[Federal Register Volume 85, Number 137 (Thursday, July 16, 2020)]
[Rules and Regulations]
[Pages 43142-43145]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-13202]



[[Page 43142]]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 73

[MB Docket Nos. 20-145; FCC 20-73; FRS 16852]


Promoting Broadcast Internet Innovation Through ATSC 3.0

AGENCY: Federal Communications Commission

ACTION: Declaratory Ruling.

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SUMMARY: In this document, the Commission removes regulatory 
uncertainty that could hinder the development of the new, innovative 
uses of broadcast spectrum that the ATSC 3.0 standard enables. 
Specifically, we clarify that long-standing television station 
ownership restrictions do not apply to the lease of spectrum to provide 
Broadcast internet services. By taking this step today, we help ensure 
that market forces, and not television station ownership rules that 
were written for different services, are brought to bear on and 
determine the success of the nascent Broadcast internet segment. This 
step will also help ensure that broadcasters and other innovators have 
the flexibility to generate the scale--both locally and nationally--
that may be necessary to support certain Broadcast internet services 
without being subject to regulations unrelated to the provision of such 
services. A Notice of Proposed Rulemaking relating to the broadcast 
ancillary and supplementary service rules is published elsewhere in 
this issue of the Federal Register.

DATES: This Declaratory Ruling took effect June 9, 2020.

FOR FURTHER INFORMATION CONTACT: For additional information on this 
proceeding, contact John Cobb, [email protected] of the Policy 
Division, Media Bureau, (202) 418-2120.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Declaratory Ruling, MB Docket Nos. 20-145; FCC 20-73, adopted and 
released on June 9, 2020. A summary of the Notice of Proposed 
Rulemaking adopted concurrently concerning the broadcast ancillary and 
supplementary service rules is published elsewhere in this issue of the 
Federal Register. The full text of this document is available for 
public inspection and copying during regular business hours in the FCC 
Reference Center, Federal Communications Commission, 445 12th Street 
SW, CY-A257, Washington, DC 20554. The full text of this document will 
also be available via ECFS (http://www.fcc.gov/cgb/ecfs/). (Documents 
will be available electronically in ASCII, Word, and/or Adobe Acrobat.) 
The complete text may be purchased from the Commission's copy 
contractor, 445 12th Street SW, Room CY-B402, Washington, DC 20554. To 
request these documents in accessible formats (computer diskettes, 
large print, audio recording, and Braille), send an email to 
[email protected] or call the Commission's Consumer and Governmental 
Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (TTY).

Synopsis

    The United States is transitioning to a new era of connectivity. 
From innovative 5G offerings to high-capacity fixed services and an 
entirely new generation of low-earth orbit satellites, providers from 
previously distinct sectors are competing like never before to offer 
high-speed internet services through a mix of different technologies. 
The Commission has been executing on a plan to identify and remove the 
overhang of unnecessary government regulations that might otherwise 
hold back the introduction and growth of new competitive offerings. We 
want the marketplace--not outdated rules--to determine whether new 
services and technologies will succeed. Broadcasters, as well as a 
range of other entities, now have the potential to use broadcast 
spectrum to enter the converged market for connectivity in ways not 
possible only a few short years ago.
    With this item, we take important steps to further unlock the 
potential of broadcast spectrum, empower innovation, and create 
significant value for broadcasters and the American public alike by 
removing the uncertainty cast by legacy regulations. More than twenty 
years ago, during the transition from analog to digital broadcast 
television, the Commission adopted rules allowing digital television 
(DTV) licensees to provide ancillary or supplementary services on their 
excess spectrum capacity and authorized licensees to enter into leases 
with other entities that would provide such services. Flash forward to 
today, and the conversion of digital television from the first-
generation technologies associated with the ATSC 1.0 standard to the 
next-generation of ancillary services that will be enabled by ATSC 3.0 
is now underway. This new technology promises to expand the universe of 
potential uses of broadcast spectrum capacity for new and innovative 
services beyond traditional over-the-air video in ways that will 
complement the nation's burgeoning 5G network and usher in a new wave 
of innovation and opportunity. These new offerings over broadcast 
spectrum can be referred to collectively as ``Broadcast internet'' 
services to distinguish them from traditional over-the-air video 
services. Broadcasters will not only be able to better serve the 
information and entertainment needs of their communities, but they will 
have the opportunity to play a part in addressing the digital divide 
and supporting the proliferation of new, IP-based consumer applications 
or voluntarily entering into arrangements to allow others to invest in 
achieving those goals. We undertake this proceeding to ensure that our 
rules help to foster the introduction of new services and the efficient 
use of spectrum.
    By our Declaratory Ruling, we remove regulatory uncertainty that 
could hinder the development of the new, innovative uses of broadcast 
spectrum that the ATSC 3.0 standard enables. Specifically, we clarify 
that long-standing television station ownership restrictions do not 
apply to the lease of spectrum to provide Broadcast internet services. 
This means that a broadcast television licensee can lease spectrum to 
another broadcaster (including one operating in the same geographic 
market) or to a third party for the provision of ancillary and 
supplementary services without triggering the Commission's attribution 
or ownership rules for television stations. Those television station 
rules, which identify the specific kinds of ``cognizable interests'' 
that allow a party to ``own, operate or control'' a television station 
or ``otherwise provid[e] an attributable interest, . . . pursuant to 
[specified] criteria,'' regulate traditional broadcast television 
service and therefore have no application to innovative Broadcast 
internet services. By taking this step today, we help ensure that 
market forces, and not television station ownership rules that were 
written for different services, are brought to bear on and determine 
the success of the nascent Broadcast internet segment. This step will 
also help ensure that broadcasters and other innovators have the 
flexibility to generate the scale--both locally and nationally--that 
may be necessary to support certain Broadcast internet services without 
being subject to regulations unrelated to the provision of such 
services. For instance, a single entity could use this leasing 
mechanism to acquire the rights to offer Broadcast internet services on 
multiple broadcast channels in the same market. And that same entity 
could put together a nationwide footprint for the provision of

