ICLE Comments to FCC on Permissive Use of the ‘Next Generation’ Broadcast Television Standard
I. Introduction and Overview
The International Center for Law & Economics (ICLE) submits these comments in response to the Federal Communications Commission’s (FCC) notice of proposed rulemaking (NPRM) on the permissive use of the ATSC 3.0 “Next Generation Television” standard.[1] ICLE is a nonprofit, nonpartisan research organization that promotes the use of law & economics methodologies to inform public policy. ICLE’s work is intended to ensure that competition policy and regulation are grounded in sound economic analysis and that they promote consumer welfare, particularly in dynamic, technology-driven markets such as media and telecommunications.
Broadcast television has long played a vital role in American households and communities. As technology evolves, the FCC must ensure that its rules allow broadcasters to improve service quality and respond to changing consumer and community expectations.[2] The commission’s decision to permit a voluntary transition from ATSC 1.0 to ATSC 3.0 reflects this goal and has already enabled broadcasters to begin offering new capabilities and higher-quality service.[3]
ATSC 3.0 offers clear potential benefits. Unlike prior broadcast standards, it combines an internet protocol (IP) based broadcast signal with broadband connectivity. This architecture enables significantly improved audio and video quality, more efficient spectrum use, and more reliable coverage. It also supports interactivity, personalization, targeted advertising, and enhanced emergency alerts through consumers’ broadband connections. At a time when broadcast television faces intense competition from digital alternatives, these features could help broadcasters meet modern consumer expectations and increase the value of advertising-supported services.
Despite these benefits, the voluntary transition to ATSC 3.0 has proceeded slowly. In its recent petition, the National Association of Broadcasters asked the FCC to adopt regulatory changes intended to accelerate adoption, including allowing broadcasters to shut off legacy ATSC 1.0 service. The petition frames this as a “chicken-and-egg” problem: broadcasters hesitate to invest without widespread consumer adoption, while consumers delay purchasing new equipment until broadcasters fully deploy ATSC 3.0.[4]
While these concerns are understandable, the FCC should avoid distorting the market to favor a single set of stakeholders. One straightforward explanation for limited consumer adoption is that, for many households, ATSC 3.0 does not yet deliver enough incremental value to justify the added cost of new equipment. If consumers remain satisfied with ATSC 1.0 service, the case for rapid transition weakens.
The FCC therefore should not mandate adoption. Instead, it should preserve regulatory flexibility that allows broadcasters to manage their services in ways that align with their business models and audience demand. The NPRM’s tentative conclusion to continue a voluntary transition appropriately relies on market signals to determine when and where ATSC 3.0 deployment makes sense.[5]
Where ATSC 3.0 creates sufficient value—whether through improved viewer experiences or more effective advertising—broadcasters will adopt it. Many stations already have done so, either through direct deployment or through shared “lighthouse” arrangements in local markets.[6] Even so, consumer adoption of ATSC 3.0 equipment remains limited, and viewing habits have not shifted in meaningful ways.[7] Broadcasters, not regulators, should bear the responsibility of persuading consumers that the new standard merits investment.
The burden also should not shift to equipment manufacturers. Consumer demand for ATSC 3.0 functionality remains modest, and many television manufacturers therefore continue to exclude ATSC 3.0 receivers from their products.[8] Uncertainty surrounding encryption and the costs associated with compliance further raise barriers to inclusion.[9] Some consumers may rationally prefer lower-cost displays without broadcast tuners at all, relying instead on streaming services or multichannel video providers.
In short, the FCC’s continued commitment to a voluntary, market-driven transition best protects consumer choice and avoids imposing costs that the market has not yet shown a willingness to bear.
A. Preserve a Voluntary Transition by Expanding Regulatory Flexibility
While the FCC should not mandate a transition to ATSC 3.0, it should give broadcasters greater flexibility to manage that transition. The commission can do so through several targeted reforms.
First, the FCC should eliminate the simulcasting requirement. When the commission authorized the voluntary transition to ATSC 3.0, it required broadcasters to continue simulcasting their programming in ATSC 1.0.[10] Because ATSC 3.0 transmission equipment cannot broadcast ATSC 1.0 simultaneously, broadcasters must rely on simulcast arrangements with other stations. These arrangements raise costs and can degrade signal quality, particularly for ATSC 3.0 services.[11] Removing the simulcast requirement would reduce these costs and allow broadcasters to deploy ATSC 3.0 more efficiently. If consumers continue to prefer ATSC 1.0, broadcasters will have strong incentives to maintain simulcasts voluntarily to avoid losing audience share and advertising revenue.
Second, the FCC should eliminate the “substantially similar” programming rule. That rule effectively requires broadcasters to air the same content on both ATSC 1.0 and ATSC 3.0, limiting their ability to experiment with interactive features or application-specific programming that the new standard enables.[12] Greater flexibility would allow broadcasters to differentiate ATSC 3.0 offerings and better demonstrate their value to consumers. Even if ATSC 1.0 service quality declines modestly, consumers could choose whether to upgrade, while those who rely on ATSC 1.0 would continue to receive service.
Finally, the FCC should permit MPEG-4 compression for ATSC 1.0 signals. More efficient compression would mitigate the quality loss associated with “lighthousing” ATSC 1.0 signals and improve overall spectral efficiency. This change would reduce transition costs without forcing consumers or broadcasters into premature adoption of ATSC 3.0.
B. Encryption and Copyright Issues in the ATSC 3.0 Transition
As the industry transitions to ATSC 3.0, copyright protection becomes increasingly important. Content piracy has long challenged broadcasters, and the IP-based architecture of ATSC 3.0 makes unauthorized copying and retransmission easier for bad actors. Congress has already considered proposals that would expand broadband providers’ obligations to identify and remove pirated content, underscoring the salience of these risks.[13]
ATSC 3.0 allows broadcasters to encrypt signals and manage access in ways that can help deter piracy.[14] The FCC should allow the industry to determine how best to deploy these tools. Market incentives already discipline overuse of encryption. If consumer equipment cannot decrypt signals, broadcasters will lose viewers. If certification or licensing requirements raise costs for manufacturers, fewer devices will reach consumers, slowing adoption. A continued voluntary transition works best if FCC rules allow these market forces to balance access, security, and adoption.
If competitive concerns arise from the standards-setting or implementation process, existing antitrust law provides an adequate backstop. The U.S. Justice Department (DOJ) can investigate and, where appropriate, bring enforcement actions. Courts can then assess alleged anticompetitive conduct, alongside any procompetitive justifications, to determine whether the net effect harms competition.
Finally, the use of encryption does not transform ATSC 3.0 into a different category of media for legal or regulatory purposes. Even as distinctions between broadcast and other media platforms continue to blur, broadcasters still transmit signals directly to the public free of charge, and consumers with approved equipment can receive any available signal.[15]
C. Application of Retransmission-Consent Rules to ATSC 3.0
The FCC asks whether retransmission-consent and must-carry obligations should extend to ATSC 3.0 signals.[16] As the record reflects, requiring carriage of ATSC 3.0 would impose significant additional costs on cable operators, while consumer demand for the new standard remains limited.[17] Although uniform application of FCC rules can offer administrative simplicity, the commission should weigh these costs carefully against any potential benefits to consumers and to broadcasters’ transition efforts.
Rather than creating separate retransmission-consent regimes for different technologies, the FCC should consider modernizing its existing rules across platforms. Congress enacted the Cable Act at a time when cable operators were thought to exercise bottleneck control over video distribution.[18] Today, with the growth of internet-based and alternative distribution channels, cable systems no longer hold that position, if they ever did.[19]
While retransmission-consent and must-carry requirements remain statutory, Congress granted the FCC discretion to define and enforce “good faith” negotiation standards, establish collective bargaining mechanisms for smaller multichannel video programming distributors (MVPDs), and prevent coercive contract provisions.[20] The commission could use this authority to update its approach—for example, by strengthening good-faith negotiation requirements or adopting final-offer arbitration—so that broadcast stations negotiate retransmission consent on terms comparable to those faced by other content providers.[21]
D. Improving Spectrum Efficiency Through ATSC 3.0
ATSC 3.0 enables more efficient compression, allowing broadcasters to use spectrum more effectively. Because the primary broadcast stream requires less bandwidth than a station’s licensed allocation, broadcasters gain flexibility to offer additional subchannels, enhanced programming, or new services.[22] If broadcasters identify other innovative ways to use their licensed spectrum, the FCC should support those efforts by granting regulatory flexibility. Doing so will encourage continued gains in spectral efficiency and free additional capacity for expanded programming and other consumer-facing services.
II. Market Realities Support a Voluntary, Consumer-Driven ATSC 3.0 Transition
The FCC rightly proposes to continue a voluntary transition to ATSC 3.0. As a guiding principle, the commission should ensure that its rules allow market forces—not mandates—to drive technological change. Consumers who value ATSC 3.0 will choose to purchase compatible equipment. If they do not, the FCC should not compel them to upgrade.
A. The Modern Media Marketplace Has Changed
Many of the FCC’s broadcast and cable rules reflect market conditions that no longer exist. Broadcast-ownership limits, for example, arose from concerns that limited distribution options would allow a small number of stations to control public access to information.[23] Congress enacted the Cable Act in part because policymakers believed cable operators could act as bottlenecks for video distribution, leaving broadcasters with little leverage in retransmission negotiations.[24]
Today’s media marketplace looks very different. No single technology dominates video distribution, and the internet has sharply reduced barriers to entry for content creators.[25] Nielsen data show that broadcast and cable television together account for roughly 41.6% of viewing time, while streaming services account for about 46.4%. At the same time, no individual streaming service captures more than 13.1 of total viewing, underscoring the competitive and fragmented nature of the market.[26]
Content producers now reach consumers through multiple independent channels. Broadcast networks distribute programming directly through their own streaming platforms. Smaller creators can rely on open platforms such as YouTube or negotiate distribution through virtual MVPDs like Sling TV. These options give content providers far more flexibility and bargaining power than in prior decades.
Consumers likewise enjoy unprecedented choice. Where viewers once had to watch programs at scheduled broadcast times or subscribe to cable for broader access, they can now watch free content on social media and streaming platforms or subscribe to services offering premium television and film libraries. Consumers also increasingly substitute other forms of entertainment—such as video games, podcasts, and interactive media—for traditional broadcast programming.
B. The Role of Consumer Demand in the ATSC 3.0 Transition
Concerns about a “chicken-and-egg” problem in the transition to ATSC 3.0 have some merit.[27] Without access to robust ATSC 3.0 content, viewers have little reason to upgrade their equipment. At the same time, broadcasters hesitate to invest in ATSC 3.0 programming when they lack a sufficient audience, especially while they must continue to simulcast in ATSC 1.0.
That dynamic, however, represents only part of the challenge. Increased competition in the video marketplace further reduces consumers’ incentives to upgrade their broadcast-television equipment. Faced with the choice between upgrading to ATSC 3.0 or losing access to a broadcast channel, many viewers may instead turn to streaming services, online video platforms, or other forms of entertainment. As a result, broadcasters must ensure that ATSC 3.0 delivers enough incremental value to compete with these alternatives. This market discipline ensures that broadcasters adopt the new standard only when it provides consumer benefits sufficient to sustain viewership.
