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File how2ftp (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ***************************************************************** ******** 1.$//Denial of Catawba's petition for special relief, DA 95-____//$ $/300.534 Carriage of local commercial television signals/$ $/76.7 Special relief and must-carry complaint procedures/$ $/76.59 Modification of television markets/$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 DA 95-2401 In re: ) ) Petition of Catawba Services, Inc. ) CSR-4452-A d/b/a Rock Hill Cable TV ) ) Palmetto Cable TV, Inc. ) ) Carolina Telecom, Inc.) d/b/a York Cable TV ) ) Video Vision, Inc. ) d/b/a/ Lancaster Cable TV, and ) ) Great Falls Cable TV, Inc. ) ) Modification of WKAY's ADI Market) For Must Carry Purposes ) MEMORANDUM OPINION AND ORDER Adopted: November 20, 1995 Released: December 5, 1995 By the Deputy Chief, Cable Services Bureau: INTRODUCTION 1. Before the Commission is a petition for special relief filed by Catawba Services, Inc. d/b/a Rock Hill Cable TV; Palmetto Cable TV, Inc.; Carolina Telecom, Inc. d/b/a York Cable TV; Video Vision, Inc. d/b/a/ Lancaster Cable TV; and Great Falls Cable TV, Inc. (collectively "Catawba" or "operator") seeking to modify the Charlotte, North Carolina "area of dominant influence" ("ADI") to exclude itself from the television market of station WKAY-TV (channel 64), Kannapolis, North Carolina with respect to certain cable communities. Catawba's petition is unopposed. BACKGRO UND 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, commercial television broadcast stations are 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 4 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: 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 guidance in its Report and Order 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 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 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. MARKET FACTS AND ARGUMENTS OF THE PARTIES 7. In its petition for special relief, Catawba requests that the television market of WKAY-TV -- the Charlotte, North Carolina ADI -- be modified so as to relieve the systems from any obligation to carry that station. Catawba states that, although the Charlotte, North Carolina ADI technically encompasses both the station and the systems, it would be counter to the goals underlying the must carry regime to afford WKAY-TV must carry rights in the cable communities. Noting that the systems have no available unused space among their 43 channels, Catawba asserts that forced carriage of WKAY-TV would have a negative impact on the operator's ability to provide its customers with desired programming because Catawba would have to drop another service to accommodate the station. 8. The operator explains that the systems serve approximately 38,500 subscribers in rural communities in the counties of York, Lancaster, Fairfield, and Chester, South Carolina. The majority of the subscribers reside within Rock Hill, which is located approximately 20 miles southwest of Charlotte, North Carolina. WKAY-TV signed on-the-air in October 1994 and Kannapolis, its city of license, is located in Cabarrus County which is approximately 25 miles northeast of Charlotte. Catawba emphasizes that WKAY-TV is more than 40 miles distant from its systems and is physically separated by a substantial metropolitan area and the North Carolina-South Carolina state line. The operator adds that the local news and information broadcast by Charlotte stations do not address issues of state- wide concern to the systems' South Carolina subscribers. Instead, the Communities obtain South Carolina specific news and information from stations licensed to South Carolina communities such as WSPA-TV (CBS, channel 7), Spartanburg, South Carolina and WIS-TV (NBC, channel 10), Columbia, South Carolina. Catawba states that the Commission cannot ignore the importance of these in-state stations. 9. Turning to the statutory criteria for market modifications, Catawba first addresses the historical carriage factor. The operator asserts that WKAY-TV has never been carried on the systems and that no other area cable system carries the station's signal. Catawba adds that its systems and neighboring cable systems have never carried any television station licensed to a community north of Charlotte; however, the systems carry Charlotte stations because that city is a large metropolitan area within easy driving distance. As for local service, Catawba states that it cannot determine whether WKAY-TV covers any matters of interest to its subscribers because the station's signal cannot be received in the Rock Hill area. The operator assumes that WKAY-TV does not attempt to cover news and events in an area unserved by its signal. Catawba adds that Kannapolis is geographically removed from the systems, and that whatever news and information the station broadcasts cover issues of concern to residents in that city and North Carolina. Referring to the third factor, Catawba notes the presence of television broadcast station WFVT (Ind., channel 55), Rock Hill, South Carolina, the first and only commercial television station to be licensed to Rock Hill or any other community served by the systems; this station went on-the-air on October 20, 1994 and will be carried on the systems by January 11, 1995. Apart from WFVT, the Communities also receive regional news from the five commercial stations licensed to Charlotte, all of which are carried on the systems. Finally, the operator alleges that WKAY-TV has no local viewership because its signal does not reach the Rock Hill area in any measurable form, a point attested to by the systems' engineers in their technical study (attached as Exhibit 3). The operator concludes by stating that although a new station might not be expected to have any ratings, this point does not diminish the need to review this statutory factor. ANALYSIS AND DECISION 10. Because Catawba has not pointed to particularized and persuasive evidence that the communities in question are not part of WKAY-TV's market, based on the four statutory or any other relevant factors, its petition must be denied. 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. In this case it appears that the operator is seeking avoid the statutory broadcast signal carriage obligations rather than to establish an improved definitions of the broadcast markets involved. We believe that it would be contrary to the public interest to grant Catawba's petition, which was filed only three months after the stations went on-the-air, before the station has had the opportunity to develop an audience and establish itself in the Charlotte, North Carolina ADI. 11. Focusing on the specific factors referenced in the statute, we are unable to find merit in Catawba's arguments. With respect to the question of historical carriage patterns, Catawba states that it has not carried the signal of WKAY-TV since the station began broadcasting. We find this fact has little evidentiary significance because the station had been operational for only three months before the petition was filed. In any case, we believe that the historical carriage factor is not controlling in these circumstances because such an interpretation of the 1992 Cable Act would, in effect, prevent new stations that cable systems had previously declined to carry, from ever being entitled to carriage. We also find Catawba's arguments regarding WKAY-TV's lack of ratings to be unpersuasive on similar grounds. The operator cannot rationally use the fourth statutory factor against a new station that has not had an adequate opportunity to make its availability known to the public and generate an audience. 12. We also find that Catawba has failed to demonstrate that WKAY-TV does not provide local coverage or service to the cable communities. Catawba's suggestion that a good quality signal cannot be received lacks any showing to support it and is inadequate to demonstrate that the station does not serve the relevant communities. Similarly, as a new station, WKAY-TV must be afforded an opportunity to develop programming attractive to viewers. 13. Finally, we do not believe that Catawba's carriage of other local stations is sufficient to justify exclusion of its system from the WKAY-TV market. Catawba has not sufficiently demonstrated why it is necessary to remove itself from its own ADI, vis-a-vis WKAY-TV, yet remain in the same market with regard to the station's competitors. We find that Catawba'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. ORDERING CLAUSES 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 C.F.R. 76.59, that the "Petition for Special Relief" (CSR-4452-A) filed January 9, 1995 by Catawba Services, Inc. IS DENIED. Catawba Services, Inc. is therefore required to carry the signal of WKAY-TV on its systems serving the aforementioned communities. WKAY-TV shall notify Catawba 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. Catawba shall come into compliance with the applicable rules within 60 days of such notification. 15. 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 William H. Johnson Deputy Chief, Cable Services Bureau