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Broadcast internet services. Combined, this can help create an even 
more attractive market for the deployment of competitive Broadcast 
internet services.
    As noted, the Commission last addressed these issues over twenty 
years ago, well before the ongoing transition to ATSC 3.0 dramatically 
increased the scope of innovative new services that can be provided and 
expanded the types of leasing arrangements that will help facilitate 
greater access to broadcast spectrum by third parties. Therefore, 
questions have been raised about the application of our prior ancillary 
services regime to these new offerings. Our decision today will help 
provide the stable and predictable regulatory environment that is 
critical if parties are to invest heavily in new Broadcast internet 
services and thus aid in their proliferation.
    Background. Commission Regulations Applicable to Ancillary and 
Supplementary Services. Pursuant to section 336 of the 
Telecommunications Act of 1996 (the 1996 Act), Congress established the 
framework for licensing DTV spectrum to television broadcasters and 
permitted them to offer ancillary and supplementary services consistent 
with the public interest. Congress recognized that the transition from 
analog to digital broadcast technology would enable DTV licensees to 
provide new and innovative services, including various forms of data 
services, over their additional spectrum capacity and wanted to provide 
licensees with the flexibility necessary to utilize fully that new 
potential. Accordingly, section 336 directed the Commission to adopt 
regulations that would allow DTV licensees to make use of excess 
spectrum capacity, so long as the ancillary or supplementary services 
carried on DTV capacity do not derogate any advanced television 
services (i.e., free over-the-air broadcast service) that the 
Commission may require. Such ancillary or supplemental services are 
also subject to any Commission regulations that are applicable to 
analogous services. The statute also directed the Commission to impose 
a fee on ancillary or supplementary services for which the DTV licensee 
charges a subscription fee or receives compensation from a third party 
other than commercial advertisements used to support non-subscription 
broadcasting.
    The Commission adopted the initial rules governing the provision of 
ancillary or supplementary broadcast services in 1997 as part of the 
DTV Fifth Report and Order. Consistent with the Act, the rules obligate 
DTV licensees to ``transmit at least one over-the-air video program 
signal at no direct charge to viewers on the DTV channel.'' This means 
that regardless of whatever other services a broadcaster may provide 
over its spectrum, it must continue to provide one free stream of 
programming to viewers. As long as DTV licensees satisfy that 
obligation, the rules permit them to ``offer services of any nature, 
consistent with the public interest, convenience, and necessity, on an 
ancillary or supplementary basis'' provided the services do not 
derogate the licensee's obligation to provide one free stream of 
programming to viewers and are subject to any regulations on services 
analogous to the ancillary or supplementary service. These rules 
reflect the Commission's intent to promote the public interest by 
maximizing ``broadcasters' flexibility to provide a digital service to 
meet the audience's needs and desires.''
    The Commission initiated a separate proceeding to determine how 
best to assess and collect the statutorily required fee for ancillary 
or supplementary services. The statute directed the Commission to adopt 
a fee structure that would ``recover for the public a portion of the 
value of the public spectrum resource made available for such 
commercial use, and . . . avoid unjust enrichment through the method 
