Congress – a central player in the DTV transition – has been unwilling to establish command over the NextGen TV issue.

Meanwhile, TV stations continue to beam simulcasts of ATSC 1.0 and ATSC 3.0 signals, an expensive redundancy that makes completing the transition all the more urgent. Now available in at least 65 markets, NextGen TV is expected to reach 75% of U.S. television households in 2023.

It’s worth asking this: Why is there a transition in the first place? The reason is that NextGen TV is not backward compatible with the current standard. Because flipping a switch is not a solution, consumers need to buy new NextGen TVs to view the latest advancement in broadcast TV with an antenna or on a participating pay-TV platform. But this is not an unfamiliar situation: Just as ATSC 1.0 is incompatible with ATSC 3.0, so were analog TV signals incompatible with digital TV signals, giving some the incentive to be the first in the neighborhood with an HDTV set.

A shift in technology on this scale that involves just about every U.S. household can’t be accomplished without close government involvement. Washington, D.C., policymakers today can likely rely on some but not all of the regulatory mechanics of the DTV transition to plan for a successful NextGen TV transition.

Here are a few of the regulations adopted for the DTV transition:

Tuner Mandate: In 2002, the FCC, relying on authority in the All-Channel Receiver Act of 1961, ordered TV set makers to include digital tuners in all new TV sets as of Jan. 1, 2007. The Consumer Electronics Association fought the FCC in court but lost in a decision drafted by then-U.S. Court of Appeals Judge John G. Roberts, who is now Chief Justice of the United States.

Converter Boxes: Congress created a $1.5 billion program that allowed all U.S. households starting on Jan. 1, 2008, to request up to two $40 coupons to be used toward the purchase of up to two, digital-to-analog converter boxes. This program, run by the National Telecommunications and Information Administration (NTIA), allowed consumers to downgrade over-the-air digital signals to analog for viewing on their analog TVs. That gave consumers extra time to decide when to purchase a digital TV set.

Carriage Mandate: In 2007, the FCC adopted rules requiring cable operators to carry digital TV signals of stations that chose mandatory cable carriage in lieu of seeking payment under retransmission consent laws. The cable operators were also required to transmit the digital signals in analog for a three-year period following the transition. Cable programmers took the FCC to court over the “dual carriage” requirement but lost.

Statutory Deadline: Congress passed a law that ordered the end of the transmission of analog signals on Feb. 17, 2009. Because of funding problems with NTIA’s converter box program, Congress passed as second law sought by the new Obama administration to move the deadline back to June 12, 2009, and provide more money for converter box coupons. "This additional funding will help keep more Americans connected to free, over-the-air television broadcasts," said then-Acting NTIA Administrator Anna Gomez, who was sworn in as an FCC Commissioner on Sept. 25. Thus, the DTV transition ended without fanfare.

While helpful, the DTV transition-era regulations would likely need to be adjusted for the shift to NextGen TV.

For example, the LG patent litigation could foreclose the FCC from reviving the tuner mandate. And with Rosenworcel insisting the FCC lacks regulatory authority over streaming services that distribute local TV stations, FCC reliance on the DTV carriage mandate would leave out 13.4 million subscribers who receive local TV signals via services like YouTube TV and Hulu + Live TV, whose compliance with the carriage mandate would be purely voluntary.

Adoption of a statutory deadline and creation of a new converter box program seem to be available options to consider.

The stalled status quo of NextGen TV seems to be the default position at the FCC and can't continue. Congress likely needs to take control of the issue soon to ensure the survival of free TV in America.