Why Cable TV Companies Don’t Want To Pay For ATSC 3.0


If you thought the war of words between multichannel video programming distributors (MVPDS) and TV broadcasters over retransmission fee agreements gone bad was fierce, wait until you see what the cable companies and their chief lobbying groups have cooked up now, says Radio + Television Business Report Editor-in-Chief Adam R Jacobson, who pens this Media Information Bureau column dedicated to the next-generation TV standard.

While it’s being heralded as a huge technological advancement and money maker for broadcast TV companies, it’s becoming clear to Jacobson that cable TV’s vast empire of providers simply don’t want to pay for progress and would rather stick with the status quo … as OTT options continue to gnaw away at the reasons anyone would spend way too much for the few channels they actually consume.

By Adam R Jacobson

It’s always nice, when scanning the dozens of emails we receive each hour of the business day here at the RBR+TVBR Editorial Tiki Hut, to see a headline that sticks out with a VERY IMPORTANT MESSAGE!

Today’s RBR.com PR Medal of Honour goes to the American Television Alliance (ATVA), which joyfully brings together “an unprecedented coalition of consumer groups, cable, satellite, telephone companies, and independent programmers to raise awareness about the risk TV viewers face as broadcasters increasingly threaten service disruptions that would deny viewers access to the programs they and their families enjoy.”

Well, now that this statement is out of the way, we can begin to objectively present to our readers in full just what the ATVA is up to with respect to ATSC 3.0 and the next-generation TV standard that could bring broadcast TV new riches and — gulp — higher-quality video via a $25 digital “rabbit ears” antenna than through a $88 Craptastic monthly bill.

The subject line and bold headline of the ATVA communiqué we received is the following:

Why Broadcasters Want You to Buy a New TV, Again!

The ATVA then dutifully warns that “a new government regulation could impact every American household with a television.”

This regulation could positively impact U.S. TV consumers. But, leave that for the TVB and broadcast TV industry leaders such as Perry Sook, or the NAB and former Sen. Gordon Smith.

The ATVA makes it very clear that any “impact” to American households will be a negative one. And, it is holding a teleconference for media members tomorrow (10/26) at 10am along with representatives from the New America Foundation and the Taxpayers Protection Alliance to further disseminate its forecast of panic and horror.

The ATVA has laser-focused on remarks made recently by FCC Chairman Ajit Pai regarding the next-gen TV standard. Those words are: … In the near term, with the standard voluntary, the cost of implementing it will be added to consumer cable and satellite bills. In the longer term, it means everyone will need to buy a new television set.

Bingo! Cable companies, who charge consumers a ridiculous amount of money for tiered packages full of useless TV channels, don’t want to invest in the future. So, the only option is to stick it to their customers, right? And, whose fault is that? Yeah … it is Pearl TV, and Perry Sook, and Ray LaPlatney.

I think I still have a barf bag from the preview screening of the Scarlett Johansson film Ghost In the Shell. 

Oh, but wait … the ATVA goes full throttle in its scare tactics, noting that the 2009 shift from analog to digital (our current ATSC 1.0) standard “wound up costing the federal government $1.3 billion in vouchers for low-income families.”

The Taxpayer Protection Alliance recently pointed out that the new transmitting standard will force consumers to “fork over the cash for a new television set.”

The ATVA then pointed fingers at NAB EVP/Communications and expert golfer Dennis Wharton, who the ATVA quotes as saying, “Next-gen TV will indeed require those consumers who are pure over-the-air TV reliant (and not hooked up to a pay TV service like cable satellite or Verizon FIOS) to buy a new TV set.”

Those customers who are pure over-the-air TV reliant …

You mean the 15% of Americans that refuse to pay exorbitant monthly cable bills so they can receive their free-to-air local channels and a bunch of retread rubbish on dozens upon dozens of cable channels that have a short shelf life in the OTT world of today?

“The FCC’s action this week could mean the new television standard could be finalized in as little as three to four weeks,” the ATVA warns before sharing some background — through its lens — on next-gen TV.

As reported in RBR+TVBR, it correctly notes that ATSC 3.0 is not “backward compatible.” To continue to get over-the-air broadcast signals in this new standard, consumers will need to purchase new equipment or subscribe to a pay-TV provider that has switched out its equipment … unless there are rules that require a broadcaster to continue to simulcast the same programming to the same area and in the same format (HD).

Such simulcast rules are likely, and could continue indefinitely — much like analog signals that air alongside HD Radio signals.