employed to permit such uses of that resources.'' It also specifically 
instructed the Commission to set the fee at a value that, ``to the 
extent feasible, equals but does not exceed (over the term of the 
license) the amount that would have been recovered had such services 
been licensed pursuant to the provisions of section 309(j) of [the Act] 
and the Commission's regulations thereunder.'' Ultimately, the 
Commission determined that a fee based on a percentage of the gross 
revenues generated by feeable ancillary or supplementary services was 
the best option to satisfy the statutory directive and achieve the goal 
of incentivizing innovation to maximize spectrum efficiency. The 
Commission set the fee at five percent of gross revenues received from 
any feeable ancillary or supplementary services.
    Subsequently, the Commission clarified the ancillary or 
supplementary service rules as applied to noncommercial educational 
(NCE) television licensees. The Commission concluded that Sec.  73.621 
of the rules, which requires public NCE stations to provide a nonprofit 
and noncommercial broadcast service, would apply to the provision of 
ancillary or supplementary services by NCE licensees. However, the 
Commission also decided to allow NCE licensees to offer subscription 
services on their excess capacity and to advertise on ancillary or 
supplementary services that do not constitute broadcasting. Finally, 
the Commission concluded that section 336(e) of the Act does not exempt 
NCE licensees ``from the requirement to pay fees on revenues generated 
by the remunerative use of their excess digital capacity, even when 
those revenues are used to support their mission-related activities.''
    Pursuant to section 336(e)(4) of the Act, the Commission originally 
adopted rules requiring all DTV licensees and permittees annually to 
file a form (currently Form 2100, Schedule G), reporting information 
about their use of the DTV bitstream to provide feeable ancillary and 
supplementary services. In 2017, as a part of the Modernization of 
Media Regulation Initiative, the Commission revised these filing 
requirements. The Commission concluded that requiring every DTV 
licensee to file the form was an unnecessary regulatory burden, as very 
few licensees offered any feeable service, and instead changed the 
rules to require only those licensees who had provided feeable 
ancillary or supplementary services during the applicable reporting 
period to file the form. As the Commission observed, at that time only 
a fraction of all television broadcast stations provided feeable 
ancillary or supplementary services despite expectations in the wake of 
the digital transition.
    Next Generation Broadcast Standard (ATSC 3.0). ATSC 3.0 is the 
``Next Generation'' broadcast television (Next Gen TV) transmission 
standard developed by the Advanced Television Systems Committee as the 
world's first IP-based broadcast transmission platform, which ``merges 
the capabilities of over-the-air broadcasting with the broadband 
viewing and information delivery methods of the internet, using the 
same 6 MHz channels presently allocated for DTV service.'' As stated in 
the Next Gen TV Report and Order, the ATSC 3.0 standard will allow 
broadcasters to ``offer exciting and innovative services,'' including 
superior reception, mobile viewing capabilities, enhanced public safety 
capabilities (such as advanced emergency alerting capable of waking up 
sleeping devices to warn consumers of imminent emergencies), enhanced 
accessibility features, localized and/or personalized content, 
interactive educational children's content, and other enhanced 
features. In 2017, the Commission authorized broadcasters to begin the 
transition to ATSC 3.0 voluntarily and established standards to 
minimize the impact on, and costs to, consumers and other industry

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stakeholders. The Media Bureau began accepting applications for Next 
Gen TV licenses on May 28, 2019. Earlier this year, the Commission 
adopted a Notice of Proposed Rulemaking seeking comment on proposed 
changes to the rules governing the use of distributed transmission 
systems (DTS) by broadcast television stations. Proponents of the 
changes assert that they will facilitate the use of new and innovative 
technologies that will improve traditional broadcast service and mobile 
reception of broadcast signals, as well as allow the more efficient use 
of broadcast spectrum, which they claim would enable broadcasters to 
exploit more fully the new capabilities resulting from ATSC 3.0.
    ATSC 3.0 provides greater spectral capacity than the current 
digital broadcast television standard, allowing broadcasters to 
innovate, improve service, and use their spectrum more efficiently. 
Although today many broadcasters are focused solely on deploying 
traditional broadcast television services using the ATSC 3.0 standard, 
some broadcasters and third-party groups are looking to the future and 
examining ways broadcasters can become part of the 5G ecosystem and 
provide myriad other services using the enhanced capabilities of ATSC 
3.0 technologies. Specifically, these groups hope to utilize television 
spectrum to provide non-traditional broadcast video services such as 
video-on-demand or subscription video services and new, innovative non-
broadcast services in such areas as the automotive industry, 
agriculture, distance learning, telehealth, public safety, utility 
automation, and the ``Internet of Things'' (IoT). Providing a 
regulatory environment to enable a thriving secondary market is key to 
unlocking the potential for such Broadcast internet services via ATSC 
3.0.
    Declaratory Ruling. The Communications Act and the Commission's 
rules provide clear authority for the provision of ancillary and 
supplementary services by broadcast television stations, including 
through spectrum lease agreements, yet few such services have been 
offered over the past two decades and none appear to have been offered 
extensively or systematically across the television industry. 
Accordingly, the Commission has had little occasion to opine on these 
rules since their adoption over twenty years ago. With the advent of 
ATSC 3.0, however, broadcasters may be better positioned to realize the 
potential long envisioned by Congress and the Commission when they were 
granted the flexibility to use their spectrum in new and novel ways to 
benefit their local communities and the American people. We expect that 
our clarification today will help promote increased investment in 
broadcast television stations, thereby enabling them to better serve 
their local markets.
    As the Commission has noted, some licensees may find it useful to 
develop partnerships with other broadcasters or third parties to help 
make the most productive and efficient use of their spectrum, and the 
Commission has stated that it would ``look with favor on such 
arrangements.'' In some cases, a broadcaster may lease a portion of its 
spectrum to a separate and unrelated entity that, instead of the 
broadcaster, would provide ancillary and supplementary services to the 
consumer. Conversion of broadcast television to the ATSC 3.0 
transmission standard has the potential to increase the attractiveness 
of ancillary and supplementary services and correspondingly the 
prevalence of spectrum leases to third parties (including other 
broadcasters) that can provide such services. As an IP-based standard 
designed for compatibility with wireless broadband networks, ATSC 3.0 
broadcast signals can connect to 5G wireless networks to provide 
enhanced consumer experiences in ways that ATSC 1.0 cannot. Wireless 
networks are becoming more dynamic, relying on various spectrum bands 
for inbound and outbound data paths. Though ATSC 3.0 transmissions 
presently lack a return path, the technology is well positioned to 
support a host of next-generation applications, both on its own or as 
part of a hybrid wireless network. For example, third parties may wish 
to lease excess broadcast spectrum for such uses as supporting 
autonomous vehicle operation through system updates; pre-positioning 
popular content (e.g., movies or video games) to help reduce network 
congestion; distributing educational or job certification materials; 
providing supplemental information to telemedicine patients; issuing 
advanced emergency alerts for first responders and the public; and 
providing operational support for IoT devices and smart meters. We 
expect that these types of next-generation services will come to define 
Americans' lives over the coming years and decades, and broadcast 
spectrum will be in a position to support their growth and 
proliferation. Furthermore, an ATSC 3.0 signal can offer broadband-
speed downloads, which may help reduce consumer costs for internet 
services, and its propagation characteristics make it well suited for 
underserved rural communities. In addition, the nature of ATSC 3.0 
transmissions, as compared to ATSC 1.0, could lead to novel and 
creative leasing arrangements that could involve multiple, short-term 
spectrum users, arrangements that were not feasible when the Commission 
last issued guidance on these issues more than twenty years ago.
    In issuing this declaratory ruling, we seek to clarify the 
regulatory treatment of such leasing arrangements and to remove any 
uncertainty that might chill the introduction of new and innovative 
services under ATSC 3.0. Specifically, we clarify that the lease of 
excess broadcast television spectrum to a third party, including 
another broadcaster, for the provision of ancillary and supplementary 
services does not result in attribution under our broadcast television 
station ownership rules or for any other requirements related to 
television station attribution (e.g., filing ownership reports). That 
is, our attribution rules do not confer a ``cognizable interest'' 
solely by the existence of a lease agreement to provide ancillary and 
supplementary services over the station's spectrum. The Commission's 
broadcast television station attribution rules seek to identify 
interests that confer influence or control such that those interests 
should be counted for purposes of the media ownership limits. Influence 
or control over programming, personnel, and finances is considered in 
making an attribution determination. The Commission's media ownership 
limits are intended to promote viewpoint diversity, localism, and 
competition in broadcast services, yet ancillary and supplementary 
services are defined to exclude broadcast services. We thus find no 
basis to deem a lease pertaining to such non-broadcast services as 
implicating our media ownership limits. Similarly, the Commission 
stated in its order authorizing the voluntary use of the ATSC 3.0 
transmission standard that it would not apply the broadcast ownership 
rules in any situation where airing an ATSC 3.0 signal or an ATSC 1.0 
simulcast on a temporary host station's facility would have otherwise 
resulted in a potential violation of those rules. Pursuant to that 
order, such temporary simulcasting arrangements do not constitute a 
cognizable interest under our attribution rules.
    This ruling applies regardless of whether the station is 
broadcasting in ATSC 1.0 or 3.0 and only in those circumstances where 
the lessee uses the spectrum for services that qualify as

