In this edition of BIA Advisory Service’s Vantage Points, we share insights from John Hane, President, Spectrum Co.

The Vantage Point series taps the perspectives of various lookout points from around the local media and tech sectors. The views expressed do not necessarily reflect that of BIA Advisory Services. Please contact Rick Ducey, Managing Director, BIA Advisory Services,  if you have insights to share. 

Interview with John Hane, President, Spectrum Co.

What is Spectrum Co. all about, and what does this consortium plan to accomplish with the roll-out of ATSC 3.0 over the next several years?

Spectrum Co is a platform for member television groups and stations to develop and operate significant new lines of business on their 6 MHz spectrum channels outside of the core OTA television service.   This has been a dream for many years, but by and large it hasn’t happened.  There were four main reasons for that :1) the overly rigid FCC operating rules, 2) the terribly inflexible ATSC 1.0 standard, 3) the lack of any scale players within broadcasting to do the development, sales and operational work, and4)  the immaturity of the data communications marketplace.  The wireless data marketplace has grown fantastically, but it’s just beginning to diversify, and growth will accelerate in the next few years.

ATSC 3.0 lets us work around the rigid FCC rules to increase both useable power and service footprint.  Consolidation solved part of the scale problem and Spectrum Co solves the rest.  And the wireless data marketplace is about to enter a transformational growth phase – and this time one size won’t fit all.  We’ll go from 300 million smartphones to tens of billions of devices, including IoT, automotive, and smart cities/smart transportation, aerial and others that rely on vast amounts of mobile data.

Spectrum Co is linking together hundreds of ATSC 3.0 stations to create a nationwide data network with unique capabilities and – unlike wireless carriers – no legacy businesses to protect.  Spectrum Co will operate separately from and outside of the core OTA business, with its own back end systems, engineering teams and sales force.  Even the largest groups can’t field the scale or expertise needed to enter such complex and fast-changing markets.  Spectrum Co allows broadcasters to pursue opportunities that otherwise are just theoretical.

Spectrum Co. is developing a transition plan to make it easier for stations and markets to get ATSC 3.0 up and running.  What are the challenges, and how is that going? 

The biggest challenge was finding a set of rules that can be applied in every market and will minimize costs while being fair to all participants and preserving most or all program streams.  It proved to be an extremely hard problem.  But we’ve come up with a plan that seems to be generally well liked by everyone who has reviewed it, and that includes probably the quorum of commercial stations.  We have one or two matters to work out but we will be rolling it out very very shortly.  I think you’ll start to see announcements for transition of a significant number of Spectrum Co markets very soon.

Incidentally, I’ve gotten dozens of calls from stations that are concerned they’ll be “left out” of a market transition.  Spectrum Co will not transition a market without inviting all technically compatible full power stations to transition with us.  One thing we’ve learned is that more is better – with few exceptions every station is better off when more stations participate.

Spectrum Co. is also doing its own Single Frequency Network development work with DISH and others. What is the significance of this project and what opportunities does it open up for TV broadcasters. Where does the project stand now?

We’re building a single frequency network in Dallas with participation from several broadcasters, American Tower, DISH and others.  We’re learning what’s involved in designing and deploying a true single frequency network (SFN) so that we can better plan future SFN deployments.  The SFN will provide a unique testbed for us to learn how we can best exploit our 6 MHz spectrum allocations.  We’re going to test a wide range of things from core TV enhancements to signal performance in a wide range of locations and conditions.  We’re going to study everything, from the basic network layers to new applications to see how they perform.  We’ll learn optimal modulation/coding combinations for different applications and services.  And we’ll be able to quantify the gains in capacity, coverage and robustness we realize from SFNs.

We’re going to invite other stakeholders, developers and prospective clients of Spectrum Co to come in and kick the tires – to see what our network will be able to do for them.  There’s simply no way to learn what we want to know by modeling – you have to bend metal.  In Dallas we’re doing that in a big way.

From a Spectrum Co. POV, what’s the vision for what ATSC 3.0 and U.S. broadcasting look like in 2023?

By 2023 the majority of US stations will be broadcasting in 3.0 and we’ll be on a short path to having just a small number of ATSC 1.0 lighthouse stations.  The majority of those will be participating in Spectrum Co.  Virtually all stations will have more net capacity than they have today.  Video services riding on 3.0 – including our enhanced core business but possibly including other video services – will be much more competitive than the services we offer today OTA, through MVPDs, or even via OTT.  We’ll have actual data customers spending significant sums to use our capacity, and they will be launching new businesses.

Our device ecosystem will be appreciable and growing in size and diversity – and I don’t mean just television receivers.  I mean all manner of devices.  We’ll have a development toolkit in widespread use by entrepreneurs who are looking for new ways to exploit our nationwide network.  We’ll have a clear roadmap for broadcasters – not tech behemoths – to exploit the broadcast “white spaces” very profitably to support broadcasters’ core mission of providing free, ubiquitous OTA television service.  If we want it, we’ll have a return path either in place or on the roadmap with specific spectrum identified.  Analysts – including wireless analysts – will give us credit for the new businesses we have developed – not only the cash flow, but also for the enormous upside we will be on the verge of realizing through SFNs and productive use of the white spaces.