A mandated transition would bypass this market test. For some stations, continued operation under ATSC 1.0 may provide sufficient value to viewers, making an upgrade economically unjustified. If the FCC forces a transition before consumer demand develops, viewers may not follow, and some broadcasters could face significant financial harm. Even with a mandate, consumer adoption is not guaranteed, creating the risk of substantial deadweight loss.
A voluntary transition better aligns incentives. It encourages broadcasters to develop and deploy ATSC 3.0 services that reflect consumer preferences and to demonstrate the value of the new standard to both viewers and device manufacturers. Without a mandate, broadcasters must address concerns about encryption, digital rights management, and equipment certification by offering solutions that are affordable, efficient, and responsive to market demand.
A voluntary approach also encourages broadcasters to use ATSC 3.0 to its full potential. Broadcasters have noted that “lighthousing” often requires additional compression, which can limit ATSC 3.0 functionality and reduce consumer benefits.[28] Combined with reforms to simulcasting rules, a voluntary transition would give broadcasters stronger incentives to deploy ATSC 3.0 in ways that fully realize its technical capabilities—if, and only if, those capabilities deliver meaningful benefits to consumers.
While broadcasters face real challenges, the FCC should not shift the costs of transition onto consumers, particularly where they have not expressed a clear desire to upgrade.
C. Legacy Authority Does Not Justify an ATSC 3.0 Tuner Mandate
Congress granted the FCC authority to require that consumer television equipment include broadcast receivers.[29] The National Association of Broadcasters asks the commission to use that authority to require manufacturers to include ATSC 3.0 tuners in all new television sets.[30]
ATSC 3.0 tuners add meaningful cost to consumer devices, which helps explain why manufacturers continue to prioritize ATSC 1.0 receivers. External ATSC 3.0 tuners typically cost between $80 and $250, compared to roughly $30 to $70 for ATSC 1.0 tuners.[31] To keep prices low, many entry-level and midrange televisions therefore include only ATSC 1.0. The Consumer Technology Association has noted that most televisions on the market still lack ATSC 3.0 tuners and that models including them cost more than 23% more on average.[32] While these price differences may also reflect other premium features, the evidence suggests that consumers who want ATSC 3.0 capability must pay more for it.
Congress enacted the All-Channel Receiver Act in 1962 to address a facially similar concern.[33] At the time, the FCC allocated broadcast frequencies across Very High Frequency (VHF) and Ultra High Frequency (UHF) bands,[34] but consumers hesitated to buy UHF-capable equipment because little UHF programming existed.[35] The statute thus aimed to promote competition, localism, diversity, and consumer choice by ensuring that viewers could receive all broadcast signals.[36]
Those market conditions no longer exist. The logic underlying the FCC’s authority in 1962 does not translate well to today’s media environment.
First, the statute sought to promote competition by enabling smaller and independent stations to reach viewers and compete with the dominant broadcast networks—ABC, CBS, and NBC. Today, improved compression allows broadcasters to carry multiple subchannels, and content producers that wish to avoid large networks can distribute programming through cable channels, virtual MVPDs, or the internet.[37] A mandate requiring ATSC 3.0 tuners could actually serve to push price-sensitive consumers away from broadcast television altogether and toward alternative platforms, undermining competition rather than promoting it.
Second, mandating ATSC 3.0 tuners would do little to advance localism or diversity. Local broadcast stations already reach viewers through ATSC 1.0, and consumers can access that content today. Higher equipment costs could deter some consumers from purchasing televisions with broadcast capability at all, leading them to rely exclusively on streaming or other technologies. Moreover, local news and community content increasingly reach audiences through podcasts, local websites, and social media.[38] A tuner mandate would not meaningfully expand the range of content available to consumers.
A voluntary transition offers a better path to lower costs and broader adoption. One significant barrier to ATSC 3.0 equipment deployment is approval by A3SA, the private entity created by broadcasters and networks to manage the ATSC 3.0 security framework, including encryption and digital-rights-management standards.[39] Those standards have prevented some devices from decoding ATSC 3.0 signals, even when they otherwise functioned effectively.[40] For example, certain network tuners that allow consumers to access broadcast signals throughout the home previously supported ATSC 3.0 but lost that capability after failing to obtain A3SA approval.[41]
A voluntary transition also better aligns incentives for standards bodies to approve devices that pose no consumer harm while continuing to block genuinely problematic ones. Broader device availability would increase competition among manufacturers, lower prices, and expand consumer adoption—outcomes far more likely to advance the goals of the transition than a blanket equipment mandate.
III. Market-Driven Transition Requires Relief from Simulcasting Rules
The FCC correctly declines to mandate a transition to ATSC 3.0. Moreover, the NPRM’s proposals to grant broadcasters additional flexibility will allow market forces to determine the appropriate transition timeline.
Today’s broadcast market effectively requires stations that adopt ATSC 3.0 to continue simulcasting in ATSC 1.0. Advertising provides the primary source of broadcast revenue, and without a sufficient audience capable of receiving ATSC 3.0 signals, an ATSC 3.0–only approach would sharply reduce viewership and advertising value. Without that revenue, many broadcasters could not remain viable.
At the same time, simulcasting imposes significant costs. Because stations cannot transmit ATSC 3.0 and ATSC 1.0 signals from the same facilities, broadcasters must enter channel-sharing arrangements—commonly known as “lighthousing”—to maintain both signals.[42] These arrangements increase operational costs but, to date, have generated little additional revenue. In a highly competitive media marketplace, these added costs further disadvantage broadcasters relative to well-capitalized digital competitors.
More importantly, the FCC’s simulcasting rules actively impede the ATSC 3.0 transition. Lighthousing requires multiple broadcasters to share limited bandwidth, which forces additional compression and reduces signal quality and functionality.[43] In theory, a broadcaster could instead lighthouse its ATSC 1.0 signal. In practice, commission rules require the ATSC 1.0 simulcast to cover the station’s entire community of license and remain substantially similar to the ATSC 3.0 signal.[44] Meeting those requirements through a shared facility would often degrade service quality or reduce coverage, exposing stations to regulatory risk.
As a result, broadcasters have largely been forced to lighthouse their ATSC 3.0 signals. This choice shifts the technical constraints onto the very service meant to showcase the new standard. As the “Future of Television Initiative Report” explains, ATSC 3.0 lighthouses can offer only a limited subset of the standard’s full capabilities.[45] When stations attempt to deploy advanced ATSC 3.0 features, compliance with the “substantially similar” rule becomes even more difficult. Consumers who access ATSC 3.0 today therefore experience only a fraction of its potential benefits, weakening incentives for broader adoption.
The FCC should promote flexibility by eliminating mandatory simulcasting requirements. Paired with the substantial similarity rule, mandatory simulcasting distorts the broadcast market and offers little additional benefit to consumers. Broadcasters should instead retain discretion over whether and how long to simulcast ATSC 1.0.
First, broadcasters will not adopt changes that undermine their own viability. If viewers cannot receive a signal, broadcasters will not make the switch. Eliminating mandatory simulcasting would simply allow stations to retire ATSC 1.0 signals that no longer deliver meaningful value to consumers.
Second, voluntary simulcasting may increase overall consumer welfare even if a small number of viewers do not transition. If ATSC 3.0 meaningfully improves service quality and functionality, the benefits to the vast majority of viewers may outweigh the costs to a shrinking minority, who may turn to other local stations or digital alternatives. Broadcasters—rather than regulators—are best positioned to judge when their communities are ready for that shift.
Third, if the Commission retains any simulcasting requirement, it should ease compliance. Eliminating the substantial similarity rule and allowing more advanced compression for ATSC 1.0 signals would enable broadcasters to preserve legacy service while fully deploying ATSC 3.0. For example, a station that can reach most of its market through a lighthouse could dedicate its primary channel to ATSC 3.0 without having to meet rigid coverage or programming constraints, allowing it to deliver the quality and interactivity needed to drive consumer adoption.
By removing these regulatory barriers, the FCC can best facilitate a successful transition to ATSC 3.0—one guided by consumer demand and competitive conditions, rather than regulatory compulsion.
IV. Allow Market-Driven Use of Encryption and DRM
If the FCC adopts flexible simulcasting rules and maintains a voluntary transition to ATSC 3.0, it should not impose new rules governing encryption or digital rights management (DRM).
Broadcasters today compete directly with a wide range of internet-based services and face growing pressure from digital rivals. Encryption and DRM give broadcasters tools to protect their content and develop new revenue models that can sustain free, over-the-air service. The FCC should allow broadcasters to decide whether and how to deploy these tools.[46]
First, DRM helps prevent unauthorized redistribution of valuable content, including live sports and primetime programming. In 2024, episodic television piracy generated an estimated 96.8 billion visits worldwide, with global digital piracy imposing costs of roughly $75 billion.[47] Cable operators and streaming platforms already rely on DRM to protect their services, while broadcasters historically have lacked comparable tools. ATSC 3.0 closes that gap by limiting unauthorized copying and redistribution and by enabling compliance with licensing requirements imposed by studios and major sports leagues.[48] Without DRM, broadcasters risk losing access to premium content, pushing viewers further toward digital alternatives.
Second, DRM enables technical restrictions that were not possible under ATSC 1.0, such as limits on DVR functionality, commercial skipping, or content-retention periods. Some commenters argue that these capabilities could degrade the user experience or infringe fair use.[49] But broadcasters cannot adopt DRM practices that alienate viewers without harming their own business. If ATSC 3.0 reduces functionality that consumers value, audiences will migrate elsewhere. At the same time, certain restrictions may better support broadcast economics. For example, limiting ad skipping can increase the value of advertising, generating revenue that supports content investment and innovation. Broadcasters, not regulators, are best positioned to strike the appropriate balance between consumer access and economic sustainability.
Claims that DRM necessarily violates fair use also misread relevant precedent. Public Knowledge cites Sony Corp. of America v. Universal City Studios to argue that restricting recording features infringes consumer fair-use rights.[50] But Sony addressed whether a device manufacturer could be held liable for copyright infringement for enabling recording—not whether broadcasters must allow recording in the first place.[51] DRM does not impose liability on device manufacturers and does not require broadcasters to provide any particular functionality. Fair-use doctrine therefore does not compel FCC intervention here.
Third, DRM enables broadcasters to experiment with paywalled or subscription-based content. As consumers increasingly skip or avoid advertisements, ad-supported revenue becomes less reliable. Other media industries have responded by developing subscription models, and broadcasters may need similar flexibility. ATSC 3.0 could support premium or subscription content delivered over broadcast subchannels, or more targeted advertising enabled by secure, internet-connected devices.
Although broadcasting traditionally has been free to consumers, nothing in the public-interest standard requires that it remain so indefinitely. Congress charged the FCC with regulating spectrum in the public interest, not with mandating a particular pricing model. If broadcasters cannot sustain operations, communities lose access to local content altogether. Because ATSC 3.0 remains a broadcast service with limited geographic reach, stations will continue to tailor offerings to local audiences.
If the FCC remains concerned that subscription offerings could blur the distinction between broadcasting and other services, it could require licensees to maintain at least one free, over-the-air primary channel. That approach would preserve the core attributes of broadcast service while allowing broadcasters to use additional subchannel capacity—made possible by improved compression—for optional premium offerings.
Outdated assumptions about broadcast business models risk harming consumers by limiting broadcasters’ ability to compete. The FCC should therefore allow broadcasters the flexibility to deploy encryption, DRM, and new monetization strategies as part of a market-driven transition to ATSC 3.0.
V. Defining ‘Broadcasting’ in the Context of Encrypted ATSC 3.0 Services
The NPRM asks whether the current ATSC 3.0 encryption regime—administered by A3SA and implemented by broadcasters—qualifies as “broadcasting” under the Communications Act.[52] The statute defines broadcasting as the dissemination of radio communications intended for reception by the public. FCC rules further explain that this definition applies to services meant to be received indiscriminately by the public.[53]
The FCC has identified several indicia relevant to that determination. These include whether the service is receivable on a conventional television without requiring a programmer-provided special antenna or signal converter; whether encryption prevents viewers from enjoying the programming without proprietary decoding; and whether the service depends on a private contractual relationship between the provider and the viewer.[54]
A. Encrypted ATSC 3.0 Transmissions Remain ‘Broadcasting’
Some commenters argue that encryption and DRM, as implemented through A3SA, transform ATSC 3.0 into a functionally and legally distinct service from broadcasting. Public Knowledge, for example, contends that ATSC 3.0 requires viewers to use A3SA-certified devices and that this framework imposes technological and contractual barriers inconsistent with what has historically been a free and open medium.[55] On that basis, Public Knowledge claims that encryption and DRM are incompatible with the legal definition of broadcasting as a service to the general public.[56]
These arguments fail for two reasons.
First, encryption and DRM operate as part of the technical standards governing ATSC 3.0–capable equipment, not as station-specific access controls. This requirement is no different in principle from the need to own a television capable of receiving ATSC 1.0 signals. While not all manufacturers may choose to meet A3SA specifications, those that do can produce devices capable of receiving any ATSC 3.0 broadcast. The presence of technical standards does not convert broadcasting into a restricted service.
Second, the contractual arrangements cited apply to broadcasters and device manufacturers, not to viewers.[57] The A3SA broadcaster agreement governs access to security credentials used to encrypt and sign ATSC 3.0 signals.[58] The A3SA adopter agreement governs manufacturers’ access to the credentials needed to decrypt those signals in compliant devices.[59] Neither agreement creates a contractual relationship between broadcasters and consumers. Once a consumer purchases compliant equipment, they may receive any ATSC 3.0 signal without entering into a private contract.
Public Knowledge correctly notes that the FCC has authority to distinguish broadcast from non-broadcast services, citing National Ass’n for Better Broadcasting v. FCC.[60] But that case does not support the conclusion that encrypted ATSC 3.0 transmissions fall outside the definition of broadcasting. NABB addressed subscription-based services that required consumers to pay for access to programming. ATSC 3.0, by contrast, does not require consumers to subscribe or contract with broadcasters to receive signals. As such, encrypted ATSC 3.0 transmissions remain fundamentally different from the services at issue in NABB and continue to meet the statutory definition of broadcasting.
B. Broadcasting Need Not Be Free to Be ‘Public’
Even if ATSC 3.0 broadcasters offer paid services, the FCC retains both the authority and the responsibility to revisit its definition of “broadcasting.” National Ass’n for Better Broadcasting v. FCC relied in part on Chevron deference to uphold the commission’s interpretation of the statute.[61] With Chevron now overruled, courts no longer defer automatically to agency interpretations. In that context, courts could reasonably conclude that the statutory phrase “intended to be received by the public” does not turn on whether programming is funded by advertisers or paid for directly by consumers.[62]
The legislative history of the Radio Act—the predecessor to the Communications Act—supports a broader reading. Congress anticipated the development of subscription-based radio and other future broadcast services. Sen. Clarence Dill (D-Wash.), coauthor of both statutes, emphasized that “legislation [is] imperative if government is to retain jurisdiction over radio transmission in its many present and developing forms.”[63] That principle remains relevant as broadcasting continues to evolve.
ATSC 3.0 represents an advancement in broadcast technology and broadcast business models, not a departure from broadcasting itself. Although the FCC has previously treated paid services as distinct from broadcasting, the statute addresses communications transmitted over the airwaves and intended for reception by the public. It does not require that broadcasting be free of charge, nor does it codify a distinction between advertiser-supported and consumer-paid models.
Requiring broadcasters to rely exclusively on advertising—at a time when advertising revenue increasingly flows to competing digital platforms—could undermine the long-term viability of broadcast service. Such a constraint risks reducing consumer choice as more content migrates to over-the-top alternatives.
VI. MVPD Carriage and Retransmission Consent in the ATSC 3.0 Transition
The transition to ATSC 3.0 raises broader questions about the continued role of MVPD carriage and retransmission-consent rules in a rapidly evolving video marketplace. Any consideration of ATSC 3.0 carriage should occur within a larger reform framework. Absent such reform, the FCC should not extend must-carry or retransmission-consent obligations to ATSC 3.0 signals.
A. Modernizing MVPD Carriage and Retransmission-Consent Rules
The FCC asks whether it should modify MVPD carriage rules in light of proposals to eliminate the ATSC 1.0 simulcasting requirement.[64] Although much of the NPRM focuses on whether to extend mandatory carriage rights to ATSC 3.0 signals, this proceeding—along with related broadcast-reform efforts, such as the quadrennial review—highlights the need for broader reforms to carriage and retransmission-consent rules.
Ongoing reforms to broadcast-ownership limits will inevitably affect retransmission-consent negotiations. Regulation in this area reallocates bargaining power, but that reallocation is not inherently harmful.[65] The relevant question is whether reform increases consumer choice, lowers prices, and improves efficiency.
