///newjob/// $//Grant of KNOP's ADI Modification Petition, DA-95-768//$ $/76.7 Special relief and must-carry complaint procedures/$ $/76.59 Modification of television markets/$ $/300.534 Carriage of local commercial television signals/$ ///newjob/// $///DA 95-768,4/12/95///$ DA 95-768 Before the Federal Communications Comm ission Washington D.C. 20554 In re: ) ) North Platte Television, Inc. ) CSR-4025-A Omaha, Nebraska ) ) For Modification of Station ) KNOP-TV's ADI ) MEMORANDUM OPINION AND ORDER Adopted: April 6, 1995 Released: April 17, 1995 By the Cable Services Bureau: INTRODUCTION 1. In the captioned proceeding, North Platte Television, Inc., licensee of television station KNOP (hereinafter "KNOP"), North Platte, Nebraska (NBC - channel 2), has requested the Commission to include the Nebraska communities of Cozad, Gothenburg, and Lexington within the North Platte, Nebraska "area of dominant influence" ("ADI") for the purpose of obtaining signal carriage rights on the cable systems serving those communities. This petition is unopposed. 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 No. 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 1992 Cable 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 non-cable households within the areas served by the cable system or systems in such community. 4. The legislative history of this provision indicates that: where the presumption in favor of ADI carriage would result in cable subscribers losing access to local stations because they are outside the ADI in which a local cable system operates, the FCC may make an adjustment to include or exclude particular communities from a television station's market consistent with Congress' objective to ensure that television stations be carried in the areas which they serve and which form their economic market. * * * * * [This subsection] establishes certain criteria which the Commission shall consider in acting on requests to modify the geographic area in which stations have signal carriage rights. These factors are not intended to be exclusive, but may be used to demonstrate that a community is part of a particular station's market. 5. The Commission provided the following guidance in the Report and Order to aid decision making in these matters: 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 at least 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 non-cable 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 non- cable homes, and significantly viewed surveys typically measure viewing only in non-cable 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 requested changes 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 1992 Cable Act, that a station not be deleted from carriage during the pendency of an ADI change request. 7. Adding communities to a station's ADI generally entitles that station to insist on cable carriage in those communities. However, this right is subject to several conditions: 1) a cable system operator is generally required to devote no more than one-third of the system's activated channel capacity to compliance with the mandatory signal carriage obligations; 2) the station is responsible for delivering a good quality signal to the principal headend of the system; 3) indemnification may be required for any increase in copyright liability resulting from carriage; and 4) the system operator is not required to carry the signal of any station whose signal substantially duplicates the signal of any other local signal carried, or the signal of more than one local station affiliated with a particular broadcast network. If, pursuant to these requirements, a system operator elects to carry the signal of only one such duplicating signal, the operator is obliged to carry the station from the ADI whose city of license is closest to the principal headend of the cable system. Accordingly, based on the specific circumstances involved, the addition of communities to a station's ADI may guarantee it cable carriage and specific channel position rights, or may simply provide the system operator with an expanded list of must-carry signals from which to choose (i.e., when the system has used up its channel capacity mandated for broadcast signal carriage, or determined which of duplicating network affiliated stations are entitled to carriage priority). MARKET FACTS AND ARGUMENTS OF THE PARTIES 8. In its petition, KNOP asks the Commission to add Cozad, Gothenburg, and Lexington, Nebraska to the North Platte, Nebraska ADI so that KNOP may assert must carry rights on the cable systems serving those communities. KNOP explains that the three communities are located in Dawson County which is currently assigned to the Lincoln-Hastings-Kearney ADI. Petitioner argues that the modification should be granted because of relative proximity of the communities to North Platte, roughly 35 miles, and that KNOP is the only NBC signal receivable off-the-air in the communities and carried on their cable systems. 9. In support of its request, KNOP states that it has been carried on the cable system serving Lexington for the last 26 years and the cable systems serving Cozad and Gothenburg for approximately the last ten years. With respect to coverage and local service, KNOP states that its Grade B signal encompasses all of the communities in question. In addition, KNOP is listed as significantly viewed in Dawson County. KNOP states that an analysis of the station's programming during the period beginning May 1991 through July 1993 shows that it has aired some 632 news or sporting events of particular interest to residents in Lexington and a similar analysis reflects some 613 broadcasts treating matters of local interest to the communities of Cozad and Gothenburg. The station gives several examples of coverage of the communities at issue including high school sporting events and local political happenings. As for local viewing patterns, according to 1993 Nielsen figures, KNOP has a net weekly circulation of 50 and a share of 15 in Dawson County. KNOP adds that, on the other hand, the NBC affiliate in Hastings, Nebraska (KHAS) has "achieved minimal reported viewing in Dawson County. ANALYSIS AND DECISION 10. KNOP has provided sufficient evidence to justify its market modification request and it will accordingly be granted. Turning to the factors specified in the 1992 Cable Act, we find that KNOP has met three of the four statutory elements with the historical carriage requirement and viewership showing being particularly notable. As KNOP's pleading reveals, the station has been continuously carried on the Lexington cable system since 1967 and on the other relevant cable systems for at least ten years. The fact that the cable operators have continuously carried KNOP demonstrates that the cable operators and their subscribers value the station which has been the only NBC network affiliate providing service to the communities at issue. 11. The viewing pattern data in cable and non-cable households also demonstrates that KNOP has a strong marketplace presence in Cozad, Gothenburg, and Lexington. The station has a substantial net weekly circulation (cume) and share in cable and non-cable households in Dawson County. In 1993, for example, KNOP's viewing share in Dawson County was 15 and its net weekly circulation was 50. With respect to coverage and local service to the cable communities, we believe that KNOP has shown that it provides programs of interest to the three communities including coverage of local political activities along with sports and other community-specific human interest stories. Finally, KNOP has shown that it places a Grade B contour over the three communities. 12. With respect to the third factor, we note that KNOP fails to indicate if any other station licensed to communities within the Lincoln-Hastings-Kearney, Nebraska ADI provides coverage of, and programming to, the communities in question. We do not believe that Congress intended the third criterion to operate as a bar to a station's ADI claim whenever other stations could also be shown to serve the communities at issue. Rather, we believe that this criterion was intended to enhance a station's claim where it could be shown that other stations do not serve the communities at issue. Under such circumstances, a denial of carriage rights to the claiming station could deprive cable viewers of any broadcast signals that might provide programming geared to their communities. We view KNOP's showing on each of the other factors is sufficient, and even absent enhancement under the third criterion, grant of its request is warranted. ORDER 13. Accordingly, IT IS ORDERED, pursuant to 614 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 petition for special relief filed on August 6, 1993 by North Platte Television, Inc. IS GRANTED. 14. 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