But, the ATVA warns, what if a station decides not to choose to simulcast? “Consumers will lose service from that station unless they purchase new equipment,” it says.

Is this really an issue? What TV station would refuse to simulcast? It seems possible, but foolish for a broadcast TV station not to. Again, we see the onus on the major provider of TV signals to step it up — and that would be the MVPDs of the world.

This is the point in the column where one would hear the groans of Ted Hearn, of the American Cable Association (ACA). He’d eagerly point to the smallest of MVPDs and the incredible capital cost associated with upgrades of their largely rural or boutique systems, compared to such Goliath-sized operations as Optimum, Spectrum, Xfinity, COX, RCN and Suddenlink.

Hey, there’s a cost for progress, right? What about all of the costs associated with the spectrum repack that aren’t reimbursable? I’m sure several radio industry leaders would love to chat about this.

The ATVA further asserts that “weaker signals for over-the-air customers” will be seen until they purchase new equipment because of the nature of how ATSC 1.0 simulcasts will be carried out. Rural Americans that rely on over-the-air signals are most at risk.

The lobbying group then claims that broadcasters want to replace their HD signals with “standard definition” signals, should it not simulcast in HD.

Lastly, we conclude where we began this column — and the subject of retransmission fee agreements. Yes, the ATVA managed to merge that fight into this one by claiming that “broadcasters want the ability to force pay-TV providers to carry ATSC 3.0 signals by threatening to black out existing service. (Broadcasters have a long history of weaponizing blackouts to drive up retrans fees). If a pay-TV provider capitulates to these demands, consumers’ bills will go up (because it costs money to carry ATSC 3.0 signals). If a provider doesn’t, broadcasters will pull the plug and black out consumers.”

Why is the ATVA adamant in its belief that ATSC 3.0 will harm consumers? It seems preposterous and a bit absurd. Are they advocating that we stay in the past, continuing with the status quo? No. Are they against the technological advancements that ATSC 3.0 bring? No.

This is about taxes, and the prevention of government subsidies to help consumers keep up with the times. Instead of providing solutions to the issue of how we can develop and innovate, we are having conversations about who is going to pay for it.

The television industry should pay for it. Broadcast TV station owners should pay for it. MVPDs that largely profit from the carriage of free-to-air TV stations should pay for it. While there is some appeal in watching three back-to-back episodes of 7th Heaven before four back-to-back episodes of Gilmore Girls on the expanded basic tier channel Up, that’s not why people pay for cable TV services.

Comcast President/CEO Brian L. Roberts in fiscal 2016 saw total compensation of $28,641,518. Neil Smit, who oversees Comcast’s MVPD operations, earned a total of $19,165,687 in 2016.

Stephen Burke, President/CEO of NBCUniversal, saw total compensation in 2016 of $37,510,388

This says everything we need to know about the state of the MVPDs: They’re running scared.

But look at the cost of a new TV! 

Who needs a TV, when we can just watch our favorite channels and shows on our laptop, tablet or smartphone? As BIA/Kelsey CEO Tom Buono noted in a webinar conducted today by MFM-BCCA, ATSC 3.0 can possibly bring digital TV signals to smartphones much in the way Android-powered smartphones get FM stations through the NextRadio app?

The ATVA is fueling fears of the inevitable — cable TV as we know it is in big trouble. It’s unique calling card, premium subscription-based channels, are dying by the vine because there are simply too many channels with not enough avails to fill and not enough programming to make enticing for that $111 a month.

Meanwhile, broadcast TV is about to bring something truly amazing to viewers. Yeah, they’ll need to invest in a new TV set. But, that will render MVPDs less important in the New Digital Order. Why? Look at what over-the-air ATSC 3.0 can bring advertisers … and only cable TV companies that invest in the technology that will enable consumers and advertisers alike to benefit from it:

Instead of facing the future, the ATVA is fear-mongering.

We see the future bright and crystal clear, and it is delivered via ATSC 3.0.

It’s unfortunate that this organization is playing the role of obstructionist.

Adam R Jacobson is the editor-in-chief of the Radio + Television Business Report. He presently enjoys a handful of TV channels via an expanded basic standard-definition TV package through Comcast’s Xfinity service, and has subscriptions to Netflix and Amazon Prime. Live sports are often consumed via mobile devices; local TV news is largely consumed via the NewsOn and specific TV station apps on a Roku device.