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File how2ftp (.txt & .wp) is in directory /pub/Bureaus/Miscellaneous/Public_Notices/ ***************************************************************** ******** Before the Federal Communications Commission Washington, D.C. 20554 In re: ) ) Clear Cablevision Inc. and ) CSR-4669-A Manchester Cablevision Inc., both) d/b/a Adelphia Cable Communications ) ) for Modification of the ) ADI Markets for Stations ) WTBY, Poughkeepsie, NY) WHAI-TV, Bridgeport, CT ) WMBC-TV, Newton, NJ ) ) ) In re: ) ) Complaint of ValueVision International, Inc. ) CSR-4649-M against Adelphia Cable Communications ) Ocean County, New Jersey ) ) Request for Carriage ) MEMORANDUM OPINION AND ORDER Adopted: May 20, 1996 Released: May 22, 1996 By the Deputy Chief, Cable Services Bureau: INTRODUCTION 1. Clear Cablevision, Inc. and Manchester Cablevision, Inc., both d/b/a Adelphia Cable Communications ("Adelphia"), have filed the above-captioned petition seeking to modify the New York "area of dominant influence" ("ADI") relative to television broadcast stations WTBY (Ch. 54), Poughkeepsie, New York; WHAI-TV (Ch. 43), Bridgeport, Connecticut; and WMBC-TV (Ch. 63), Newton, New Jersey. Specifically, Adelphia requests that the communities it serves, which are located in New Jersey's Ocean County, be deleted from the television market of each station for purposes of the cable television broadcast signal carriage rules. Oppositions to this petition were filed by Trinity Broadcasting of New York, Inc., licensee of television station WTBY; Paxson New York License, licensee of WHAI-TV; and Mountain Broadcasting Corporation, licensee of WMBC-TV. Adelphia submitted a joint reply to these oppositions. In a separate but related proceeding, WHAI-TV filed a must-carry complaint against Adelphia Cablevision for carriage on the operator's subject cable system. We will jointly consider these cases to resolve the signal carriage rights of WHAI-TV and the other television stations on Adelphia's Ocean County cable system. BACKGROUND 2. Pursuant to 614 of the Communications 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 614(h)(1)(C) 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. As for deletions of communities from a station's ADI, 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. 7. 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. MARKET MODIFICATION ARGUMENTS 8. WTBY, WHAI-TV, and WMBC-TV are each assigned to the New York ADI. Adelphia's Ocean County cable system and the communities at issue are also located within the New York ADI. Adelphia's principal headend is located in Toms River, Ocean County which, geographically, lies between New York and Philadelphia. The technical facilities of WTBY, WHAI-TV, and WMBC-TV are approximately 125 miles, 100 miles, and 80 miles, respectively from Adelphia's headend. Adelphia maintains that these stations cannot deliver an adequate over- the-air signal to its principal headend and to deliver an adequate signal, they must use fiber optic cable. 9. In its petition, Adelphia requests that the television markets of WTBY, WHAI-TV, and WMBC-TV be modified for must-carry purposes because Adelphia believes that forced carriage would have a negative impact on its ability to provide desired programming. More specifically, Adelphia states that it has historically carried several Philadelphia stations, not located within the New York ADI, which the operator argues serve the communities in Ocean County. Adelphia contends that mandatory carriage of the three stations at issue in this case would force Adelphia to delete existing programming, such as these Philadelphia stations, particularly in those portions of the system in which all channel capacity is currently being used. The operator argues that replacing the Philadelphia stations with the three stations at issue here would disrupt established viewing patterns, and therefore would be inconsistent with Congressional intent. Adelphia maintains that it currently provides desired coverage to its subscribers because it carries several stations from both the New York and the Philadelphia ADIs that place Grade B contours over the Ocean County communities at issue. In addition, Adelphia maintains that it provides local origination programming that focuses on Ocean County. Adelphia also states that it carries two full-time home shopping networks, HSN and QVC. Adelphia believes that its modification request is justified because none of the four stations at issue provide local programming of interest to the communities in question nor do they satisfy any of the other market factors enumerated in Section 534(h)(1)(C)(ii) of the Communications Act. WTBY 10. With respect to WTBY, Adelphia states that it has never carried WTBY, despite the fact that the station began operation in 1981. Adelphia also argues that the station is geographically distant from the system and does not place a Grade B contour over any part of Ocean County, New Jersey. Adelphia contends that WTBY fails to provide any local coverage of news, sports, or public affairs, and that each of the communities that it seeks to exclude from WTBY's market currently receives local coverage from other sources. As for the fourth statutory factor, Adelphia states that WTBY's market share is not significant in Ocean County because ratings have not been reported by either Nielsen or Arbitron. 