In a surprising bit of news LG, a major TV manufacturer and co-developer of the ATSC 3 standard, announced its decision to discontinue support for ATSC 3 on their upcoming televisions. This surprising move is a direct result of a patent lawsuit, and the implications of this decision are significant for the adoption of the new standard. I cover the news in my latest video.
The news was first reported by Cord Cutters News, a trusted source for updates related to cord-cutting. LG also provided a detailed explanation regarding their decision in a recent FCC filing.
At the heart of the patent lawsuit is the A/322 physical layer standard, which is integral to receiving the ATSC 3 broadcast signal. A company named Constellation Designs asserted they had the patent for a portion of this standard. Despite LG’s disagreement with this claim, a Texas jury ruled against them. Consequently, LG is now obligated to pay $6.75 for every television they’ve sold bearing the NextGenTV logo to Constellation Designs LLC.
The judgment against LG was a paltry $1.6 million, and doing the math this equates to only about 250,000 televisions sold with ATSC 3 tuners installed. This does not bode well for the millions of installed tuners broadcasters will need in order to convince the FCC to allow a transition to the new standard – especially as a major manufacturer is now pulling support for the time being.
The ATSC 3 standard is a complex web of patents from a multitude of companies. To streamline the management of these patents, there are established patent pools that offer licenses at standardized rates that cost manufacturers around $3 per tuner. However, participation in these pools is not mandatory, leading to potential conflicts like the one LG encountered.
There’s a growing concern that other manufacturers utilizing this technology might find themselves embroiled in similar legal battles with Constellation Designs who now likely smells blood in the water. In their FCC filing LG expressed concern that other patent holders may also try and sue and extract more revenue from television makers.
So what’s next? Broadcasters were no doubt anticipating that beginning in 2024 more new televisions would have ATSC 3 capability built in. With LG pulling out, will Samsung, Sony and others do the same? Will the companies attempt to buy out Constellation Designs? Will the FCC step in to try and smooth things out? And can they even make an impact?
This television drama will continue. As they say, stay tuned!