“They want to impose extensive government regulation that could strangle Next Gen TV in its infancy,” Pai said, adding that critics are rooted in “fear and opportunism, not freedom and opportunity.”
Sinclair will have 233 stations if its merger with Tribune Media Co. is approved by antitrust regulators. It also has formed a partnership to share airwaves with Nexstar Media Group Inc.’s 170 stations. Private-equity owned Spanish-language broadcaster Univision Holdings Inc. also has joined the alliance, which Sinclair says covers 92 percent of the country.
The Maryland-based broadcaster also holds potentially lucrative patents on the technology and is still assessing the revenue. Cable providers, TV manufacturers and broadcasters using the system may have to pay Sinclair royalties.
Pai’s proposed rules for the service are likely to be approved because he leads the FCC’s Republican majority, and controls the agency’s agenda. The rules would allow — and not require — stations to use the new standard.
Approval by the FCC would come as the agency also decides whether to loosen restrictions on owning multiple TV stations in a local market — a long-sought goal of broadcasters.
“This is a landmark development for our industry,” Sinclair Chief Executive Officer Chris Ripley told investors in a Nov. 1 earnings call. “Reforming the ownership rules and allowing for technological innovation are both necessary for the future of over-the-air broadcasting.”
The privacy implications need more study, U.S. Rep. Debbie Dingell, D-Dearborn, said in a Nov. 8 letter to the FCC’s Pai.
Dingell acknowledged “significant benefits” of the new technology. But, she added, the prospect of targeted advertisements “raises questions about how advertisers and broadcasters will gather the demographic information from consumers” and “what privacy protections will be in place.”
“It’s a matter of giving broadcasters capabilities others already have,” said Dave Arland, a spokesman for the Advanced Television Systems Committee that’s developing the new standard. “Broadcasters see the opportunity to have new ways of measuring who’s watching what.”
Under the new standard, TV stations will be transmitting in a different format than they do now. Those who rely on antennas for over-the-air reception will need to buy a new set or a gadget to convert the Next Gen signals. About 12 million TV households relied exclusively on over-the-air reception in 2015, according to the most recent statistics from the FCC.
Cable providers would need new equipment, from the headends where they receive broadcast signals through to consum- ers’ set top boxes in order to pass NextGen TV signals through to viewers, the NCTA-the Internet and Television Association, representing the biggest operators, said in a May 9 filing.
It will be a “massive and very expensive” prospect that could bring higher rates for consumers, according to the filing. The trade group’s members include top cable provider Comcast Corp. and No. 2 Charter Communications Inc.
The association said engineers are still working out how to convert the new standard for current TVs and didn’t say if customers will be charged for new set-top boxes.
Under the FCC’s proposed rules broadcasters using Next Gen TV also need to keep sending today’s signals, and to offer the same programming on both streams for five years. After that, TV stations would be free to shift popular shows to the Next Gen stream only — essentially stranding older TV sets with lesser programming.
“It’s a tax on every household with a television,” said Jessica Rosenworcel, a Democratic member of the FCC, said in a speech at the New America policy group in Washington. “Every one of us will need to replace existing television sets or buy new equipment.”
Sinclair holds “essential patents” for the new system, and “we better understand how these rights holders will not take advantage of the special status conferred upon them by the FCC,” she said.
The cable group has asked the FCC to ensure that patent holders charge only reasonable fees for use of their Next Gen TV technology, and in a Nov. 6 filing expressed apprehension that Sinclair may charge high fees.