NCTA: FCC's Mandatory Carriage of ATSC 3.0 Would Violate the Constitution

U.S. Cable Industry Pushes Back Against Next-Gen Broadcast Standard Transition Policy

"1997 Supreme Court Ruling's Foundation Has Collapsed... Must Carry Is Anachronistic in the Online Era"

NCTA – The Internet & Television Association, representing the U.S. cable and internet industry, has strongly opposed the FCC's attempt to extend mandatory carriage (must carry) requirements to ATSC 3.0 (NexGen TV) signals, arguing it would violate the Constitution. NCTA contends that in today's video marketplace, must carry requirements can no longer be constitutionally justified, and extending them to ATSC 3.0 would clearly violate both the First Amendment (freedom of speech) and Fifth Amendment (property rights protection).

I. NCTA's Core Argument: The Constitutional Foundation for Must Carry Has Collapsed

In its January 20 filing with the FCC (GN Docket No. 16-142), NCTA stated that "must carry requirements for 3.0 signals would impose substantial burdens on cable operators that would violate the First and Fifth Amendments."

This filing responds to the FCC's Fifth Further Notice of Proposed Rulemaking released on October 29, 2025, directly rebutting broadcasters' requests for mandatory carriage rights for their ATSC 3.0 signals.

First Amendment Violation Arguments

Under current law, cable operators must set aside up to one-third of their channel capacity for local TV stations that demand carriage without compensation. This must carry requirement was upheld as constitutional by the Supreme Court in Turner Broadcasting System, Inc. v. FCC (1997).

However, NCTA argues that the Supreme Court's decision was based on "a record of tens of thousands of pages of evidence" reflecting market conditions of that era, when cable operators possessed "bottleneck" control over video programming delivered to households.

NCTA's lawyers stated in their filing: "As the Commission itself has recognized, the video marketplace has changed dramatically since that 1997 decision. The government's interest in preserving local broadcast television can be achieved in a plethora of other, less burdensome ways, and no government intervention is necessary to ensure that each household has access to a broad diversity of video programming given the massive shift to online distribution."

They continued: "Accordingly, the must carry statute and rules can no longer be squared with the First Amendment. Extending the must carry rules to ATSC 3.0 signals would be even more unjustifiable in the current video marketplace."

NCTA also explained the specific ways must carry requirements infringe on cable operators' First Amendment rights: First, they force cable operators to carry programming they would not otherwise choose to carry absent the government mandate. Second, they require mandatory placement of must carry stations on the basic tier. Third, they place cable operators at a competitive disadvantage against online video programming distributors who face no similar regulatory burdens.

Fifth Amendment Violation Arguments

NCTA argues that extending must carry requirements would also violate the Fifth Amendment's Takings Clause. The Supreme Court has held that "even minute intrusions into property rights can be a per se taking."

NCTA's logic is that requiring cable operators to dedicate scarce channel capacity for uncompensated retransmission of third-party content could constitute a "regulatory taking."

NCTA stated: "Requiring cable operators to incur additional substantial costs to upgrade their equipment to meet new carriage obligations would have significant economic impacts on regulated cable operators and interfere with their investment-backed expectations."

The problem becomes even more severe because ATSC 3.0 signals may require more bandwidth than existing 1.0 signals. If MVPDs must simultaneously carry both 3.0 streams with enhanced audio/video features and down-converted streams for the majority of subscribers whose set-top boxes don't support those features, the constitutional issues would be further exacerbated.

NCTA cited the 1982 Loretto v. Teleprompter Manhattan CATV Corp. ruling and the 2021 Cedar Point Nursery v. Hassid ruling, emphasizing that "the essential question" for determining a physical taking is whether the government has physically taken property for itself or someone else by whatever means.

II. The Reality of ATSC 3.0 Transition: Consumer Readiness Is Still Far Off

NCTA presented detailed data showing that the ATSC 3.0 transition is still in its early stages and consumer adoption remains very limited.

Low Consumer Adoption Rates

According to the filing, only 15 million ATSC 3.0-equipped TVs have been sold to date, constituting a mere 4.8 to 5.2% of TVs currently in use in the United States. Of the TVs shipped to U.S. retailers in 2024, only 4.5 million (10%) were ATSC 3.0 compatible, and this is expected to remain at around 5 million units in 2025.

An even more serious problem is that TVs equipped with ATSC 3.0 tuners are typically found only in high-end products costing over $1,000. The lowest-priced converter box costs $90, significantly limiting accessibility for average consumers. While PearlTV recently announced a program to supply lower-cost converter boxes, the timing and actual prices remain unclear.

NCTA emphasized: "At a time when American consumers are frustrated with rising costs in the economy, the Commission should not take any steps that will drive up the cost of viewing broadcast television."

Validity of the 2023 FCC Conclusion

NCTA reminded that just two years ago, in 2023, the FCC concluded that "broadcasters' market incentives alone cannot be relied upon to ensure that all 1.0 viewers are able to continue to access stations' primary programming without incurring significant costs."

In fact, broadcast station groups have publicly stated that a primary goal of the ATSC 3.0 transition is to generate revenue by repurposing broadcast spectrum for non-broadcast services. According to Nexstar Media Group's June 2025 investor presentation, BIA Kelsey estimates that ATSC 3.0 could generate up to $15 billion in annual revenues for the industry, rivaling the industry's retransmission revenues in size.

This demonstrates that broadcasters have incentives to transition to 3.0 regardless of consumer readiness, explaining why government consumer protection regulations remain necessary.

Comparison with the DTV Transition

NCTA compared the current situation to when the FCC eliminated the simulcasting mandate during the Congressionally-mandated DTV (Digital TV) transition. At that time, the FCC emphasized the advanced state of the transition, citing the following:

First, 1,658 TV stations in all markets (approximately 96% of all stations) had been granted a DTV construction permit or license, and 1,423 stations were already broadcasting a digital signal. Second, in the top 30 TV markets, all 119 network-affiliated TV stations were on the air in digital. Third, manufacturers offered more than 400 models of HDTV monitors and integrated sets.

NCTA pointed out that "the ATSC 3.0 transition has not achieved anywhere near this degree of progress," strongly urging the maintenance of simulcasting and substantially similar requirements.

III. Substantial Technical and Financial Burdens Facing MVPDs

NCTA detailed various technical challenges and financial burdens associated with MVPD distribution of ATSC 3.0 signals.

Compatibility Issues and Cost Burdens

ATSC 3.0 is not backwards compatible with existing TVs and MVPD systems due to design choices the broadcast industry made in developing the standard. None of NCTA's cable operator members will be able to carry 3.0 signals without first making costly changes to their networks.

Expected cost items include:

• Purchase and installation of new transcoders, receivers, demultiplexers, and demodulators
• Engineering studies
• Patent royalties
• Labor costs

One NCTA member estimates that purchasing and installing new 3.0 transceivers alone will likely cost tens of millions of dollars. These costs will ultimately be passed on to consumers through rate increases.

Signal Quality Issues

NCTA pointed out that providing a certain signal strength is not sufficient to ensure a good quality signal. In fact, some cable operators are already unable to reliably demodulate some ATSC 1.0 signals that meet current FCC standards.

If a signal is incorrectly encoded, MVPDs cannot decode it for redistribution regardless of signal strength. The encryption that ATSC 3.0 enables creates additional complexity and costs, as MVPDs need not only access to decryption keys but also sufficient information via the signal to properly decrypt programming.

Watermark Issues

Broadcasters transmitting in ATSC 3.0 may use watermarks to enable certain additional content and features, including applications and audio content delivered via NextGen TV receivers. These watermarks could be passed through to MVPD subscribers without the MVPD's involvement or knowledge, allowing broadcasters to automatically launch supplemental content or features for MVPD subscribers who own NextGen TVs.

NCTA warned this could confuse MVPD subscribers. Supplemental content and features delivered this way could conflict with consumer's choices made via the MVPD set-top box (such as preferred language, audio, captioning, and accessibility settings). Consumers using MVPD services will likely believe that supplemental content is generated by the MVPD set-top box and controlled by the set-top box remote, when in fact it is generated by the NextGen TV receiver and controlled by the NextGen TV remote.

