Sinclair Full Speed On 3.0 Despite Merger Fail
Two weeks ago, Sinclair Broadcast Group’s self-described “transformative” merger with Tribune collapsed under the weight of charges that it misled the FCC in seeking its approval of the deal.
As a result, it lost the strategic opportunity to vastly increase its over-the-air coverage to two-thirds of U.S. TV homes, including the millions in New York, Los Angeles and Chicago.
It also created financial problems for itself. It will likely need to reach settlements with Tribune, which is demanding $1 billion for breach of contract, and the FCC. Both would be costly.
Some ATSC 3.0 proponents wonder whether the fallout will affect Sinclair’s big ambitions for exploiting the new broadcast standard. Those ambitions require lots of spectrum and lots of money.
But executives leading the 3.0 charge for Sinclair say not to worry, that Sinclair’s commitment to the technology is unshaken. They say they will aggressively pursue their plan for developing, testing and rolling out data-based, mobile-first 3.0 services.
“I’ve got no indication from management that I am to do anything other than what I have been doing, which is full speed ahead on development and coaxing an industry into its future,” says Mark Aitken, VP of advanced technology at Sinclair, who is working on 3.0 technology through Sinclair’s One Media 3.0 subsidiary.
John Hane, president of Spectrum Co., a joint venture of Sinclair and Nexstar, also says it’s business as usual. Sinclair’s woes have had no impact, he says. “We’re still hiring, we still have our funding, and nothing has really changed.”
Aitken and Hane acknowledge that Sinclair’s footprint will not be nearly as large as it would have been had it closed on the Tribune merger. But, they say, it hardly matters. Sufficient spectrum and reach can be obtained through partnerships with other broadcasters, if not though acquisitions.
“We still have Sinclair and Nexstar, and many other groups are very interested and will come in this year,” says Hane. “I am absolutely confident we are going to have critical mass. This is a marathon, not a sprint.”
At Spectrum Co., Hane sees his immediate role as working closely with other station groups in a market-by-market rollout of 3.0 over the next couple of years.
That not only means converting stations in each market to 3.0, but also establishing common host stations that would simulcast programming with the current 1.0 standard so as not to cut off service to over-the-air viewers with the incompatible 1.0 TV sets.
The FCC left it to broadcasters to work out the transition plan, Hane says. “In one sense, it’s easier because we get to control our destiny. In another, it’s harder because we have to figure out how to do this without transition channels.”
Hane says the industry is “very close to getting consensus” on a plan that will allow stations to transition market-by-market and it should be finalized well before the end of the year. “We are just working out the details.”
While working with other broadcasters on the 3.0 build-out and transition, Hane says, Spectrum Co. will go its own way on developing 3.0 services.
The Pearl consortium of leading station groups believes the best use of 3.0 is to provide enhancements to conventional broadcasting — 4K, immersive audio and targeted advertising. The consortium comprises several leading station groups including Scripps, Tegna, Cox, Graham, Hearst, Meredith, Raycom and Nexstar.
Rather than such “core” services, Hane and Spectrum Co. is focused on using excess 3.0 capacity for new datacasting services for consumers and businesses. They range from video to updates for autonomous cars, from data for the Internet of Things to extra security layers for other networks.
When Spectrum Co. demonstrates the viability of such services, Hane says, more broadcasters will come aboard. “People will commit spectrum to Spectrum Co. because there is not really a path for broadcasters to monetize the capacity separately.”
Aitken describes what Sinclair has in mind as a “cloud-based hybrid [platform] where the provision of broadcast is one piece of it, the provision of wireless internet is another piece and the provision of fixed internet services to the home is yet another piece.”
Mobility is key, he says. “It’s in the home and it’s on the phone, it’s on the tablet and it’s in the car. It’s everywhere.”
To make it possible, Aitken is primarily focused on two projects.
The first is the development of receive chips small enough for use in small devices like smartphones. The effort began in May 2017 and will culminate early next year with the availability of chips in quantity.
According to Aitken, Sinclair — through One Media 3.0 — has contracted with Samsung to manufacture the chips and the first run of them should be ready for testing in November and demonstration at CES in Las Vegas in January.
A second project is in Dallas. There, with the cooperation of Univision and Tribune, One Media is setting up a single frequency network of one full-power station and three ancillary stations — all operating on the same UHF frequency. The ancillary stations extend and fill in the signal of the main station, providing more uniform and reliable reception throughout a market.
One of the great advantages of 3.0 is that multiple stations can air overlapping signals without their interfering with one another.
In the first phase, Univision’s KSTR will broadcast in 3.0, while Cunningham’s KTXD serves as the host, simulcasting KSTR programming with the 1.0 standard. American Tower is building the three ancillary 3.0 transmission sites that will broadcast in tandem with KSTR.
“From an infrastructure standpoint, we are thumbs up,” says Aitken. “All the individual elements have been brought up in play; we just haven’t pushed the button for them to work all at once.
“Now it is a matter of slogging through the FCC paperwork.” If that goes well, the SFN should be up and running in 45 days, he says, noting that his forecasts tend to be optimistic.
The Pearl group has a parallel 3.0 project in Phoenix involving several of its member-groups, tech vendors and CE companies. As Sinclair is not involved in the project, it will be untouched by Sinclair’s regulatory troubles.
Univision’s KFPH-CD is already broadcasting a 3.0 signal and a second station will switch to the new standard next spring.
“Phoenix is a consumer test,” said Pearl Executive Director Anne Schelle. “We’ll be moving out with consumer testing this fall with the CE manufacturers. We’re looking to determine what that service launch profile looks like. From a consumer perspective, what’s going to move those devices off those retail shelves.”
“We’ve always said we’re looking at a 2020 launch with TV manufacturers, and we’re on track in terms of that development,” Schelle adds.
Schelle says she sees the Sinclair and Pearl efforts as complementary. “It’s synergistic in terms of overall development.”
And like Hane, she says that there is a “broad industry movement to a national build [transition plan], and all parties are participating.”
As EVP of strategic and legal affairs at One Media, Jerry Fritz is another in the Sinclair camp who sees no slowing in the group’s desire to move the entire industry to a 3.0-driven future.
“That train has left the station with very broad support from the entire broadcast industry writ large. Many broadcasters are deploying 3.0 capable transmitters as they go through [FCC mandated spectrum] repack, and learning from early deployment markets like Phoenix and Dallas will help make future transitions much easier.”
Doug Halonen contributed to this story.