$//MO&O Denying request by Apollo CAVS, DA 95-16//$ $/300.534 Carriage of local commercial television signals/$ $/76.61 Disputes concerning carriage/$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, DC 20554 DA-95-16 In re: ) ) ) Apollo CableVision, Inc. ) CSR-4268-M Cerritos, California ) CA-1450 ) ) Request for Waiver ) MEMORANDUM OPINION AND ORDER Adopted: January 5, 1995 Released: By the Cable Services Bureau: INTRODUCTION 1. On June 2, 1994, a "Petition For Special Relief" was filed by Apollo CableVision, Inc. ("Apollo"), operator of a cable television system serving Cerritos, California. In response, an "Opposition To Petition For Special Relief" dated June 21, 1994, was submitted by GTE Service Corporation ("GTE"), to which Apollo responded on July 1, 1994. In addition, Fouce Amusement Enterprises, Inc., licensee of Television Broadcast Station KRCA (Ind., Channel 62), Riverside, California, filed an opposition on July 18, 1994. SUMMARY OF PLEADINGS 2. In its petition, Apollo argues that it is presently precluded from adding KRCA to its system since it only programs 36 of the system's 78 video channels, plus 2 additional signals on the system's FM spectrum. Three of the remaining channels are programmed by the City of Cerritos, according to Apollo, and 39 channels are programmed by GTE California Incorporated, through its affiliate, GTE Service Corporation. Moreover, Apollo notes that all of its 36 channels have been fully occupied since 1988, and that its anticipated utilization of the system's other 39 channels has been stymied by pending civil and administrative proceedings, which Apollo hopes will soon be concluded, thus enabling it to add both certain commercial television stations (including KRCA), as well as other channel services. Therefore, Apollo requests a temporary waiver of the Commission's must-carry rules, until December 31, 1994, with the opportunity to request a further extension of that period for good cause, should the pending matters now preventing its compliance with KRCA's carriage request still not be resolved. 3. In its opposition, GTE argues that Apollo should be required to add KRCA to its existing 39 channel system since, in fact, it has no automatic right to program the 39 channels presently used by GTE Service Corporation; it only has a "right to first refusal" of those channels in the event that "bandwidth capacity in excess of 275 MHz should become available." According to GTE, Apollo is attempting to acquire immediate use of these channels at an unreasonable price in pending litigation, but "Service Corporation has indicated absolutely no intention to divest itself of its right to these channels. Thus, under any interpretation, these channels are not 'available' within the meaning of Apollo's contractual 'right of first refusal.'" 4. In reply, Apollo notes that GTE does not contest the fact that its present channel capacity is fully utilized or that the pending litigation has prevented it from adding any additional signals, including KRCA's. Apollo asks that the Commission strike GTE's opposition, which it characterizes as procedurally inappropriate and substantively inconsequential. In addition, Apollo cites a letter dated June 29, 1993, to it from GTE Telephone noting that the FCC waiver would terminate in July 1994, and offering Apollo the right of first refusal then since ". . .275 MHz of broadband capacity. . .will become available. . . ." 5. In its opposition, KRCA notes that Apollo's must-carry obligation does not depend upon it having vacant activated channels, citing the Report and Order in MM Dockets No. 92-259, 90-4, and 92-295, 8 FCC Rcd 2965, 2988 (1993), in which the Commission stated: "Congress created a clear statutory right of carriage and channel position that applies prospectively notwithstanding the existence of prior agreements between cable operators and cable programming services." (footnote omitted) Moreover, according to KRCA, Apollo is now obligated to retransmit 14 commercial must-carry stations, and it will be obligated to carry up to 26 such stations, if it receives permission to program the other 39 channels on the Cerritos system. Finally, KRCA cites its prior "Complaint," which was filed with the Commission May 31, 1994, and states that Apollo should have no additional extensions of time to comply with its mandatory carriage obligations. DISCUSSION 6. As we noted in the companion case to this decision, previously referenced by KRCA, when the Commission adopted its Report and Order in MM Dockets No. 92-259, 90-4, and 92-295, 8 FCC Rcd 2965, 2972 (1993), it specifically addressed the issue of inadequate activated channel capacity and noted: "(i.e.: a cable operator without a sufficient number of available channels may be required to drop a non-must-carry station or cable programming service to fulfill its must-carry obligations)." In addition, Section 76.56(b)(2) of the Commission's Rules, requires that cable systems with more than 12 useable activated channels devote up to 1/3 of them to retransmission of local commercial television broadcast signals. In n. 78 to its Report and Order, 8 FCC Rcd at 2972, the Commission explained that systems are allowed to round to the nearest whole number to determine how many channels must be devoted to the transmission of local commercial signals, in addition to any noncommercial signals that systems must also transmit. According to Apollo, it has a 39 channel system, including the 3 channels which it says are reserved for the exclusive use of the City of Cerritos. Therefore, as KRCA notes, the Commission's Rules require that up to 13 of Apollo's channels must be devoted to the transmission of local commercial signals, although KRCA's unrefuted allegation is that Apollo currently carries fewer than 12 local commercial signals. Consequently, we conclude that Apollo is not currently utilizing the required 1/3 of its capacity for the carriage of must-carry stations. Also, as noted above, the fact that Apollo may have to drop television broadcast stations or satellite-delivered programming services that do not have mandatory carriage rights is not grounds to deny KRCA its right to mandatory carriage. ORDERING CLAUSES 7. In view of the foregoing, we find that grant of Apollo's request is not in the public interest. 8. Accordingly, IT IS ORDERED, That the "Petition For Special Relief" (CSR- 4268-M), filed June 2, 1994, by Apollo CableVision, Inc. IS DENIED in accordance with Section 614(d)(3) (47 U.S.C. 534) of the Communications Act of 1934, as amended. This action is taken pursuant to authority delegated by Section 0.321 of the Commission's Rules. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau