NOTICE ********************************************************* NOTICE ********************************************************* This document was originally prepared in Word Perfect. If the original document contained-- * Footnotes * Boldface & Italics --this information is missing in this version The document format (spacing, margins, tabs, etc.) is changed too. If you need the complete document, download the Word Perfect version. For information about downloading documents (FTP) see file how2ftp. File how2ftp (.txt & .wp) is in directory /pub/Bureaus/Miscellaneous/Public_Notices/ ***************************************************************** ******** 1.$//Grant of KSBW-TV's ADI Modification Petition, DA 96-//$ $/76.7 Special Relief and must-carry complaint procedures/$ $/76.59 Modification of television markets/$ $/300.534 Carriage of local commercial television signals/$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 DA 96-167 In re: ) ) KSBW License, Inc. ) CSR-4176-A Salinas, CA ) ) For Modification Television Broadcast ) Station KSBW's ADI ) MEMORANDUM OPINION AND ORDER Adopted: February 12, 1996 Released: February 21, 1996 By the Deputy Chief, Cable Services Bureau: INTRODUCTION 1. KSBW License, Inc., licensee of television broadcast station KSBW (Ch. 8, NBC), Salinas, CA, has filed a petition for special relief seeking to include 11 communities served by three different cable systems located in Santa Clara County, CA, in the Salinas- Monterey ADI for purposes of the Commission's mandatory signal carriage rules. Oppositions to this petition were filed on behalf of KNTV, Inc., licensee of KNTV-TV, San Jose, CA, and Chronicle Broadcasting., licensee of KRON-TV, San Francisco, CA. KSBW- TV filed replies to both oppositions. BACKGR OUND 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. 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 its 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 signals 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 a single affiliate of a broadcast network, it is obliged to carry the affiliate from within 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; simply provide the system operator with an expanded list of must-carry signals from which to choose, i.e., when it has used up its channel capacity mandated for broadcast signals carriage, or determined which of duplicating network affiliated stations are entitled to carriage priority. MODIFICATION ARGUMENTS 8. The communities here in question are located in Santa Clara County, California, and are considered to be part of the San Francisco-Oakland-San Jose area of dominant influence ("ADI"). KSBW's city of license, Salinas, CA, is considered to be part of the Salinas-Monterey ADI and is about 15 miles from the county border. KSBW's transmitter is located 20 miles south of San Jose in the Santa Cruz mountains, its Grade A contour encompasses all of Santa Clara county, and its Grade B contour is predicted to cover the cities of San Francisco and Oakland. 9. In support of its petition, KSBW states its signal: (1) is currently carried on the Falcon cable system in Gilroy, Morgan Hill, San Martin and portions of Santa Clara County, and has been since at least 1981; (2) was carried on the South Bay Cablevision system serving Los Gatos, Monte Serrano, and Santa Clara from 1968 to 1990 and in the community of Saratoga from 1988 to 1989; and (3) is currently carried on the Heritage cable system serving San Jose, Campbell, Cupertino, and Los Gatos, and has been since December, 1967, except for a brief period in 1988 and 1989. KSBW asserts that it provides local coverage because its Grade B contour extends well beyond Santa Clara county and it provides local service to the communities through programming and other activities. For example, the station notes that it has a fully operational news bureau located in Gilroy, CA, which is located in Santa Clara county. KSBW also includes, as evidence, a news log demonstrating coverage of news stories affecting some of the communities subject to the modification request as well as a list of the civic events its had recently participated in. Noting that the San Francisco NBC affiliate KRON often preempts the NBC prime-time schedule to broadcast local sporting events, KSBW states that it garners significant viewership in the San Francisco- Oakland-San Jose ADI because it provides local programming and reliable broadcasts of the nightly NBC television schedule. KSBW's final argument is that its market should be expanded to cure the imbalance created by the Commission when it expanded KNTV's must carry rights to include Santa Clara County, under the "Home County Rule." KSBW's argues that aside from KNTV, no other Salinas-Monterey television station enjoys the benefit of such an expanded television market. 10. In its opposition, KNTV first states that Falcon's cable system straddles the Salinas-Monterey ADI and the San Francisco-Oakland-San Jose ADI and if the system is not technically capable of segregating the channels provided to each community in those ADIs, it must necessarily carry KSBW on a system-wide basis. KNTV argues that if this is the case, KSBW's request is moot with regard to the Falcon cable communities and it would not oppose the addition of those communities into KSBW's market. KNTV argues, however, that the inclusion of the other cable communities is unwarranted. KNTV states, for example, that KSBW's local viewership in cable and noncable homes in Santa Clara County is not significant when judged by the Commission's standard for "significant viewership" for a network affiliate. KNTV further argues that KSBW has failed to show that its coverage of local events fills any need that is not already fully met by other stations with must carry rights in the South Bay and Heritage communities; KNTV asserts that it provides substantial local news coverage and other programming relevant to the communities through the broadcast of public service and community affairs programming. KNTV also notes that, standing alone, KSBW's history of carriage in the South Bay and Heritage communities does not justify expansion of its market. Finally, with regard to the level playing field argument and the home county rule, KNTV argues that KSBW's desire to be similarly situated in Santa Clara county should be ignored as it has no legal or factual foundation. 