11. In its opposition, WTBY argues that because the station is located within the same ADI as Adelphia's Ocean County system, it is entitled to carriage. WTBY contends that Adelphia is subverting the intentions of the Cable Act by attempting to use the ADI market change process to avoid its mandatory signal carriage obligations. The station maintains that through the Cable Act, Congress made clear that it intended for a station's market rights to be determined by its ADI, and not by its geographical distance from a system's headend, its grade B contour coverage, or its history of carriage. Thus, WTBY argues that the distance between Poughkeepsie, WTBY's community of license, and Ocean City is irrelevant. WTBY argues that both the station and the communities at issue are economically linked to the New York ADI, and that Adelphia has not provided any evidence to the contrary. WTBY also argues that neither Adelphia's failure to carry WTBY in the past, nor the operator's carriage of other local stations justifies Adelphia's exclusion of the communities at issue from WTBY's market. Finally, WTBY alleges that Adelphia has singled out WTBY because the station provides religious programming. WTBY maintains that by seeking to delete the communities from WTBY's market, Adelphia is attempting to discriminate against viewers of religious programming. WHAI-TV 12. Adelphia argues that although WHAI-TV began operations in September 1987, Adelphia has never carried the station. In addition, Adelphia states that WHAI-TV's contour coverage map demonstrates that its Grade B contour does not even reach the state of New Jersey. Adelphia also contends that WHAI-TV does not provide local coverage to the communities in the Ocean County system. Adelphia maintains that WHAI-TV's programming consists substantially of home shopping, and that the station described its non-home shopping programming as geared to communities in northern New Jersey, New York and Connecticut. According to Adelphia, all of the Ocean County communities at issue here are located in southern New Jersey. Adelphia also notes that the Nielsen Media Research's 1995 County/Coverage Study indicates that WHAI-TV's viewership is too low to be reported. 13. In its opposition, WHAI-TV argues that Adelphia's petition should be dismissed because the operator's analysis does not support the exclusion of the Ocean County communities from WHAI-TV's market, and because Adelphia has failed to prove that excluding the communities would serve the public interest. According to WHAI-TV, Adelphia's failure to carry the station in the past should not be used to justify exclusion of the communities at issue from WHAI-TV's market. WHAI-TV argues that it was off-the-air from March 1991 through September 1993, in part because of the financial difficulties caused by cable operators' refusal to carry the station in its home market. WHAI-TV maintains that since resuming broadcasting, the station has offered a combination of home shopping, public service, and educational programming. The station states that it presents programming from colleges and universities in New Jersey and other areas. WHAI-TV contends that because it has only recently resumed broadcasting and because it is a specialty station, the station's historic carriage and local viewing patterns provide little insight into the structure of the station's market, and should not be considered by the Commission in determining whether or not to grant Adelphia's petition. WHAI-TV also challenges Adelphia's arguments regarding distance and contour coverage, noting that when Congress outlined mandatory carriage rights in the Cable Act, Congress focused on the ADI market structure, rather than mileage or coverage. Moreover, WHAI-TV notes that the station's provision of local service to the community is more relevant than its geographic distance in this proceeding. According to WHAI-TV, the station is providing a local service to the communities at issue by offering locally-produced public affairs educational and informational programming during weekday prime time hours. WHAI-TV also notes that the Commission has found that local coverage by other stations is immaterial and does not bar another station's ADI claim. Finally, the station argues that granting Adelphia's request will not serve the public interest. WHAI-TV maintains that the ADI modification provisions were designed to facilitate inclusion, not exclusion, of communities in station's markets. WMBC-TV 14. With respect to WMBC-TV, Adelphia states that there is no history of carriage or evidence of local viewing data, despite the fact that the station has been broadcasting for three years. Adelphia maintains that WMBC-TV is geographically distant from the system and does not place a Grade B contour over any part of Ocean County, New Jersey. Moreover, Adelphia claims that WMBC-TV's programming does not include local coverage of interest to Adelphia's subscribers. Adelphia adds that the third statutory factor is satisfied because its subscribers receive local news, sports, public affairs, from other stations carried on the system. Finally, Adelphia notes that Nielsen Media Research's 1995 County/Coverage Study indicates that the station's viewership is too low to be reported. 