WPCB 2EB(UEV3|P)Courier New (TT)Times New Roman (TT)P6QP#Courier New (TT)Times New Roman (TT)Times New Roman (Bold) (TT)ofxooof7.7a]7]f]f]7ff..].ffffA]7f]]]SA/Aa.7777CE7\fx]x]x]x]x]x]o]o]o]o]........xfffffxfxfxfxfo]x]xfffo]xfofx]x]x]x]x]x]o]o]o]ffffxfxfCf7f77.f]x]f.fExfxffxAxEo]o]N:.]]7f]]]]]>=]7{{]7..SS]77]].S77t7\[[\aee*C`a.wR]]n[Cfx`xWlRx[][ceIfIs`Wx[rriwge}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}.7O]]x(77Aa.7..]]]]]]]]]]77aaafxxxxofx.]xfxoxofxooof7.7a]7]f]f]7ff..].ffffA]7f]]]SA/Aa}}}.]S]]7o7}}}}..SS:]7]7}}o.7]]]]/]7{>]a7{\C\777`].77=]fxxxxxxxoooo....xxaxxxxoof]]]]]]]]]]]....fffffff\fffff]f>'P8.XP2p NQP2s ;w) ZX yO-#C\  P6QP#Arial (Bold) (TT)Times New Roman (TT)HP LaserJet 4/4MtScript ROOM 224HPLAS4.WRSSx  @,,PX@xxf7.7NS7JSJSJ7SS..S.SSSS7A.SSxSSJP!PZ*7777CE7SSxJxJxJxJxJooJfJfJfJfJ7.7.7.7.xSxSxSxSxSxSxSxSxSxSxJxSxSxSxSxS]SxSxJxJoJoJoJfJfJfJxSxSxxSxSxSxSCS7S777SAxSf.fExSxSxSxo7oE]A]AN:*LS7JSSSSS.4}}S2S}277JJS77SS7J72t7[[[[^ee*C`^.wRSSn[Cfx`xWlRx[][ceIfIs`Wx[rriwge*7DSS77S^*7*.SSSSSSSSSS..^^^Jxooxf]xx7Axfxx]xo]fxxxxf7.7NS7JSJSJ7SS..S.SSSS7A.SSxSSJP!PZ7SJSS7]777JJ:S7A7xx*7SSSS!S7.S^7SC[227`L*724S}}}Jxxxxxxoffff7777xxxxxxx^xxxxxx]SJJJJJJoJJJJJ....SSSSSSS[SSSSSSS?xxxX/Xx6X@DQX@7PC2X DXP\  P6QXP.7UC2X(xXU4  pQX@2  W W >f 3|w Y-#Xw PE37 DXP#X@ Y-#Xw PE37=9XP#CourierCG TimesCG Times BoldCG Times ItalicCourier Italic2*@ @2f $"5@^2CRdd$CCdq2C28dddddddddd88qqqYzoCNzoozzC8C^dCYdYdYCdd88d8ddddCN8ddddY`(`l2CC!CCPRCddYYYYYYzYzYzYzYC8C8C8C8ddddddddddYdddddoddYYYYYzYzYzYddddddPdCdCCCdNdz8zRdddCRoNoNNF2[dCYddddd7>d<d<CCYYdCCddCYCdYzzzzCCCCqodYYYYYYYYYYY8888dddddddnddddddd'A , "5@^2Coddȧ8CCdr2C28ddddddddddCCrrrdzNdzoȐC8CtdCdoYoYCdo8Co8odooYNCodddYO,Oh2CC!CCPRCdodddddȐYYYYYN8N8N8N8oddddooooddoddddzodddYYYYYYddddooPoNoNCNodo8RoodȐYYoNoNNF2ldCdddddd><q*"xxxxWWxxxWWkkxxxA.SSxSSJJSJS+SSSSS8SSSSSSSSS.xJxJxJxJxJorJiJiJiJiJ8.8.8.8.{SxSxSxSxS{S{S{S{SxSxJ{SxSxSxS{S`SxIxSxIqIqIrSrS{dgIiSiSgIxSxSxSxSxS{S{S8.SSSS8Sz]SSuSg/gFX@# On March 11, 1993, the  Y -Commission adopted a Report and Order to implement the mandatory broadcast signal  Y-carriage ("mustcarry") provisions of the Cable Act.  YB-ԍ#Xw PE37=9XP# Report and Order in MM Docket 92259 (Broadcast Signal Carriage Issues), 8  Y--FCC Rcd 2965 (1993). See also, Memorandum Report and Order in MM Docket No. 92259, (Broadcast Signal Carriage Issues), FCC 94251 (released November 4, 1994).  ?#x6X@`7>FX@#ѥ Pursuant to the rules adopted in the  Y|-Report and Order, cable systems were required to commence carriage of local broadcast  Yg-stations entitled to mustcarry status beginning June 2, 1993. gM  Ye-ԍ #Xw PE37=9XP#47 C.F.R.  76.56(a),(b).#x6X@`7>FX@#ѓ By June 17, 1993 local broadcast stations were required to make their initial election of either mustcarry or  Y9-retransmission consent status and notify cable systems of their election. 9  Y-ԍ#Xw PE37=9XP# 47 C.F.R.  76.64(f)(1).#x6X@`7>FX@#ђ Those broadcast stations which elected mustcarry status were required to notify the cable system of their  Y -preferred channel position at that time.   Yk#-ԍ #Xw PE37=9XP#47 C.F.R.  76.57(d).#x6X@`7>FX@#я Cable systems were required to commence carriage of noncommercial stations on December 4, 1992, the effective date of the 1992 Cable Act. Unlike their commercial counterparts, noncommercial stations are required to affirmatively demand carriage. "` 0*(("Ԍ 12. The 1992 Cable Act, however, did not immediately grant signal carriage rights to commercial television stations "predominantly utilized for the transmission of sales  Y-presentations or program length commercials" ("home shopping stations"). YK-ԍ#Xw PE37=9XP# See 47 U.S.C. 534(g).#c PE37P#ї Rather, Congress instructed the Commission to commence a rulemaking to determine if the mandatory carriage of home shopping station signals served the public interest, convenience,  Y-and necessity.{ Y-ԍ#Xw PE37=9XP# See 47 U.S.C. 534(g)(2).#c PE37P#њ On July 2, 1993, the Commission adopted the Home Shopping Station  Yx-Report and Order holding that home shopping stations are operating in the public interest and  Yc-are qualified as local commercial television stations for the purposes of cable carriage.c. YB -ԍ#c PE37P##Xw PE37=9XP# See Home Shopping Station Issues, 8 FCC Rcd 5321 (1993), reconsideration  Y- -pending.#c PE37P# This order required affected television stations to assert their must carry rights within 30  Y5-days after publication of the rules in the Federal Register, which occurred on July 22, 1993. 13. The Cable Act and our rules offer three channel options available to a commercial broadcast station electing mustcarry: 1) a station may elect to be carried on its overtheair channel; or 2) on the channel on which it was carried on July 19, 1985; or 3) on the channel  Y -on which it was carried on January 1, 1992.  Y?-ԍ#Xw PE37=9XP# 47 U.S.C.  534(b)(6); 47 C.F.R.  76.57(a).#x6X@`7>FX@#ѩ For a noncommercial broadcast station, the Cable Act and our rules offer two channel options: 1) its overtheair channel or 2) the  Y-channel on which it was carried on July 19, 1985.} Y-ԍ#Xw PE37=9XP# 47 U.S.C.  535(g)(5); 47 C.F.R.  76.57(b).#x6X@`7>FX@#Ѫ The statute and our rules also provide that a broadcast station may be carried "on such other channel as is mutually agreed upon by  Yf-the station and the cable operator."f.  YE-ԍ#Xw PE37=9XP# 47 U.S.C.  534(b)(6) and 535(g)(5); 47 C.F.R.  76.57(c).#x6X@`7>FX@#ѻ 14. While we read the 1992 Cable Act and the Commission's Rules to unambiguously state that there are two optionsnot threeavailable to a noncommercial broadcasters, the language of the statute also specifically allows cable operators and noncommercial broadcasters to mutually agree upon a different channel. This mechanism allows the two to negotiate a channel positioning option outside of the two proposed by the 1992 Cable Act's  Y- 2VS   Y-  Y-" 0*(("Ԍ Y- 2VS provisions. Yy-ԍ#Xw PE37=9XP# See Report and Order, 8 FCC Rcd. at 2986 ("The election of which of these three alternatives is left up to the station involved.") We also note that the 1992 Cable Act provides three channel positioning options for each commercial station and two for each NCE station, and also provides an opportunity for parties to develop their own solutions to  Y-conflicting claims. Id. at 2988.#x6X@`7>FX@# It is simply a way of saying that the parties have the flexibility to reach a result  Y-different from the two statutory options.lx! Y-ԍ#Xw PE37=9XP# It does not, however, mean that in the event the two options are not available the  Y -parties must agree on the ultimate placement of the channel. To read this flexibility as a mandatory third option would totally obviate the prior two options as broadcasters would clash with other broadcasters in seeking what they viewed as a more favorable channel position, leaving the cable operator in the position of having to choose between competing  YJ -broadcasters.#c PE37P#l 15. We therefore agree with Paragon and TCPT that the channel positioning agreement reached between the parties is valid and enforceable. We believe that mutual agreements between cable operators and commercial or noncommercial television stations have as much weight as the other channel positioning options under the 1992 Cable Act and our rules. Once an agreement is consummated, the channel positioning rights vest in the broadcast station. In this case, once KTCI acceded to channel 13 as its channel position by mutual agreement between itself and Paragon, the station can claim it to the exclusion of others. 16. We also believe that a broadcast station which first asserts a valid claim to a channel position has a legal priority over all stations subsequently requesting that same channel position. While we declined to adopt a formal priority structure for resolving conflicting  Y -channel positioning claims in our Report and Order, we did discuss a comparable firstin Y -time rule in our July 15, 1993, Clarification Order with regard to "default" must carry  Y-stations (i.e. those stations which did not affirmatively elect must carry status).a  Y-ԍ#Xw PE37=9XP# See 8 FCC Rcd 5083 (1993).#c PE37P#ј In that  Y}-Order we determined that, in the event of a conflict, stations making affirmative carriage elections have channel positioning priority over default stations because those making an  YQ-election were first to take action to enforce their rights.Q Y!-ԍ#Xw PE37=9XP# Id. at 5084. See also 47 C.F.R. 76.56(b)(7) and 76.57(e).#c PE37P#  Y#- 17. Here, we extend the logic of the Clarification Order to encompass situations where a qualified television broadcast station affirmatively asserts its channel positioning rights prior to other nonqualified television broadcast stations. On April 20, 1993, KTCI elected carriage on Paragon's cable systems and agreed to be positioned on channel 13. Subsequently, on May 12 and June 13, 1993, KXLI "elected" carriage and also chose channel 13 as its preferred channel position. However, KXLI did not have any must carry"0*(("  Y-or channel positioning rights prior to our adoption of the Home Shopping Station Report and  Y-Order in July, 1993. Thus, its request for channel 13 in its May and June correspondence to Paragon had no force or effect. While it is true that Paragon was put on notice of KXLI's intentions, this point is inconsequential since KTCI, a qualified noncommercial television station, had acted first to enforce its carriage and channel positioning rights. 18. Similarly, we believe that Paragon has met its channel positioning obligations by placing KXLI on that station's remaining statutory choice. It is important to point out that  YL-KXLI is now carried by Paragon on channel 41, its overtheair channel assignment. This channel position is one of the three options provided to full power commercial television stations by the 1992 Cable Act and the Commission's rules. We note that this is not the kind of situation which Congress attempted to remedy through the grant of channel positioning  Y -rights.  Yi -ԍ#Xw PE37=9XP# Congress' bases for giving broadcasters channel positioning rights are discussed in the legislative history of the 1992 Cable Act. One reason given was to prevent channel positioning shifts "made solely to enhance the competitive position of the cable operator's  Y$-programming or its advertising availabilities." See S.Rep.No. 10292, 102d Cong., 1st Sess. at 44 (1991). Congress also codified channel positioning rights to prevent the economic  Y-failure of television stations, which in turn, would harm viewers. See H.R. Rep. No. 102628, 102d Cong., 2d Sess. at 55 (1992)("Local stations moved to a high channel number, often a location unexpected by their usual audience, may lose viewers and suffer a diminution of their capability of rendering program services in the public interest, a development that will harm all viewers, whether or not they subscribe to cable."). These concerns are inapplicable in this case because Paragon positioned KXLI on cable channel 41,  Yp-its overtheair channel, a location expected by the station's audience.#c PE37P# That is, there is no evidence that Paragon has wielded its market power to the detriment of KXLI and unfairly reshuffled the station to several different channel positions on the cable system to serve its own needs. KXLI cannot claim it is disadvantaged by being placed on a cable channel it could have chosen under the law.  Y}- 19. Finally, in our Report and Order, we recommended that cable operators and affected broadcast stations give serious consideration to the value of maintaining current channel  YQ-positions.Q  Y-ԍ#Xw PE37=9XP# See Report and Order, 8 FCC Rcd. at 2988.#c PE37P#ѧ We reasoned that maintaining the status quo would be the least disruptive  Y:-approach, particularly for subscribers.:3 Y"-ԍ#Xw PE37=9XP# See id.#c PE37P#х We believe that preserving the existing channel order on Paragon's several systems would be in the public interest because it reduces the possibility of any subscriber confusion. 20. In view of the above, the complaint filed KX Acquisition, L. P., licensee of KXLITV IS DENIED, in accordance with 614 of the Communications Act of 1934, as amended. " 0*(("  Y-See 47 U.S.C. 534. This action is taken pursuant to authority delegated by 0.321 of the Commission's rules, 47 C.F.R. 0.321. FEDERAL COMMUNICATIONS COMMISSION  2VS)   2VS)  William H. Johnson Deputy Chief, Cable Services Bureau