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August 23rd, 2017 10:20 am
Broadcasters’ “Next Gen” Proposal to FCC Would Cost Consumers
Posted by Timothy Lee Print

The new Federal Communications Commission (FCC) has been one of the most consistently outstanding agencies of the Trump Administration in terms of restoring regulatory sanity after eight years of politicized abuse throughout the Obama Administration.

Unfortunately, the FCC remains under assault from groups seeking to leverage federal policy toward its own advantage, and continued vigilance is critical.

In just the latest illustration, broadcasters have begun pressuring the FCC to allow television stations to begin transmitting signals in a new “ATSC 3.0″ format.  Also referred to as “Next Gen,” such a transition would impact every American consumer who watches television, and not necessarily for the better.  In addition to costing taxpayers, it could create a de facto federal mandate on television service providers.

First, the ATSC 3.0 format is incompatible with existing televisions and set-top boxes, meaning that Americans who wanted to simply continue watching television would have to purchase new equipment or join a pay-TV provider that had spent the time and money transitioning its equipment.  That, of course, would be a cost transferred to customers.

Second, the proposed transition could also mean weaker signals for consumers who choose over-the-air broadcast.  That’s because it would involve simulcasting from facilities with smaller or new coverage areas, placing rural voters in particular jeopardy.

Additionally, ATSC 3.0 could bring more dreaded blackouts, since broadcasters could seek to force pay-TV providers to carry ATSC 3.0 signals under threat of blackout (a tactic broadcasters have exploited in the past on behalf of such efforts as ratcheting up retransmission fees).  Accordingly, broadcasters can leverage their government-provided bargaining position to obtain higher fees for themselves via threat of consumer blackouts, which they’ll surely employ in their effort to force consumers and providers to purchase the new equipment necessary for reception.

That, of course, translates to higher costs for consumers, or giving up their favored programming altogether.

The better alternative is to let market forces work, by making the Next Gen transition wholly voluntary.  Broadcasters operate under an umbrella of government license, which allows them to hold consumers hostage in order to increase revenues.  Accordingly, the FCC should continue its good works by rejecting broadcasters’ attempt to leverage federal bureaucracy to achieve a new government handout to be subsidized by consumers.  Next Gen should be a truly voluntary standard that doesn’t leave consumers holding the bill for the broadcasters’ innovation.

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