Wireless Cable: It Could Work With ATSC 3.0

At the NAB chairman’s reception at the NAB Show, I happened to chat with two broadcasters — Gary Chapman, the retired CEO of LIN Broadcasting, and Jeff Smulyan, CEO of Emmis Communications, a radio company  that temporarily ventured into TV station ownership around the turn of the century — about a little history they had in common.

For a couple of years in the mid-2000s, each was involved in startups that wanted to use broadcasters’ digital subchannels for what was called wireless cable — a lean, low-cost alternative to the conventional cable and satellite TV services with their scores of channels and budget-busting monthly bills.

The wireless cable services would broadcast a dozen or two of the most popular cable networks to consumers for a monthly fee of $20 or $25. Since the signals were encrypted, subscribers would need to buy or lease a set-top box. Local broadcast signals in HD would be bundled into the package.

The startup that got the furthest was USDTV. Founded by one-time broadcaster Steven Lindsley in 2003, it launched a service (30 channels for $20) in 2004 in four test markets — Dallas, Salt Lake City, Las Vegas and Albuquerque, N.M.

Chapman was a vocal proponent of USDTV and LIN was one of several station groups to make substantial investments in the service. Fox, Hearst and Morgan-Murphy also backed the enterprise.

The other wireless cable venture was of Smulyan’s invention. He managed to win the support of several station groups for what he called Wireless TV, including Scripps, Media General, Meredith, Nexstar and Raycom.

Smulyan still thinks the business plan was “incredibly elegant,” combining broadcasters’ fallow digital spectrum and their ability to market into a whole new source of revenue and a cable competitor that would give them leverage in retrans negotiations that had yet to yield any cash.

The services were a bust. By 2006, USDTV was in bankruptcy and Smulyan’s venture never got off the ground, never even made it to a test phase.

Chapman told me USDTV ran aground for a number of reasons. People weren’t keen on paying more than $100 for the set-top box, reception was iffy (“it did not work in all situations”) and in the end the broadcast backers balked at making the hefty capital contributions that would be necessary to keep going.

“It was a concept — a business — that was ahead of its time,” Chapman said.

Smulyan said the big problem was the large multimedia companies that controlled the broadcast networks and the access to the large markets. They couldn’t square the opportunity with the disruption it would cause their cable programming businesses and their cable system partners, so for the most part they opted not to play.

Smulyan said that it was also difficult getting other broadcasters to cooperate at the level the venture would require. “They didn’t did all play well with each other.”

As I recall, it also didn’t help that the two companies were competing for the support of other broadcasters and took to trashing each other’s technology and plans.

In any event, wireless cable went away. Today, broadcasters use their subchannels to air ad-supported networks, everything from CW and MNT to MeTV and Bounce TV. They produce nice ancillary revenue streams.

Wireless cable should probably stay dead, but I can’t help but think it might be worth resurrecting, given all the current interest in skinny bundles like Dish’s Sling TV and Sony’s PlayStation Vue, and the prospect of ATSC 3.0, the new broadcast standard.

The interest in skinny bundles, which rely on broadband instead of broadcast for distribution, suggest that dissatisfaction with the bloated, expensive bundles of cable and satellite has risen to a point where consumers are ready to act. The demand is there.

And ATSC 3.0 should make for a much better wireless cable platform than the ATSC 1.0 platform that USDTV and Smulyan had to work with.

For one thing, bolstered by repeaters operating on the same channels, 3.0 signals should be able to reliably reach viewers in their homes without the need for outdoor antennas or even elaborate indoor antennas. You couldn’t say the same for ATSC 1.0, especially in 2004 and 2005 before the receiver chips had been optimized and many station were still trying to broadcast DTV on VHF channels.

Reliable reception is nice if the service is advertiser-supported and free; it’s absolutely vital if people are paying for the service.

Here’s another possible 3.0 advantage. Conditional access is being built into the 3.0 standard so that it could also be built into 3.0 receivers. In other words, a wireless cable service could be launched without the need of a set-top box.

Like Smulyan, the wireless cable entrepreneur of today is likely to run into opposition from the broadcast networks that like to tightly control how their programming is distributed. But I don’t think that matters.

In fact, as I see it, the wireless cable packages would not need to include any broadcast signals. Consumers can pick them up off the air just like the free services they are. The pay package should include only the cable networks — the programming they can’t get off air.

So, why broadcasting-based wireless cable rather than broadband-based skinny bundles?

I can answer that.

To receive a broadband service like PlayStation Vue in the home, the consumer has to pay twice — once to the skinny bundle provider and once to his cable operators for broadband service, which can be $50 a month or more.

With the broadcasting-based wireless cable, he pays only once. He can be a real cord-cutter and still enjoy the best of cable TV.

The great thing about 3.0 is that it opens up all kinds of new business opportunities for broadcasters. They cannot pursue them all because the spectrum that fuels them is limited and will become more so after the incentive auction.

But for now, wireless cable is worth keeping on the list of possible ones.

Harry A. Jessell is editor of TVNewsCheck. He can be contacted at 973-701-1067 or [email protected]. You can read earlier columns here.