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ancillary and supplementary under Sec.  73.624(c) of the Commission's 
rules, which is the limited focus of our action today. Consistent with 
our rules, licensees entering into such leases still bear the 
responsibility to retain ultimate control over their spectrum and to 
ensure compliance with our broadcast regulations. Also consistent with 
existing Commission rules and policies, the term of any spectrum lease 
should be for no greater than the duration of the station's broadcast 
license, with renewal of the leasing arrangement permitted. 
Furthermore, the broadcaster must continue to provide at least one 
over-the-air video program signal at no charge to viewers in accordance 
with Sec.  73.624(b) of the Commission's rules and remain in compliance 
with all other applicable Commission rules. By extension, the 
broadcaster is responsible for any misuse of its spectrum by a lessee 
in violation of applicable statutes or Commission rules.
    By this declaratory ruling, we seek to provide additional clarity 
in order to encourage the investment in and deployment of potentially 
beneficial Broadcast internet services and to eliminate any possibility 
of unnecessary regulatory obstructions, either real or perceived. The 
Commission's rules for ancillary and supplementary services were 
intended to afford broadcasters the flexibility to use spectrum 
capacity in entrepreneurial and innovative ways. In recognizing ``the 
benefit of permitting broadcasters the opportunity to develop 
additional revenue streams from innovative digital services,'' the 
Commission has chosen ``to impose few restrictions on broadcasters and 
to allow them to make decisions that will further their ability to 
respond to the marketplace.'' As the industry transitions to a next-
generation broadcast television standard, we seek to ensure that our 
rules help facilitate innovative arrangements that can result in the 
efficient use of spectrum. In doing so, it is our hope that the 
marketplace, not rules designed for different services, will ultimately 
decide which Broadcast internet services are developed and supported.
    Congressional Review Act. The Commission has determined, and the 
Administrator of the Office of Information and Regulatory Affairs, 
Office of Management and Budget, concurs that, this rule is ``non-
major'' under the Congressional Review Act, 5 U.S.C. 804(2). The 
Commission will send a copy of the Declaratory Ruling to Congress and 
the Government Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A).
    It is ordered that, pursuant to sections 1, 4(i), 4(j), 303(r), and 
336 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 
154(i), 154(j), 303(r), and 336, and section 1.2 of the Commission's 
Rules, 47 CFR 1.2, this Declaratory Ruling in MB Docket No. 20-145 is 
adopted. It is further ordered that, pursuant to Sec.  1.103 of the 
Commission's rules, 47 CFR 1.103, this Declaratory Ruling shall be 
effective upon release. It is further ordered that the Commission shall 
send a copy of the Declaratory Ruling in a report to be sent to 
Congress and the Government Accountability Office pursuant to the 
Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).


Federal Communications Commission.

Marlene Dortch,
Secretary.
[FR Doc. 2020-13202 Filed 7-15-20; 8:45 am]
BILLING CODE 6712-01-P