$//Denial of Meredith's ADI modification petition, DA-95-804//$ $/76.7 Special relief and must carry complaint procedures/$ $/76.59 Modification of television markets/$ $/300.534 Carriage of local commercial television signals/$ ///newjob/// $///DA 95-804,4/12/95///$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 DA-95-804 In re: ) ) North Central Cable ) CSR-3930-A Communications, Inc. dba ) Meredith Cable) ) For Modification of Television ) Broadcast Station KXLI'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 Central Cable Communications, Inc. dba Meredith Cable ("Meredith"), has requested the Commission to modify the Minneapolis-St. Paul, Minnesota Area of Dominant Influence (ADI) relative to Television Broadcast Station KXLI (Ind., Ch. 41), St. Cloud, Minnesota. Specifically, Meredith requests that the communities served by six of its Minneapolis, Minnesota cable systems be excluded from KXLI's ADI, for the purpose of the cable television mandatory broadcast signal carriage rules. An opposition to this petition was filed by KX Acquisition L.P., licensee of KXLI, to which Meredith replied. 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 area. 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 No. 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. MODIFICATION ARGUMENTS 7. The communities here in question are located in the counties of Anoka, Dakota, Hennepin, Ramsey and Washington, Minnesota, all of which are located within the Minneapolis-St. Paul, Minnesota ADI. St. Cloud, Minnesota, KXLI's city of license, is considered to be a part of the same ADI and is approximately 40 miles from the nearest of the communities served by Meredith. 8. In support of its petition, Meredith argues that KXLI should be excluded from carriage on its systems for several reasons. First, KXLI is not currently being carried on any of the systems and has not been carried since it went dark in 1988. As a result, maintains Meredith, removing KXLI would cause no disruption to established viewing patterns nor would it deprive KXLI of an existing cable audience. Second, KXLI fails to provide adequate local programming or services of interest to the communities in question. Indeed, Meredith states, the other local must carry stations, which have been historically carried on its systems, provide a more than adequate amount of local programming. Third, Meredith already carries another home shopping station so that KXLI's programming would make little contribution to the needs of Meredith's subscribers. Fourth, although KXLI has been deemed to be significantly viewed in the counties in which its communities are located, Meredith argues that this is irrelevant since this status was obtained before the station went dark and had a dramatic format change. Moreover, a significantly-viewed designation based only on noncable homes offers no legitimate evidence that a station's carriage is warranted. 9. In its opposition, KXLI states that it was historically carried on Meredith's systems from 1982 until it was forced off-the-air by financial difficulties in 1988. In addition, both its Grade A and Grade B contours cover the instant communities and its main studio/transmitter is located only 21 miles from Meredith's principal headend in Anoka, Minnesota. KXLI points out that it supplements its home shopping format with a variety of locally-originated issue-responsive, public service, religious, and children's programming. It maintains that Meredith provides no evidence (i.e., program logs, etc.) to support its contention that the other must-carry stations it carries already provide adequate local programming. Moreover, KXLI avers that Meredith's claim that the station's significantly- viewed status is no longer valid is without precedent. The Commission has never required periodic audience surveys to retain such status, despite format changes. In any event, KXLI states that the number of home shopping purchases it receives from viewers in the Minneapolis area proves that its viewership is far greater than a normal 2% share. Indeed, it states that despite not being carried by any cable system in the Twin Cities area since 1990, it still serves an impressive number of noncable viewers. In seven months, it points out, it had 6,885 buyers, or approximately 6% of the noncable viewers. KXLI maintains that this is a conservative estimate since the number of viewers who watch home shopping programming without making a purchase is substantially larger. Further, KXLI argues that Meredith completely ignores the Commission's decision according home shopping stations must-carry rights and concluded that home shopping stations have the same obligation as other stations to provide local programming. Also, despite Meredith's assertions, KXLI maintains that its carriage, in addition to the two nonbroadcast home shopping services already carried by Meredith, would enhance the competition choices of subscribers. Report and Order, supra, at paragraph 22. 10. Meredith's reply does not dispute the fact that home shopping stations were given must-carry status by Commission order. Instead it argues that of the local programming KXLI claims it provides to the communities at issue, only two programs afford a nominal showing of "localism" and both should be afforded little weight in meeting this requirement. Finally, Meredith maintains the issue of its addition of another nonbroadcast home shopping station is irrelevant to the question of whether or not KXLI meets the must- carry requirements. DISCUSSION 11. Because Meredith has not pointed to particularized and persuasive evidence that the communities in question are not part of KXLI's market, based on the four specific statutory or any other relevant factors, its petition must be denied. Initially we note that, given the general structure of the market, including the fact that St. Cloud, KXLI's city of license, is in the approximate center of the market, its inclusion not only within the ADI of the market, but within the same standard metropolitan statistical area, the Grade A signal coverage by KXLI of the core of the market, and the high degree of overlap between the service area of KXLI and all of the other stations licensed to Minneapolis-St. Paul, it appears at the outset that KXLI is logically part of this ADI as are the cable communities in question. Moreover, from the evidence, there appears to be current interest in the Minneapolis area not only for KXLI's home shopping programming, but also for the locally-originated programming that KXLI is providing in its weekly schedule. 12. With regard to the first statutory criterion, which deals with historic carriage on a cable system, we note that the 1992 Cable Act was adopted in part to cure past discriminatory signal carriage practices. Where, as is the case here, a petitioner seeks to delete a station from a relevant ADI with respect to a cable system and cable carriage patterns do not help to differentiate between communities in the area or in the market, we believe that failure to establish continual historic carriage should not be given great weight. KXLI was carried on Meredith's systems from 1982 when it first went on the air until it was forced off-the-air by financial difficulties in 1988. The fact that Meredith chose not to reestablish KXLI's carriage when it resumed programming in 1990 does not lessen KXLI's must-carry rights in its own ADI market. Second, both KXLI's Grade A and Grade B contours encompass the communities in question. Also, Meredith has not questioned KXLI's signal quality. The fact that other ADI licensees provide coverage of and service to the communities in question is not to the contrary. We do not believe that Congress intended this 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, but rather 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. 13. Further, we also find Meredith's arguments regarding KXLI's lack of ratings to be unpersuasive. First, the Commission has previously recognized that stations that could once be classified as specialty stations (i.e., religious and foreign language), are capable of "offer[ing] desirable diversity of programming . . . ," yet typically attract limited audiences. We continue to believe, that the fact that such stations attract limited audiences must be taken into account in determining the equities concerning such stations' rights to cable carriage. Home shopping stations, which also have limited audiences for like reasons, warrant analogous treatment and consideration. KXLI has submitted evidence that over a seven- month period it received a large number of home shopping purchases from viewers in the relevant counties totalling approximately 6% of all of the non-cable viewers in Meredith's service areas. This is significant considering that the cable viewership in the relevant counties ranges from 41% to 51%. It could be assumed, therefore, that access to cable viewers would only increase KXLI's showing. Consequently, based upon the above, we find that Meredith has failed to carry its burden of establishing that the public interest would be served by deleting KXLI from the Minneapolis-St. Paul ADI as it relates to carriage on Meredith's cable systems at issue. ORDER 14. Accordingly, IT IS ORDERED, pursuant to 614(C) of the Communications Act of 1934, as amended (47 U.S.C. 534) and 76.59 of the Commission's Rules (47 CFR 76.59), That the captioned petition for special relief, filed June 30, 1993, by North Central Cable Communications, Inc. dba Meredith Cable IS DENIED. Its petitions having been denied, North Central Cable Communications, Inc. dba Meredith Cable 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. 15. This action is taken pursuant to authority delegated under 0.321 of the Commission's Rules. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau