Conclusion and Recommendations

The transition to ATSC 3.0 has the potential to promote competition if necessary protections are put in place. Sinclair and ONE Media’s role as patent holder of this new technology is not on its own harmful. However, the FCC should be wary that this lack of oversight will likely enable Sinclair to dominate the market. Given the uncertainty of RAND licensing enforcement, the agency should explicitly require that the company, and any other party with crucial patents, license its patents on reasonable and nondiscriminatory terms to ensure the broadcaster is not able to charge anticompetitive royalty rates to any other competitor also using the Next Generation TV broadcast standard. The Commission should also make it clear that it will enforce these requirements to deter any anti-competitive behavior from patent holders such as Sinclair. An FCC requirement to do so would provide safeguards against anticompetitive harms to competitors and consumers.

Sinclair should not be able to “double-dip” in the ATSC 3.0 market by using and benefitting from the technology itself while also price-gouging its rivals in the space. Reinforcing fair licensing requirements will foster strong competition in the TV marketplace, mitigate the threat of unreasonably high royalty fees that would result in inflated consumer costs, and continue to allow Sinclair and other broadcasters to benefit from ATSC 3.0 and the promising innovations that could come with it.

Furthermore, if Sinclair’s acquisition of Tribune is approved, creating a true broadcasting giant, the company would have even more ground to control the broadcasting market through ATSC 3.0 patent royalties as well as retransmission consent fees. The FCC should require Sinclair to RAND licensing with outside parties as a condition of the merger if it chooses to approve the deal.