As the FCC revises broadcast-ownership rules and broadcasters deploy ATSC 3.0 services, the commission should consider broader changes to the carriage and retransmission framework. One option is to sunset retransmission-consent and must-carry obligations altogether. Doing so would treat broadcast programming like other video content, allowing MVPDs to select programming based on consumer demand and market value. Although this approach would present legal and political challenges, it offers the greatest potential to improve consumer welfare.
If the FCC chooses instead to extend carriage or retransmission rules to ATSC 3.0, it should adopt incremental reforms to limit market distortion. These could include strengthening good-faith negotiation requirements, restricting automatic fee-escalation clauses, adopting final-offer arbitration, and implementing targeted arbitration mechanisms to address disputes during high-value programming periods.[66] These measures would preserve the core objectives of the retransmission regime while minimizing distortions as the FCC modernizes broadcast regulation and facilitates the transition to ATSC 3.0.
B. Do Not Extend Must-Carry Obligations to ATSC 3.0
Until the FCC adopts a broader carriage and retransmission-consent framework that reflects today’s media marketplace, it should not extend must-carry obligations to ATSC 3.0 signals. The NPRM asks whether broadcast stations should be allowed to assert mandatory-carriage rights for ATSC 3.0 in light of proposals to eliminate the simulcasting and substantially similar rules. The commission should decline to do so for two reasons. First, mandatory carriage of ATSC 3.0 would require MVPDs to make technical upgrades that increase costs for consumers. Second, the market—not regulation—should determine the value and demand for ATSC 3.0 carriage.
As NCTA explains, mandatory ATSC 3.0 carriage would impose significant technical burdens, including costly system and equipment changes.[67] Broadcasters may use ATSC 3.0 to deliver enhanced audio and video features that many existing cable set-top boxes do not support.[68] Carriage could also require additional bandwidth, straining cable systems and increasing the risk of service disruptions, consumer confusion, and degraded performance.[69] MVPDs would ultimately pass these costs on to subscribers, either through higher prices or reduced service quality. Faced with those tradeoffs, some consumers may abandon MVPD services altogether, weakening competition in the video marketplace.
More fundamentally, if the FCC allows broadcasters to transition to ATSC 3.0 based on market demand, it should also allow market forces to determine whether MVPDs carry ATSC 3.0 signals. Consumers value access to broadcast programming, but ATSC 3.0 carriage may impose additional costs on MVPD subscribers. If consumers do not value those features, the FCC should not force them to pay for them. Conversely, if consumers value ATSC 3.0 enough to justify the cost, MVPDs will have strong incentives to make the necessary investments. Extending must-carry to ATSC 3.0 would short-circuit that market test and risk distorting outcomes to the detriment of consumers.
VII. Broadcast Spectrum Should Serve Its Highest-Value Use
The FCC seeks comment on the appropriate use of broadcast spectrum in the ATSC 3.0 era.[70] Some commenters express concern that ATSC 3.0 allows broadcasters to devote a substantial portion of their licensed bandwidth to data-based services at the expense of the primary broadcast feed.[71] The commission has also stated that the fundamental use of television broadcast spectrum is to provide free, over-the-air television service, and it asks how much capacity stations should reserve for that purpose after transitioning to ATSC 3.0.
This framing assumes that free, over-the-air broadcasting represents the primary and best use of broadcast spectrum. Broadcast television undoubtedly provides value to local communities. But dedicating spectrum to free television necessarily forecloses alternative uses that may generate greater consumer benefits. The relevant question is not whether free broadcasting has value, but whether it represents the highest-value use of that spectrum in all circumstances.
If a broadcaster can deliver greater value by using part of its licensed capacity for nonbroadcast services, the FCC should allow that flexibility rather than impose arbitrary capacity limits. Doing so would enable broadcasters to maximize consumer value and would encourage more efficient use of scarce spectrum resources. At a minimum, the commission should require only that each station provide a single free, over-the-air broadcast stream, while allowing licensees discretion over how they use the remainder of their allocated bandwidth.
Technical constraints may limit the viability of alternative services in some cases, and many broadcasters will continue to prioritize traditional free television. But the FCC should not predetermine outcomes that the market can resolve. While the FCC must protect licensees from harmful interference, it should otherwise grant broadcasters the flexibility to deploy their spectrum in its highest and best use.
VIII. Conclusion
The FCC should continue to pursue a voluntary, market-driven transition to ATSC 3.0 while removing regulatory barriers that slow adoption and limit consumer benefits. In particular, the FCC should end mandatory simulcasting and the related “substantially similar” requirements, which impose significant costs, constrain ATSC 3.0 functionality, and dilute the very features that could make the new standard valuable to viewers. Allowing broadcasters to decide when and how to transition—based on audience demand, competitive conditions, and local market needs—will better align incentives and promote efficient investment.
A flexible approach also recognizes the realities of today’s media marketplace. Broadcasters compete not only with one another, but with streaming platforms, social media, and other digital services that face far fewer regulatory constraints. Rules that force broadcasters to maintain legacy services, limit spectrum use, restrict encryption and monetization strategies, or mandate carriage and equipment adoption risk pushing consumers toward those alternatives rather than preserving free, over-the-air television.
The FCC should therefore resist mandates that shift transition costs onto consumers, MVPDs, or equipment manufacturers, and instead allow market signals to guide adoption. Where consumer demand exists, broadcasters will deploy ATSC 3.0, manufacturers will supply compatible devices, and MVPDs will carry new services. Where demand does not exist, regulation should not compel investment that consumers have not chosen to make.
By focusing on flexibility rather than prescription, the FCC can facilitate a successful ATSC 3.0 transition that preserves local broadcasting, encourages innovation, and maximizes the value of broadcast spectrum, all without distorting markets or undermining consumer choice.
[1] Authorizing Permissive Use of the “Next Generation” Broadcast Television Standard, Further Notice of Proposed Rulemaking, GN Docket No. 16-142 (2025), https://docs.fcc.gov/public/attachments/DOC-415053A1.pdf (“NPRM”).
[2] 47 U.S.C. § 303.
[3] ATSC 3.0 Is Now On-The-Air in 45 Markets, Reaching More than 40% of U.S. TV Viewers. 70 Television Models Now Come Equipped with NEXTGEN TV Electronics, and More Are on the Way, Adv. Television Sys. Comm. (2022), https://www.atsc.org/wp-content/uploads/2022/02/ATSC-CES-Market-Map-web.pdf.
[4] Authorizing Permissive Use of the “Next Generation Broadcast Television Standard,” Petition for Rulemaking, GN Docket No. 16-142 (Feb. 26, 2025), https://nab.org/documents/newsRoom/pdfs/Petition_for_Rulemaking_ATSC3.pdf (“NAB Petition”).
[5] NPRM at 14.
[6] NPRM at 16.
[7] The Future of Television Initiative Report, at 5–6, GN Docket No. 16-142 (Jan. 17, 2025).
[8] Id. at 5.
[9] Letter from Alisa Valentin, Broadband Policy Director Public Knowledge, Authorizing Permissive Use of the “Next Generation” Broadcast Television Standard, GN Docket No. 16-142 (Oct. 20, 2025), https://www.fcc.gov/ecfs/document/1020046267433/1.
[10] 47 C.F.R § 73.3801(b).
[11] NAB Petition at n. 24.
[12] Id. at 11.
[13] Foreign Anti-Digital Piracy Act, H.R. 791, 119th Cong. (2025), https://www.congress.gov/bill/119th-congress/house-bill/791/text#:~:text=Introduced%20in%20House%20(01%2F28,Ms.; Block Bad Elec. Art & Recording Distribs. Act of 2025 (discussion draft released Jul. 30), https://www.tillis.senate.gov/services/files/24A0311C-E658-4440-A259-AA8A876115E6.
[14] Paving the Way for Enhanced Security, ATSC 3.0 Sec. Auth. (last visited Jan. 8, 2026), https://a3sa.com.
[15] 47 C.F.R. § 2.1(c).
[16] NPRM at ¶ 44-57.
[17] Comments of NCTA – The Internet & Television Association, Authorizing Permissive Use of the ”Next Generation” Broadcast Television Standard, at 9-17, GN Docket No. 16-142 (May 7, 2025), https://www.fcc.gov/ecfs/document/10508334120287/1.
[18] Cable Television Consumer Protection and Competition Act of 1992, Pub. L. No. 102-385, 106 Stat. 1460 (codified as amended in scattered sections of 47 U.S.C.).
[19] Eric Fruits, Geoffrey A. Manne, & Kristian Stout, Broadcast Ownership, Retransmission, and the Case for Comprehensive Reform, Int’l Ctr. for Law & Econ. (Nov. 18, 2025), https://laweconcenter.org/resources/broadcast-ownership-retransmission-and-the-case-for-comprehensive-reform.
[20] Id.
[21] Id.
[22] Promoting Broadcast Internet Innovation through ATSC 3.0, Report and Order, MB Docket No. 20-145 para. 4 (Dec. 10, 2020), https://docs.fcc.gov/public/attachments/FCC-20-181A1.pdf.
[23] Ben Sperry, First Amendment Jurisprudence Should Reflect Economic Reality: Why Red Lion and Pacifica Must Fall, Truth on the Mkt. (Oct. 14, 2025), https://truthonthemarket.com/2025/10/14/first-amendment-jurisprudence-should-reflect-economic-reality-why-red-lion-and-pacifica-must-fall.
[24] See Fruits, Manne, & Stout, supra note 19.
[25] See Comments of the International Center for Law and Economics, FCC Quadrennial Regulatory Review of Broadcast-Ownership Rules, MB Docket No. 22-459 (Dec. 17, 2025), https://laweconcenter.org/wp-content/uploads/2025/12/FCC-Broadcast-Ownership-NPRM-2025.pdf.
[26] See Comments of the International Center for Law and Economics, FCC Quadrennial Regulatory Review of Broadcast-Ownership Rules, MB Docket No. 22-459 (Dec. 17, 2025), https://laweconcenter.org/wp-content/uploads/2025/12/FCC-Broadcast-Ownership-NPRM-2025.pdf.
[27] NPRM at n. 106.
[28] Rick Ducey, ATSC 3.0’s Road from Lighthouse to Cutover: Discussion with NAB’s Lynn Claudy on Leading Local Insights Podcast, BIA Advis. Svcs. (Mar. 14, 2023), https://www.bia.com/blog/atsc-3-0s-road-from-lighthouse-to-cutover-discussion-with-nabs-lynn-claudy-on-leading-local-insights-podcast (“If you have five broadcasters that want to participate, and only one lighthouse in the market, that means each broadcaster only gets access to essentially 20% of the data rate of that channel. And that’s going to be true until we can turn off what I sometimes call POD TV, or Plain Old DTV. This leads to the issue of when you can turn off ATSC 1.0 and not have mass viewer disenfranchisement, and how do you make sure no viewer is left behind. When you can get rid of ATSC 1.0 television, then each station gets their own six MegaHertz channel. Then they can have all the flexibility of ATSC 3.0 and all the data rate that the channel is capable of, for their own station. The implications of this for the services that are available currently, are that it’s really hard to support things like 4K, Ultra HDTV, for example, because stations are sharing their data capacity, and 4K takes up a lot of data space.”)
[29] All-Channel Receiver Act, Pub. L. No. 87-529, 76 Stat. 150 (1962) (codified as amended at 47 U.S.C. § 303(s)).
[30] NAB Petition at 17.
[31] Jim Kimble, ATSC 3.0 (NextGen TV): What It Is and Whether It’s Worth It, Antenna Land (Jul. 8, 2025), https://www.antennaland.com/what-is-nextgen-tv-should-you-try-it/#:~:text=ATSC%203.0%20is%20not%20backward,There’s%20Still%20Time%20to%20Wait.
[32] Comments of Consumer Technology Association, Authorizing Permissive Use of the “Next Generation” Broadcast Standard, MB Docket No. 16-142 (May 7, 2025), https://www.fcc.gov/ecfs/document/10507299146733/1.
[33] 47 U.S.C. § 303(s).
[34] Thomas W. Hazlett, The U.S. Digital TV Transition: Time to Toss the Negroponte Switch? (AEI-Brookings Joint Ctr. for Regul. Stud. Working Paper No. 01-15, Nov. 2001), at 27-28, https://ssrn.com/abstract=294206.
[35] Id.
[36] Id.
[37] Jon Lafayette, Diginets’ Future May Just Be Now, Next TV (Feb. 9, 2015), https://www.nexttv.com/news/diginets-future-may-just-be-now-137823.
[38] See Comments of the International Center for Law and Economics, FCC Quadrennial Regulatory Review of Broadcast-Ownership Rules, MB Docket No. 22-459 (Dec. 17, 2025), https://laweconcenter.org/wp-content/uploads/2025/12/FCC-Broadcast-Ownership-NPRM-2025.pdf.
[39] Matthew Keys, Broadcast Group, SiliconDust Trade Blame Over NextGen TV DVR Issue, TheDesk.net (Jul. 21, 2025), https://thedesk.net/2025/07/silicondust-pearl-tv-hdhomerun-atsc-3.
[40] Comments of Public Knowledge, Petition for Rulemaking and Future of Television Initiative Report Filed by the National Association of Broadcasters, at 3, MB Docket No. 16-142 (May 7, 2025), https://www.fcc.gov/ecfs/document/105071750416733/1.
[41] Jared Newman, NextGen TV’s DRM Puts Future of the Over-the-Air DVR in Doubt, TechHive (Jul. 28, 2023), https://www.techhive.com/article/2009693/nextgen-tv-drm-puts-future-of-the-over-the-air-dvr-in-doubt.html.
[42] Next Generation Television (ATSC 3.0) Station Transition Guide, Nat’l Ass’n Broad. (2020), https://www.atsc.org/wp-content/uploads/2020/05/NAB-ATSC-3.0-Guide_Final.pdf.
[43] Ducey, supra note 28.
[44] 47 C.F.R. § 73.3801(b)(1), (f)(5).
[45] The Future of Television Initiative Report, at 18, GN Docket No. 16-142 (Jan. 17, 2025).
[46] Comments of Sinclair Inc., Authorizing Permissive Use of the “Next Generation” Broadcast Television Standard, at 12, GN Docket No. 16-142 (May 7, 2025), https://www.fcc.gov/ecfs/document/1050739202137/1.
[47] What 216 Billion Visits to Piracy Sites Reveal About Global Media in 2024, MUSO (Jun. 12, 2025), at 2, https://www.muso.com/blog/what-216-billion-visits-to-piracy-sites-reveal-about-global-media-in-2024.
[48] George Winslow, Securing the Future of Broadcast TV in the U.S., tvtech (Dec. 9, 2025), https://www.tvtechnology.com/news/securing-the-future-of-broadcast-tv-in-the-u-s.
[49] See, e.g., Comments of Manoj George, Authorizing Permissive Use of the “Next Generation” Broadcast Television Standard, at 12, GN Docket No. 16-142 (Dec. 29, 2025), https://www.fcc.gov/ecfs/search/search-filings/filing/12290840709265.
[50] Public Knowledge, supra note 40 at 18.
[51] See Sony Corp. of America v. Universal City Studios, 464 U.S. 417 (1984).
[52] NPRM at ¶ 37.
[53] 47 U.S.C. § 153(6)-(7); Subscription Video, 52 Fed. Reg. 6123, 6153 (1987), aff’d sub nom. Nat’l Ass’n for Better Broad. v. FCC, 849 F.2d 665 (D.C. Cir. 1988).
[54] Authorizing Permissive Use of the “Next Generation” Broadcast Television Standard, Report and Order and Further Norice of Proposed Rulemaking, GN Docket No. 16-142 ¶ 9 (Nov. 16, 2017), https://docs.fcc.gov/public/attachments/FCC-17-158A1.pdf.
[55] Public Knowledge, supra note 40 at 23.
[56] Id.
[57] Id.
[58] Security Systems for NextGen TV Broadcasts: Executive Summary, A3SA (Mar. 24, 2022), at 1, A3SA.com.
[59] Id. at 2.
[60] 849 F.2d 665 (D.C. Cir. 1988).
[61] See id. at 668.
[62] 47 U.S.C. § 153(7).
[63] 67 Cong. Rec. 12,351 (1926) (statement of Sen. Dill), https://www.congress.gov/bound-congressional-record/1926/06/30/senate-section.
[64] NPRM at ¶ 44.
[65] Fruits, Manne, & Stout, supra note 19.
[66] Id.
[67] Comments of NCTA – The Internet & Television Association, Authorizing Permissive Use of the “Next Generation” Broadcast Television Standard, at 2, GN Docket 16-142 (May 7, 2025), https://www.fcc.gov/ecfs/document/10508334120287/1.
[68] Id. at 11.
[69] Id. at 14.
[70] NPRM at ¶ 68.
[71] Id.