IV. Public Interest and Legal Requirements: Broadcasters' Use of Spectrum

NCTA urged the FCC to ensure that broadcasters' use of spectrum serves the public interest and meets statutory requirements concerning ancillary and supplementary services.

Auctions have been the preferred method for assigning exclusive rights to commercial spectrum for over three decades. Nevertheless, Congress in the 1996 Act allowed the FCC to grant broadcast stations exclusive licenses for advanced television services without an auction to further the goal of enabling advanced free, over-the-air television services.

However, the record shows that some broadcasters plan to use ATSC 3.0 technologies to deliver non-broadcast services over broadcast spectrum. NCTA argued that the FCC should prohibit broadcast stations from using retransmission consent to negotiate for carriage of "Broadcast Internet" services provided by a consortium of non-commonly owned broadcast stations.

V. Additional Measures Needed to Contain Anti-Competitive Harm

Patent Issues: Need for RAND Licensing Requirements

NCTA argued that the FCC should affirmatively require that ATSC 3.0 standard-related patents be licensed on reasonable and non-discriminatory (RAND) terms. Several ATSC 3.0 Standard Essential Patents (SEPs) are held by private companies.

Of significant concern, there has already been patent infringement litigation involving alleged ATSC 3.0 functionality where the jury awarded the patentee an ongoing royalty of $6.75 per television for four patents. This is exorbitantly higher than the rates for existing ATSC 3.0 patent pools (Avanci: $2-$3; Via Licensing Alliance: under $3 per unit).

Constellation's excessive royalty award prompted LG to suspend inclusion of ATSC 3.0 compatibility in its TVs for the U.S. market. The case (Constellation Designs v. LG Electronics) is currently on appeal at the Federal Circuit Court of Appeals (No. 24-1822).

Consumer Privacy Protection

ATSC 3.0 offers the possibility of new interactive and personalized services to consumers, which may require the collection of user data including personally identifiable information through home internet connections to customize content and enhance viewing experiences. Collectible information may include viewing patterns, viewing duration, time of day, device ID, location information, and other data.

NCTA emphasized that consumers deserve consistency, control, and confidence regarding the handling of their personal information. Since broadcast stations will initiate the collection, processing, usage, and storage of this information, it is appropriate and fair for broadcasters to be responsible for protecting the privacy of this information.

VI. Opposition to Mandatory Transition Timeline

NCTA also strongly opposed requests from some broadcast station owners to mandate a transition to 3.0 by a certain date.

NCTA stated: "Such a highly regulatory approach would be contrary to the deregulatory goals of the Trump Administration and the Commission." A forced transition would impose substantial new regulatory costs on consumers, MVPDs, and equipment manufacturers, all without any guarantee of meaningful benefit and in the absence of proven marketplace demand for ATSC 3.0 features or services.

Interestingly, NCTA pointed out that while broadcasters claim the transition is necessary to provide superior video quality, in the absence of any FCC requirement on picture quality, broadcasters insist on having the flexibility to transmit their 3.0 signals only in standard definition (SD) format—a 30-year-old picture quality standard designed to be comparable to analog TV. Accordingly, if the FCC proceeds with a mandatory transition, it should require broadcasters to transmit their 3.0 feeds over the air in at least HD.

VII. Conclusion and Implications

This NCTA filing reveals the fundamental conflict of interests between the cable/satellite industry and broadcast industry surrounding the next-generation transition in U.S. broadcasting.

Broadcasters are seeking to secure new revenue streams through ATSC 3.0—including 4K/HDR quality, interactive features, and targeted advertising—and are pushing to extend existing must carry requirements to 3.0 signals and mandate a transition by a specific date.

The cable/satellite industry, on the other hand, argues that such a transition would impose massive cost burdens and lacks constitutional justification in today's market environment. They emphasize that with the rapid growth of online streaming, cable operators no longer control the "bottleneck" of video distribution, arguing that the premise of the 1997 Supreme Court ruling has collapsed.

The FCC faces the difficult task of balancing these conflicting positions while pursuing various policy objectives including consumer protection, promotion of technological innovation, and ensuring fair competition.

This matter also provides implications for broadcasting and telecommunications policy in other countries facing similar issues such as next-generation broadcast standard adoption, retransmission disputes between terrestrial and pay-TV operators, and platform regulation.

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