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File pnmc5021 (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ***************************************************************** ******** $/76.59 Modification of television markets, DA-95-712//$ $/76.61 Disputes concerning carriage//$ $/300.534 Carriage of local commercial television signals//$ $///DA 95-712 4/4/95///$ ///newjob/// Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 DA-95-712 In re: ) ) Kansas City Cable Partners d/b/a ) CSR-4109-A American Cablevision of Kansas City ) Kansas City, Missouri,et al. ) ) For Modification of the Kansas City,) Missouri ADI ) MEMORANDUM OPINION AND ORDER Adopted: March 29, 1995 Released:April 5, 1995 By the Cable Services Bureau: INTRODUCTION 1. In the captioned proceeding, Kansas City Cable Partners d/b/a American Cablevision of Kansas City ("American Cablevision") has requested modification of the Kansas City, Missouri Area of Dominant Influence (ADI) insofar as it involves carriage of the signal of television station KMCI(TV), Channel 38, Lawrence, Kansas. Specifically, American Cablevision requests that the 44 communities served by its cable systems described as being in Clay, Jackson, Platte and Cass Counties, Missouri and Wyandotte, Johnson and Leavenworth Counties, Kansas ("Kansas City systems") be excluded from KMCI(TV)'s television market, which are considered part of the Kansas City, Missouri ADI, for the purpose of the cable television mandatory broadcast signal carriage rules. This petition was opposed by Miller Broadcasting Inc ("Miller")., licensee of KMCI(TV) on November 12, 1993 and American Cablevision replied on November 30, 1993. Letters supporting the request were received from the City of North Kansas City, the City of Smithville, the City of Edwardsville, and the City of Parkville. BACKGROUND 2. Pursuant to 4 of the Cable Television Consumer Protection and Competition Act of 1992 ["1992 Cable Act"] and implementing rules adopted by the Commission in its Report and Order in MM Docket 92-259, a commercial television broadcast station is entitled to assert mandatory carriage rights on cable systems located within the station's market. A station's market for this purpose is its "area of dominant influence," or ADI, as defined by the Arbitron audience research organization. An ADI is a geographic market designation that defines each television market exclusive of others, based on measured viewing patterns. Essentially, each county in the United States is allocated to a market based on which home-market stations receive a preponderance of total viewing hours in the county. For purposes of this calculation, both over-the-air and cable television viewing are included. 3. Under the Act, however, the Commission is also directed to consider changes in ADI areas. Section 614(h) provides that the Commission may: with respect to a particular television broadcast station, include additional communities within its television market or exclude communities from such station's television market to better effectuate the purposes of this section. In considering such requests, the Act provides that: the Commission shall afford particular attention to the value of localism by taking into account such factors as - (I) whether the station, or other stations located in the same area, have been historically carried on the cable system or systems within such community; (II) whether the television station provides coverage or other local service to such community; (III) whether any other television station that is eligible to be carried by a cable system in such community in fulfillment of the requirements of this section provides news coverage of issues of concern to such community or provides carriage or coverage of sporting and other events of interest to the community; and (IV) evidence of viewing patterns in cable and noncable households within the areas served by the cable system or systems in such community. 4. The legislative history of this provision indicates that: The provisions of [this subsection] reflect a recognition that the Commission may conclude that a community within a station's ADI may be so far removed from the station that it cannot be deemed part of the station's market. It is not the Committee's intention that these provisions be used by cable systems to manipulate their carriage obligations to avoid compliance with the objectives of this section. Further, this section is not intended to permit a cable system to discriminate among several stations licensed to the same community. Unless a cable system can point to particularized evidence that its community is not part of one station's market, it should not be permitted to single out individual stations serving the same area and request that the cable system's community be deleted from the station's television market. 5. The Commission provided guidance in MM Docket 92-259, supra, to aid decision making in these matters, as follows: For example, the historical carriage of the station could be illustrated by the submission of documents listing the cable system's channel line-up (e.g., rate cards) for a period of years. To show that the station provides coverage or other local service to the cable community (factor 2), parties may demonstrate that the station places a Grade B coverage contour over the cable community or is located close to the community in terms of mileage. Coverage of news or other programming of interest to the community could be demonstrated by program logs or other descriptions of local program offerings. The final factor concerns viewing patterns in the cable community in cable and noncable homes. Audience data clearly provide appropriate evidence about this factor. In this regard, we note that surveys such as those used to demonstrate significantly viewed status could be useful. However, since this factor requires us to evaluate viewing on a community basis for cable and noncable homes, and significantly viewed surveys typically measure viewing only in noncable households, such surveys may need to be supplemented with additional data concerning viewing in cable homes. 6. In adopting rules to implement this provision, the Commission indicated that changes requested should be considered on a community-by-community basis rather than on a county-by-county basis and that they should be treated as specific to particular stations rather than applicable in common to all stations in the market. The rules further provide, in accordance with the requirements of the Act, that a station not be deleted from carriage during the pendency of an ADI change request. ARGUMENTS 7. In its petition and in a reply pleading, American Cablevision argues the KMCI(TV) is a commercial station that is predominantly utilized for the transmission of sales presentations or program length commercials and that it fails to present programming tailored to the local needs and interests of the particular communities serviced by its systems. It accordingly seeks to be relieved of the obligation to carry KMCI(TV)'s signal. Imposition of a carriage obligation, it is said, will cause the systems to remove some service from the expanded basic tier and possibly some service from the basic tier line-up. Although this station has been operating since 1988, its signal has never been carried on the systems in question since the station provides no significant local programming and thus there was no incentive for its signal to be carried. It is said that "only one other major cable system in the [Kansas City] ADI carries KMCI." 8. KMCI(TV), it is contended, has virtually given over its right to broadcast to the Home Shopping Club. In contrast to the alleged paucity of local programming on KMCI(TV), American Cablevision states that several Kansas City area stations that are carried on its systems provide extensive local programming throughout each day. The system itself is also said to offer a number of channels dedicated to local affairs and/or local origination programming. The station's "Issues/Programming Quarterly Report" and "Children's Programming Quarterly Report" are said to reveal only minimal amounts of such programming. Such programming as is run is said to consist of short spots, lasting between 30 seconds and five minutes rerun over and over throughout the day. 9. With respect to audience in the area, it is said that KMCI(TV), after operation for approximately five years, is not even counted by Arbitron in terms of the market's daypart ratings and shares and is not "significantly viewed" in a single county in Kansas or Missouri. 10. In reply, Miller argues that American's petition is simply an effort to avoid carriage of a home shopping station in competition with a home shopping channel contemplated by Time Warner, the system's owner, in conjunction with Spiegel, Inc. Miller contends that the ADI modification procedures contained in the Act and the factors referenced therein were intended principally to facilitate inclusion rather than exclusion of communities in stations' markets. Miller disputes the assertion that its public affairs programming denotes a lack of commitment to the local community. In this regard it notes the station's issues programs list is, by virtue of the Commission's rules (Section 73.3526), intended to be illustrative only and contain the station's most significant treatment of community issues rather than to be inclusive. KMCI(TV), it is said, broadcasts a regular program "Viewpoint" that provides public affairs programming addressing a wide range of topics responsive to local interests and concerns and that it broadcasts syndicated children's programming consistent with the Commission's recognition "that local needs can be satisfied through the presentation of programming which is not locally produced." With respect to viewership, Miller argues that the use of Arbitron ratings as a benchmark is inappropriate and that a more appropriate measuring stick for its viewership is club membership. KMCI(TV) is said to have "tens of thousands of club members." DISCUSSION 11. Because American Cablevision has not pointed to particularized and persuasive evidence that the communities in question are outside of KMCI(TV)'s market, based on an analysis the four specific statutory or any other relevant factors, its petition will be denied. We note as a preliminary matter, that the ADI market change process incorporated into the Communications Act is not intended to be a process whereby cable operators may seek relief from the mandatory signal carriage obligations apart from the question of whether a change in the market area involved is warranted. Here the arguments presented are generally not such as assist in resolving whether a change is appropriate -- whether one community rather than another should be included or excluded from the market -- but rather appear directed to whether the signal of KMCI(TV) should be carried regardless of the specific location of the cable communities. 12. The 44 communities here in question are located in Kansas City and surrounding communities in Clay, Jackson, Platte and Cass Counties, Missouri and Wyandotte, Johnson and Leavenworth Counties, Kansas, all of which are within the Kansas City, Missouri ADI. Lawrence, Kansas, KMCI(TV)'s city of license, is considered by Arbitron to be a part of the same ADI and is approximately 35 miles west of Kansas City which is the core of the market and which contains the major population concentration in KMCI(TV)'s existing market area. The rest of the communities in question are between 35 and 54 miles from Lawrence and the 7 counties together contain some three-quarters of the television households in the market. Given the general structure of the market, including the fact that Lawrence is only 35 miles distant from the center of the market, its location not only within the ADI of the market but within the same standard metropolitan statistical area, the Grade A signal coverage by KMCI(TV) of the core of the market, and the high degree of overlap between the service areas of KMCI(TV) and all of the other stations licensed to Kansas City, it appears at the outset that KMCI(TV) is logically part of this ADI as are the cable communities in question. 13. Focusing on the specific factors referenced in the statute, we are unable to conclude that American Cablevision's arguments distinguish these cable communities from the rest of the market. With respect to the question of historical carriage patterns, there is no dispute that the signal of KMCI(TV) has not been carried on the systems in question. The 1992 Cable Act was adopted, however, in part to cure past discriminatory signal carriage practices. Thus, the absence of historical carriage cannot by itself be used to justify a refusal of carriage in the future. Rather, carriage patterns are useful insofar as they provide insight into structure of the market involved. Here the carriage pattern appears, based on petitioner's own comments, to be more related to judgments as to the value of the station's programming, than to its location within the market. 14. Petitioner has also failed to demonstrate that KMCI(TV) does not provide local coverage or service to the Kansas City systems. The fact that KMCI(TV) places a principal city contour over many of the communities and a Grade A or Grade B contour over the remaining communities where American Cablevision's subscribers are located is persuasive evidence that is provides service to these communities. The Commission has noted the importance of such contour coverage in determining local service. With regard to the content of KMCI(TV) programming, the Commission has found that home shopping formats are not incompatible with local appeal and has recognized that such specialized programming traditionally has drawn smaller audiences. The Commission has specifically affirmed that home shopping stations may serve the public interest because, among other reasons, they provide "an important service to viewers who either have difficulty obtaining or do not otherwise wish to purchase goods in a more traditional manner." 15. We also find petitioner's arguments regarding KMCI(TV)'s lack of audience ratings to be unpersuasive. The Commission has previously recognized that stations with limited audiences, once referred to as specialty stations, are nevertheless capable of "offer[ing] desirable diversity of programming . . . ," yet typically attract limited audiences. The fact that speciality stations, and those akin to them such as home shopping stations, attract smaller audience shares, is properly taken into account in determining the equities concerning a station's right to cable carriage. As with the historical carriage issue, audience information is useful if it distinguishes one geographic or market area from another but the information provided by American Cablevision, because it suggests that KMCI(TV) has no audience ratings anyplace, is of no assistance in this regard. 16. Finally, we do not believe that American Cablevision's carriage of other local stations is sufficient to justify exclusion of its system from the above referenced communities. American Cablevision has not sufficiently demonstrated why it is necessary to remove itself from its own ADI, vis-a-vis KMCI(TV), yet remain in the same market with regard to the station's competitors. We find that American Cablevision's petition is inconsistent with Congressional intent which clearly states that the market modification policy was not provided as a means for cable systems to avoid their must carry obligations. 17. In conclusion, because American Cablevision has not pointed to particularized evidence that the communities it serves are not part of KMCI(TV)'s market, based on the four specific statutory factors or any other relevant factors, we find that grant of its petition is not in the public interest. ORDER 18. Accordingly, IT IS ORDERED, pursuant to 614(h) of the Communications Act of 1934, as amended (47 U.S.C. 534), and 76.59 of the Commission's Rules (47 C.F.R. 76.59), That the captioned petition for special relief, filed October 4, 1993, on behalf of Kansas City Cable Partners d/b/a American Cablevision of Kansas City, IS DENIED. Its petitions having been denied, Kansas City Cable Partners shall comply with the applicable provisions of the Section 614 of the Communications Act and the associated rules within sixty (60) days of the release of this Order. 19. This action is taken pursuant to authority delegated by 0.321 of the Commission's Rules. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau