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File pnmc5021 (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ***************************************************************** ******** $//Grant of WTXX's petition for special relief, DA-95-918//$ $/300.534 Carriage of local commercial television signals/$ $/76.7 Special relief and must-carry complaint procedures/$ $/76.59 Modification of television markets/$ Before the Federal Communications Commission Washington, D.C. 20554 DA-95-918 In re: ) ) Counterpoint Communications. Inc. ) CSR-3839-A Licensee of Television Station ) WTXX, Waterbury, Connecticut ) ) Petition for Special Relief to Add ) Certain Communities to WTXX's ) Television Market ) MEMORANDUM OPINION AND ORDER Adopted: April 20, 1995 Released: By the Cable Services Bureau: INTRODUCTION 1. Counterpoint Communications, Inc., licensee of WTXX-TV, Channel 20, Waterbury, Connecticut, (hereinafter "WTXX") filed the captioned petition for special relief, to include a number of Fairfield County, Connecticut communities within the Hartford-New Haven ADI for purposes of asserting signal carriage rights on cable systems serving those communities. Cook Inlet Communications Corp., licensee of WTNH, New Haven, Connecticut, (hereinafter "WTNH") and Cablevision Systems of Southern Connecticut, L.P. and Cablevision of Connecticut, L.P. (collectively "Cablevision") filed opposition to this petition. WTXX submitted reply comments to these opposition. 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 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. WTXX is an independent television station licensed to Waterbury, Connecticut, which is part of the Hartford-New Haven area of dominant influence ("ADI"). Each of the communities that WTXX seeks to include is in Fairfield County, Connecticut, the only county in that state assigned to the New York ADI, rather than the Hartford-New Haven ADI. 9. According to petitioner, the station signed on-the-air on September 4, 1953. It was acquired by WTXX Communications in March 1993 and became a part-time affiliate of the Home Shopping Network at that time. While WTXX initially dedicated about 60% of its broadcast week to a home shopping format, that percentage of programming dropped to less than 50% on May 17, 1993, to ensure WTXX's continued cable carriage during the pendency of the Commission's rulemaking to determine whether such stations were entitled to must-carry status. 10. WTXX states that each of the cable systems in question has carried its signal for at least ten years. WTXX also includes a coverage map that shows that its station places a Grade B or better signal over all of Fairfield County and a Grade A signal over most of the County's cable systems. It notes that the majority of Fairfield County lies within 35 miles of WTXX's city of license and, therefore, the station was considered local under the Commission's previous must-carry rules and is local for copyright compulsory license purposes. WTXX also asserts that it is considered significantly viewed in Fairfield County. 11. The petitioner further contends that it offers a diverse mix of programming of interest to viewers in Connecticut. In particular, it asserts that it is developing a nightly half-hour newscast that will focus on news impacting the state's residents. WTXX cites its acquisition of the exclusive Connecticut rights for the program, "NEWS AMERICA," which will provide an additional national news source beginning in the Fall of 1993. WTXX claims that the New York stations do not provide adequate local service to Connecticut residents due to the size of the market and the small percentage of the total area that Fairfield County represents. WTXX also argues that as it adds more syndicated and original programming, it will look to Fairfield County advertisers for revenue. WTXX believes that it will attract these advertisers because its advertising time will be less expensive than that of the New York City stations. 12. WTNH and Cablevision, in separate oppositions, argue that the current WTXX is a different station than that which has been historically carried by the Fairfield County cable systems. Cablevision maintains that there have been two WTXXs. Under the previous owner, WTXX was a station that carried a variety of popular programming and the weekly "Connecticut Viewpoint"; today, the station is just a Home Shopping Network affiliate. As such, the parties argue that historical carriage should not be afforded much weight in considering this request due to the significant changes in programming since 1993. 13. With respect to local coverage or other service, WTNH argues that the significantly viewed status of WTXX is irrelevant since the historical data used to determine this status is outdated given the station's recent format change. WTNH and Cablevision note that WTXX describes its station's non-entertainment programming and programming of interest as generally applicable to all Connecticut residents; in their view, this description is insufficient and does not meet the requirement that parties provide information regarding the broadcast of county- or community-specific programming. Cablevision argues that petitioner provides no evidence that its programming currently addresses, or that the proposed newscast will address, issues specifically directed to Fairfield County viewers. Both opposing parties also note that the planned newscast will also be provided by WVIT, another station licensed to the Hartford-New Haven ADI and one that Cablevision indicates it will continue to carry assuming it receives retransmission consent. While WTXX argues that the New York stations do not provide adequate programming of local interest for Fairfield County residents, WTNH and Cablevision contend that the petitioner fails to comment on the significant amount of Connecticut-oriented programming provided by the other stations licensed in the Hartford-New Haven ADI which are currently carried on the cable systems. Cablevision further asserts that its Fairfield County systems plan to continue carriage of these other stations, which not only provide programs of general state interest, but also broadcast some programming of specific interest to Fairfield County such as University of Connecticut sports, public affairs, local talk shows and state lottery drawings. Finally, these parties state that WTXX's request should be rejected because the petitioner has failed to submit viewing data beyond a reference to its significantly viewed status in Fairfield County. 14. In reply, WTXX contends that its affiliation with the Home Shopping Network and its change of ownership does not render it ineligible for must-carry status. It repeats that WTXX-TV has been historically carried by the Fairfield County cable systems and places at least a Grade B signal over the affected communities. WTXX argues that because Cablevision admits that the historical carriage of the station was based on a long history of providing educational and informational programming, it therefore "meets the second and fourth prongs of the Section 614 test." In this submission, WTXX cites recent programming that it claims have "a direct local focus" and reiterates the public service aspect of its programming in terms of its interest to Connecticut state residents. ANALYSIS AND DECISION 15. WTXX has justified modifying its ADI to include the Fairfield County communities named in the petition for special relief. At the outset, based on the general geography and market structures implicated, it is evident that the requested change would involve a preferable allocation of the area in question between the markets and would "better effectuate the purposes" of the applicable statutory provisions. The majority of Fairfield County communities are no more that 35 miles from Waterbury, CT, WTXX's city of license and the furthest Fairfield County community named in the petition is no more than 50 miles from Waterbury. Moreover, with the Hartford-New Haven ADI abutting Fairfield County to the south, WTXX appears closer to Fairfield County than stations licensed in the New York ADI. Turning to the factors specified in the 1992 Cable Act, we find that WTXX has sufficiently satisfied the statutory requirements with its local coverage element being particularly notable. 16. WTXX demonstrates that it meets the historical carriage requirement with respect to apparently all cable systems operating in Fairfield County. The fact that each of the cable operators has carried WTXX for at least 10 years signifies its ties to the Fairfield County communities. We do not agree with the opposition that the recent change in ownership and format negate the fact that the station has been traditionally carried by these cable operators. In particular, we note that, even when these changes took place, the systems generally did not drop the station. We also conclude that WTXX satisfies the coverage element of the statutory test since all the named communities fall within this station's Grade B contour and most within its Grade A contour. With regard to the content of WTXX's programming, the Commission found that home shopping formats are not incompatible with local appeal and recognize that such specialty 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." 17. As for viewing pattern data in cable and non-cable households, we note that the station has a 2 share and 30 net weekly circulation. We find any arguments regarding WTXX's lack of ratings to be unpersuasive. We have previously recognized that stations with limited audiences, once referred to as specialty stations, are capable of "offer[ing] desirable diversity of programming . . . ," yet typically attract limited audiences. The fact that specialty 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. In this instance, we believe that the audience share figure, while not the strongest factor, when taken as a whole with Fairfield County's geographic location, Grade B contour coverage and historical carriage, warrants a grant of the requested change. 18. With respect to the third statutory factor, we note that WTXX does not fully discuss the amount and kind of programming New York ADI stations provide to the Fairfield County communities. 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. ORDER 19. In view of the foregoing, we find that grant of Counterpoint Communications, Inc.'s petition is in the public interest. 20. Accordingly, IT IS ORDERED, pursuant to Section 614(c) 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 May 11, 1993, by WTXX Communications, Inc., IS GRANTED. 21. IT IS FURTHER ORDERED that WTXX's television market is modified to include all Fairfield County communities served by Cablevision of Connecticut, Cablevision of Southern Connecticut, Comcast Cablevision of Danbury, Tele-Media of Western Connecticut, and Crown Houstatonic Cablevision. The station shall notify the cable systems in question in writing of its carriage and channel position elections, (76.56, 76.57, 76.64(f) of the Commission's Rules), within thirty (30) days of the release date of this Memorandum Opinion and Order. The affected cable systems shall come into compliance with the applicable rules within sixty (60) days of such notification. 22. 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