Reply Comments of Jeffrey Westling[1]

Introduction and Summary

In its petition, the National Association of Broadcasters (NAB) asks the Commission to mandate the transition of broadcast signals to the ATSC 3.0, a departure from the voluntary transition agreed to in 2017.[2] NAB argues that a mandatory transition is necessary, in part due to restrictive ownership rules that make it difficult for individual broadcasters to make the transition while other stations in the same market do not.[3] Further, rules that require broadcasters to maintain an ATSC 1.0 add costs, making it a risky proposition to add ATSC 3.0 functionality while still maintaining the ATSC 1.0 signals.[4]

Undoubtedly, ATSC 3.0 has new functionalities that benefit consumers, and the Commission should encourage the continued deployment of next-generation technology to allow competition on the merits, but mandating the transition has significant costs that can distort the market for video services. If consumers demand ATSC 3.0 functionality, broadcasters would make the transition with little hesitation. But while some consumers will choose this service, the market is flooded with video options including internet-based streaming services, cable television, and satellite. By mandating a transition, the Commission would essentially require equipment manufacturers and alternative video distribution providers such as cable and satellite television to add additional costs to new devices and services, regardless of whether consumers actually want them.

Instead of mandating the transition to ATSC 3.0, the Commission should continue with the voluntary transition but also remove restrictions on broadcasters that make it more difficult for the industry to compete with alternative video options. Most important, the Commission should continue its work easing the ownership restrictions, allowing firms with multiple stations in a market to make the transition all at once. Also, the Commission should eliminate the mandatory simulcasting requirement that forces broadcasters to maintain an ATSC 1.0 signal. Finally, the Commission should ease content-based restrictions such as the news distortion rule and children’s programming requirements, allowing broadcasters to deliver the content that best suits their viewers’ needs. If done right, the Commission can allow ATSC 3.0 to compete with alternative video options without forcing consumers to pay the price for products and services they do not want.

The Commission Should Maintain the Voluntary Transition to ATSC 3.0 To Allow the Market To Decide Its Value

In its petition, NAB argues that an industry-wide mandate is necessary to fully transition to ATSC 3.0, but instead many broadcasters are choosing not to transition because the small consumer demand does not justify the cost of transition.[5] That isn’t a market failure; that is the market working. If consumers value the enhanced capabilities of ATSC 3.0, they will purchase the necessary equipment to receive those signals and tune into the stations that deliver the services they desire. If consumers do not value those services over existing quality, they will not. Broadcast television has many unique benefits, but the Commission should not artificially prop up the industry, especially when so many rival video services exist.

For example, many consumers now watch video content through internet-based streaming services, cable television, and satellite video services. As the Consumer Technology Association highlighted, 44 percent of homes subscribe to MVPD service, 81 percent subscribe to streaming services such as Netflix and Hulu, 23 percent subscribe to virtual MVPD services such as Sling TV and YouTube TV, and only 19 percent of homes have an antenna to receive broadcast signals.[6] With so many options, video services need to deliver the best service to consumers at the lowest cost. If some rival broadcasters do not, the stations that do make the transition would attract more viewers who wish to tune into the higher quality signal rather than lower quality ATSC 1.0 stations.

Further, even if a mandatory transition to ATSC 3.0 had procompetitive effects on broadcasting, it could have anticompetitive effects that harm consumers in other markets. For example, NCTA argues that none of their MVPD members will be able to carry 3.0 signals without making costly changes to their network.[7] As explained above, however, consumers are increasingly turning to internet-based alternatives, driving cable operators to continue to innovate and compete for video distribution. Forcing MVPDs to absorb these costs would harm existing MVPDs consumers who do not care about the distinction between ATSC 1.0 and ATSC 3.0 but who may have to pay more for their cable video package. What’s more, a mandatory transition would harm consumers who do not want to purchase new equipment to watch broadcast content. Equipment manufacturers, likewise, would be required to include additional functionality into devices they otherwise would not, further increasing costs for those consumers that do not care about broadcasting television.

While transitioning to ATSC 3.0 could present significant benefits for consumers, the Commission should not put its thumb on the scale unnecessarily, distorting the market and adding costs for consumers who do not have a preference in broadcast television standards.

