Next Gen

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“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.

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