15. WMBC-TV argues in its opposition that statutory authority establishes a strong presumption that it is entitled to carriage throughout the New York ADI, including Ocean County. WMBC-TV further argues that Adelphia falls short of meeting the heavy burden placed by Congress and the Commission on petitioners that seek to modify the established statutory scheme for mandatory carriage. WMBC-TV maintains that Adelphia is using the ADI modification provisions of the 1992 Cable Act in a manner that contravenes the statute's intent in favor of carriage and is seeking to apply these provisions against struggling independent UHF stations (such as WMBC-TV) that are among those entities the legislation was intended to protect. WMBC-TV argues that it is a fledgling independent UHF television station that brings an alternative, minority-owned voice to the New York broadcast community, exactly the type of station that the mandatory carriage provisions were intended to benefit. WMBC-TV further states that it had been on the air for only two and one-half years when Adelphia filed its petition seeking to eliminate WMBC-TV's mandatory signal carriage rights in Ocean County. WMBC- TV claims that its family-oriented format is intended to offer viewers programs containing less violence and sexual content. Also, as the voting stock is entirely owned by Asian-Americans, WMBC-TV offers not only general interest programming but community-oriented programming and foreign language programming for the New York market's Asian population. 16. Next, WMBC-TV states that it is being carried on only a few systems in the New York ADI, even though it has elected must-carry status throughout its ADI. WMBC-TV then argues that the first and fourth criteria for evaluation of ADI modification request -- historic carriage and audience survey results -- are not applicable in this case because the station is a new market entrant. Regarding the second statutory factor of local coverage, WMBC-TV asserts that Adelphia bases part of its argument on the geographic distances between WMBC-TV's community of license and the headend of the Ocean County system. WMBC-TV asserts that Congress focused on the economic market or ADI in which a station operates, rather than on a mileage test. WMBC-TV then states that advertising competition and programming prices are not a function of geographic indicators or mileage distances; rather, they are dictated by WMBC- TV's existence within the New York ADI. Therefore, WMBC-TV maintains that any decision to modify the ADI as it relates to signal carriage must take into account this wide area of economic competition. In addition, WMBC-TV argues that Adelphia erroneously relies on an outdated contour map from an industry guidebook to determine the station's coverage, ignoring WMBC-TV's recent facilities improvements that have strengthened the station's signal. WMBC- TV also contends that the fact that Adelphia carries other television stations does not justify the exclusion of its system from WMBC-TV's ADI. Moreover, WMBC-TV notes that Adelphia does not provide any evidence that these other stations are serving the local interests of the communities. Finally, the station states that Adelphia's petition does not indicate that the operator will suffer any harm, such as exceeding the statutory complement of must-carry signals designated by the 1992 Cable Act, if forced to carry WMBC-TV. To the contrary, WMBC-TV argues that Adelphia merely contends that mandatory carriage would force it to drop other programming services it prefers. ADELPHIA'S JOINT REPLY 17. In reply, Adelphia states that Congress has recognized that in certain situations, a community in a station's ADI is so far removed from the station, that it cannot be considered part of the station's market. Adelphia further contends that Congress provided that in such cases, an ADI can be adjusted by deleting certain communities. Adelphia argues that the deletion process is particularly applicable to stations like the three at issue here because of their location in the New York ADI. As Adelphia notes, the New York ADI is geographically expansive. Adelphia also argues that the three stations at issue erroneously reject the significance of Grade B contour coverage, and geographic proximity. In addition, Adelphia contends that the stations mistakenly argue that historic carriage and viewership data are irrelevant to them because they are allegedly new stations or provide a specialized format. According to Adelphia, the three stations' positions are inconsistent with Commission rulings in other ADI cases. 18. Adelphia first notes that in a recent case, Time Warner Cable (Ohio) the Commission based its decision to delete six out of fifteen communities from a station's market, on the station's lack of Grade B coverage in those communities and its lack of historical carriage. Adelphia argues that in Time Warner Cable (Ohio), the Commission determined that despite the station's measurable audience viewership and specialized format, combining religious programming with 11.5 hours a week of public affairs programming, the communities should be deleted because the station had not demonstrated sufficient local service. Adelphia also cites two other Commission cases, Greater Philadelphia Cablevision, Inc., and Time Warner Cable (Virginia), in which the Commission found that based on geography and statutory factors, the communities were sufficiently removed from the relevant station and could not be deemed part of the station's market for mandatory carriage purposes. Adelphia maintains that in both of these cases, the Commission cited geographic distance and lack of Grade B contour coverage as reasons for deletion. 19. Adelphia reiterates that in this case, none of the stations provide Grade B contour coverage. Moreover, each of the stations at issue is at least 80 miles from Adelphia's headend. Adelphia also argues that the stations have not demonstrated any local service that establishes their ties to the communities. Adelphia argues that WHAI-TV presents only five hours per week of local programming, and WMBC-TV presents only five and one-half hours weekly of children's programming. Adelphia maintains that in Time Warner Cable (Ohio), the Commission found that twice as much local coverage was still insufficient evidence of local service in the absence of Grade B contour coverage. In addition, two other stations already carried by Adelphia, WHYY (Philadelphia) and WNET (New Jersey) each provides nine or more hours of children's programming per day. Adelphia also argues that WMBC-TV fails to demonstrate that its allegedly community-oriented and foreign language programming is relevant to the communities at issue. Adelphia states further that WTBY does not claim that it provides local service beyond its reliance on specialized format programming. Adelphia maintains that the stations have not provided sufficient evidence of local coverage to overcome their failure to provide Grade B contour coverage. 20. Adelphia also argues that in light of the evidence regarding the stations' markets, their technical limitations and their distance from Adelphia's headend, the stations' lack of historical carriage and low reported viewership are also relevant. Adelphia contends that the absence of viewership data is noncable households is especially noteworthy. According to the operator, if the communities at issue were in the three stations' economic markets, some viewership would be found in noncable households. Adelphia argues that the lack of viewers is particularly significant in the case of WTBY which has been broadcasting for 15 years. Adelphia suggests that the lack of viewership data can be explained by the stations' inability to provide a viewable signal. Adelphia contends that the lack of viewership also results in a lack of advertisers, and undermines the stations' arguments that they are part of the communities' economic market. Adelphia maintains that it has not singled out the three stations for competitive or content reasons. The operator states that it directed its petition at stations in the New York ADI that do not place a Grade B contour over any part of Ocean County. None of the stations are carried by any cable system in Ocean County, nor are they listed in any of the local television programming guides. MARKET ANALYSIS AND DECISION 21. Adelphia's petition will be granted. Based on the geography and the statutory factors, we believe that the Ocean County, New Jersey communities in question are sufficiently removed from WTBY, WHAI-TV and WMBC-TV that they ought not be deemed part of the station's market for mandatory carriage purposes. The evidence before us, which we believe has not been sufficiently disputed by the three stations, distinguishes the communities and persuades us that the action requested would "better effectuate the purposes" of Section 614 of the 1992 Cable Act. We believe Congress enacted Section 614(h) with a deletion provision so that market anomalies such as this one could be properly rectified through the special relief process. 22. As an initial matter, we note that, according to the legislative history of the 1992 Cable Act, the use of ADI market areas is intended "to ensure that television stations be carried in the areas which they service and which form their economic market." Changes may be sought and granted by the Commission "to better effectuate the purposes" of the mandatory carriage requirements. The ADI market change process incorporated into the Communications Act, however, is intended to be a process whereby cable operators may seek relief from the mandatory signal carriage obligations only when a change in the market area involved is warranted. When viewed against this backdrop, and considering all of the relevant factual circumstances in the record, we believe that the operator's deletion petition is a legitimate request to redraw ADI boundaries to make them congruous with market realities. Adelphia's actions do not reflect an intention to evade its signal carriage responsibilities under the 1992 Cable Act and the Commission's rules nor do they evidence a pattern of discriminatory conduct against the stations subject to deletion. 23. We note as a preliminary matter that the cable operators serving communities in the New York ADI recognize that this television market is unusually large in terms of geography and population, and for this reason created the NYI interconnect so that local advertisers can reach as many subscribers as practically possible through the cable television medium. Based on the record and other indicia, we believe that the interconnect was designed to achieve efficiencies in selling advertising time and as a tool in maximizing advertising revenues and does not necessarily reflect a collective viewpoint on the part of these operators that the New York ADI is in fact one uniform and homogenous television marketplace. The interconnect is divided into four sub-zones for advertising purchasing purposes: (1) Northern and Central New Jersey; (2) New York City; (3) Long Island; and (4) Upstate New York/Fairfield County, CT (also including Rockland, Westchester, and other Counties). The region's cable operators appear to have recognized that different demographics and consumer patterns exist within the sub-zones and planned their marketing strategy accordingly. Since the evidence suggests that the interconnect was not intended to mirror a tightly knit ADI, we do not see its existence as supportive of the broadcasters' contention that only a single indivisible market is involved. 24. At the outset, the evidence suggests that WTBY, WHAI-TV and WMBC-TV do not provide local service to the communities in question. The stations do not place either a Grade A or Grade B contour over the cable communities. In addition, we do not believe that it has been shown that the stations carry programming of specific local interest or import for cable viewers in the relevant communities. The schedule information provided by WTBY indicates that the station offers programming of potential general interest but without specific ties to any of the communities at issue in this matter. The station also has no reported audience in the county where the cable communities are located and it has no history of carriage. Similarly, we do not believe that WHAI-TV carries enough programming of specific local interest or import for cable viewers in the relevant communities to fulfill the statutory factor. The amount of programming broadcast by WHAI-TV which has any specific relevance to residents of Ocean County is of a de minimis nature. Moreover, while the station argues that it presents programs from New Jersey universities, it does not explain the relevance of these programs, if any, to Ocean County residents. In the case of WMBC-TV, that station fails to explain how its allegedly community oriented programming is geared to Ocean County subscribers. Finally, WTBY, WHAI-TV and WMBC-TV are geographically distant from the operator, located 120 miles, 100 miles and 80 miles, respectively, from Adelphia's Ocean County headend. The distances involved attenuates any local ties that the stations might have to the cable communities and helps explain why the stations' viewership is too low to be reported. 25. We also believe that Adelphia's carriage of other local television stations provides support for the action requested. Where a cable operator is seeking to delete a station's mandatory carriage rights in certain communities within its ADI, and it is clear that the station is not providing local service to those communities, the issue of local coverage by other stations becomes a factor which we will give greater weight than in cases where a party is seeking to add communities. In this case, there are several television stations carried by Adelphia's system, such as WWOR and other New York City stations, that have stronger ties to the communities and provide more focused local programming than the three stations at issue. 26. Adelphia also demonstrates that WTBY, WHAI-TV and WMBC-TV have no historical carriage on the cable systems in question and no audience in Ocean County. Because the stations are specialized format stations, these facts are not determinative, in and of themselves, of the relationship between the cable communities and the market of the television station, nor should their absence permit a cable operator to undermine the objectives of the mandatory carriage requirement. Here, however, we conclude that the lack of historical carriage and the dearth of audience is of evidential significance when linked with other information regarding the market, including lack of Grade B coverage, geographic distance, and the absence of noncable audience share in the relevant communities. In these circumstances, we cannot discount the stations' existing carriage and audience as proper indicators of the scope of its market area. 27. This is not a situation where the carriage pattern suggests that a station is logically part of the market for carriage purposes but has not been carried for competitive reasons. Nor do we believe that the operator has impermissibly singled out one station from among other similarly situated stations as the sole station it has declined to carry. Given these facts, the operator's deletion petition appears to be a legitimate request to redraw ADI boundaries to make them congruous with market realities. 28. Since we are granting Adelphia's petition to delete the relevant New Jersey communities from the ADI of WHAI-TV for mandatory carriage purposes, the associated complaint filed by WHAI-TV for mandatory carriage on Adelphia's Ocean County systems is rendered moot by this decision. ORDERING CLAUSES 29 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-4669-A) filed January 26, 1996 by Adelphia Cable Communications, Ocean County, New Jersey IS GRANTED. 30. IT IS FURTHER ORDERED, that the petition (CSR-4647-M) filed January 11, 1996, by ValueVision International, Inc., IS DISMISSED without prejudice. 31. 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