The Commission Should Remove Regulatory Barriers To Ease the Transition and Allow Broadcasters To Compete With Rival Technologies

While the Commission shouldn’t mandate a transition to ATSC 3.0, there are still many reforms the agency can implement that will ease the transition process and drive ATSC 3.0 adoption. Most of these reforms, however, relate to the outdated regulation of broadcasters.

As NAB explained in the petition, “due to the Commission’s ownership restrictions which have fragmented the industry by design, no broadcaster is in a position to shut down ATSC 1.0 by themselves while other stations in the same market remain on the older standard.”[8] The FCC can address this issue with two key reforms. First, the Commission should remove or relax local television and radio ownership restrictions.[9] This would allow a single entity to own more stations in a given market and therefore coordinate the transition among the stations. In effect, this will allow these broadcasters to work more closely with the community to prepare for the transition so that the impact to consumers is minimal. Second, the FCC should eliminate the national ownership cap, which prevents entities from owning stations that reach more than 39 percent of households across the country. With more stations across the country, broadcasters can limit redundant implementation costs and ease the transition nationally.

In addition to the broadcast ownership rules, the Commission should also ease rules that make the transition to ATSC 3.0 more costly. Most important, the Commission should end the mandatory simulcasting requirements.[10] These requirements add significant costs to broadcasters and can make the transition to ATSC 3.0 more difficult. And if a large enough portion of consumers do not transition to ATSC 3.0-compatible equipment, the market may not justify eliminating the simulcast or transition to ATSC 3.0 at all. Further, those consumers who do not upgrade their equipment could be sizeable enough for some broadcasters to continue with their existing coverage, meaning they will still have broadcast options, in addition to the wide variety of other services, for obtaining video content.

Finally, the FCC should also ease the existing content restrictions on broadcasters and not on other forms of media.[11] Currently, the FCC imposes a variety of restrictions and requirements on broadcasters regarding the content they deliver such as rules against news distortion and children’s programming requirements. These rules, however, do not apply to alternative video distribution sources, and therefore, make it more difficult for broadcasters to compete. By removing these rules, broadcasters can better deliver the content consumers want, which in turn could lead to additional incentives to improve the quality of the broadcast by transitioning to ATSC 3.0. Regardless, if the Commission wants the market to dictate the transition to ATSC 3.0, it should ensure that its own rules don’t distort the market.

Conclusion

The FCC has rightly chosen to take a market-based approach to communications markets, and broadcasting should be no different. The FCC shouldn’t impose mandatory transition requirements and instead continue with the voluntary transition previously agreed to. At the same time, the FCC should eliminate rules and regulations that make the transition more difficult and put broadcasters at a competitive disadvantage. Taken together, the FCC could help spur the transition to ATSC 3.0 without harming consumers and competition more broadly.

***

 

Respectfully submitted,

Jeffrey Westling

Director, Technology & Innovation Policy

The American Action Forum

1747 Pennsylvania Avenue, N.W.

Washington, D.C. 20006

JWestling@americanactionforum.org

 

June 6, 2025

[1] Jeffrey Westling is the Director for Technology & Innovation Policy at the American Action Forum. These comments represent the views of Jeffrey Westling and not the views of the American Action Forum, which takes no formal positions as an organization.

[2] Petition for Rulemaking of the National Association of Broadcasters, GN Docket No. 16-142, at 1 (Feb. 26, 2025) (NAB Petition), https://www.fcc.gov/ecfs/document/10226086607681/1.

[3] Id. at 3.

[4] Id. at 12.

[5] Id. at 12.

[6] Comments of CTA, GN Docket No. 16-142 at p. 8 (May 7, 2025), https://www.fcc.gov/ecfs/document/10507299146733/1.

[7] Comments of NCTA, GN Docket No. 16-142 at p. 3 (May 7, 2025), https://www.fcc.gov/ecfs/document/10508334120287/1.

[8] NAB Petition at 3.

[9] Comments of Jeffrey Westling, MR Docket No. 25-133 at 5-6 (Apr. 11, 2025), https://www.fcc.gov/ecfs/document/10411533217506/ (Westling Delete Comments).

[10] 47 CFR § 73.6029.

[11] Westling Delete Comments at 6-7.