11. KRON, in its opposition, also argues that KSBW has failed to demonstrate that viewing patterns in the communities justify its market modification request. KRON asserts that because KSBW has used county-wide data to support its petition and that viewership in Santa Clara county as a whole is almost negligible, the Commission cannot discount the possibility that KSBW receives little or almost no viewing in many of the communities it seeks to add. Moreover, KRON asserts that the data KSBW submits say nothing about viewership in non-cable homes when compared to cable homes. With regard to local coverage, KRON argues that while KSBW's Grade B contour appears to encompass the communities it seeks to add, this coverage does not in and of itself demonstrate that the communities should be added to the station's market due to the fact that KSBW does not provide actual programming to the cable communities at issue. KRON also submits that KSBW historically has not been carried by South Bay Cablevision as that system dropped KSBW's signal in 1990; KRON stresses that the Commission should recognize that KSBW's four year absence from this cable system indicates that the cable communities are not part of KSBW's market. On the other hand, KRON argues that it has provided local service to communities in Santa Clara county through programming and news coverage and that its Grade B contour covers all but the southeastern corner of the county. 12. In reply to KNTV's opposition, KSBW argues that KNTV's filing is a "thinly veiled" attempt to avoid the increased competition that will result from the expansion of its must carry zone. KSBW asserts that such "anti-competitive ruminations" do not form a valid basis for rejecting the petition for special relief. KSBW rebuts KNTV's viewership argument by stating that neither the 1992 Cable Act nor the Commission's rules establish a particular level of viewership that must be achieved, much less that required to establish significantly viewed status, as a prerequisite to satisfaction of the fourth statutory factor. KSBW argues that its local service area extends well into Santa Clara county providing coverage to the relevant cable communities and that KNTV's demonstration of local coverage to the same communities is irrelevant in this proceeding because the Commission has stated that the third market modification criterion is not intended to act as a bar to a station's ADI claim whenever other stations could show they also provide local service. KSBW also asserts that its deletion from the South Bay system for a short period of time does not diminish its historical carriage showing with respect to the communities served by that system because the deletion of historically carried stations is precisely the action which the ADI market modification rules were adopted to prevent and rectify. 13. In reply to KRON's opposition, KSBW suggests that the Commission should disregard KRON's opposition because it is also a veiled attempt to avoid competition. With regard to the statutory factors, KSBW argues that it provides local service to the cable communities through Grade B contour coverage. Moreover, limiting KSBW's must carry zone to that which is presently prescribed, artificially restricts its service area. As for viewing patterns, KSBW asserts that KRON has not submitted sufficient evidence to rebut the showing that KSBW has an audience in Santa Clara county and in the cable communities at issue. KSBW also argues that it has a history of carriage on South Bay Cablevision dating back to the inception of cable service for that system; KSBW's recent absence from the system does not, and should not, diminish its showing in this regard. Turning to the third statutory factor, KSBW states that KRON's local coverage is irrelevant as the Commission has discounted coverage of other stations when reviewing petitions to modify television markets. Finally, KSBW argues that information regarding KNTV's must carry market is relevant to this proceeding and asks that the Commission act on its petition to equalize competition between KSBW and KNTV. DISCUSSI ON 14. We shall grant KSBW's request to include the communities of Campbell, Cupertino, Gilroy, Los Gatos, Monte Serrano, Morgan Hill, San Martin, San Jose, Santa Clara unincorporated portions of Santa Clara County, and Saratoga, CA within the Salinas-Monterey ADI for must carry purposes. At the outset, we note that KSBW's geographic proximity to the cable communities plays an important role in the grant of petitioner's request. Here, KSBW's city of license, Salinas, CA, is only about 15 miles from the Santa Clara county border. In addition, KSBW's transmitter, atop the Santa Cruz mountains, is located only 20 miles south of San Jose, the major population center for Santa Clara county in northern California and, as noted above, one of the communities subject to the modification petition. 15. With regard to the four statutory factors, we find that KSBW has demonstrated a long history of carriage on the cable systems serving the above communities. As well, KSBW's record of carriage in the South Bay Cablevision cable communities between 1968 and 1990 is probative evidence of historical carriage notwithstanding the fact that KSBW was dropped from this system in 1990. Secondly, KSBW has also shown that it provides coverage of, and service to, these communities as they are all encompassed by its Grade A contour. We have stated previously that such coverage alone may be is sufficient to satisfy this factor. In addition, KSBW has introduced evidence demonstrating that it provides programming to the communities; this fact buttresses our finding that KSBW satisfies the local service element. We acknowledge that KRON and KNTV also cover local events in the subject communities. However, we do not believe that Congress intended for the third criterion to operate as a general bar to a station's ADI claim in every circumstance 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. With regard to viewing patterns, the 1995 Nielsen Report data indicate that KSBW has a 3 total share, a 2 cable share, a 6 non-cable share, and 22 cume in Santa Clara county. We believe these numbers indicate a moderate level of viewership particularly when compared to KRON, the local NBC affiliate in Santa Clara county, which has a large percentage of the audience with a 12 total share, 13 cable share, 12 non-cable share, and 75 cume. ORDER 17. Accordingly, IT IS ORDERED, pursuant to 614(h)(1)(C) of the Communications Act of 1934, as amended (47 U.S.C. 534(h)(1)(C)) and 76.59 of the Commission's Rules (47 C.F.R. 76.59), that the petition for special relief, filed by KSBW License, Inc. IS GRANTED. KSBW shall notify the relevant cable systems 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 Order. The affected cable systems shall come into compliance with the applicable rules within sixty (60) days of such notification. 18. 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