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A. 1. a.(1)(a) i) a) 1. 1. i.(1)(a)(i) 1) a)#Xw PE37XP#  #Xj\  P6G;9XP#   m C $//Denial of Time Warner's petition for special relief, DA 96307 //$ $//Grant of KLTJ's must carry complaint//$ $/300.534 Carriage of local commercial television signals/$ $/76.7 Special relief and mustcarry complaint procedures/$  X-$/76.59 Modification of television markets/$T Ã +2Before the [ FEDERAL COMMUNICATIONS COMMISSION  XH-Washington, D.C. 20554 ă  X -`(# DA 96307 ă  X -In re Petition of: hh@) x` `  hh@)  X -Petition of Time Warner Cablehh@)hhCSR4586A(#  X -Harris County, TX hh@) hpp  X -Ft. Bend County, TXhh@)  X-Brazoria County, TX  hh@) x` `  hh@)  Xb-For Modification of ADIhh@)  XK-Station KLTJ(TV), Galveston,TXhh@)h x` `  hh@)  X-In re Complaint of: hh@) x` `  hh@)  X-GO, Inc. (KLTJ(TV))hh@)hCSR4597M  X-Galveston, TX hh@) x` `  hh@)  X-For Carriage on Time Warner Cable@)  X-Houston, TX` `  hh@)  XN-  MEMORANDUM OPINION AND ORDER ă Adopted: March 4, 1996 Released: March 20, 1996 By the Cable Services Bureau:  X#- INTRODUCTION ă  XQ%-x1.` ` Before the Commission is a petition for special relief filed by Time Warner Cable ("Time Warner" or "operator") seeking to modify the Houston, Texas "area of":&0*(($"  X-dominant influence" ("ADI") and to exclude itself from KLTJ(TV)'s television market._ Xy-#Xj\  P6G;9XP#э The particular communities affected by this petition include Bellaire (TX 0302); Brazoria County (TX 0982); Bunker Hill Village (TX 0399); Fort Bend County (TX 0776); Harris County (TX 0623); Hedwig Village (TX 0410); Hillshire Village (TX 0401); Houston (TX 0676); Hunters Creek Village (TX 0415); Jersey Village (TX 0622); Meadows (TX 2181); Missouri City (Harris TX 0613); Missouri City (Ft. Bend TX 0614); Piney Ft. Village (TX 0459); Southside Place (TX 0396); Spring Valley (TX 0400); Stafford (TX  X-0616); and West University Place (TX 0395)(collectively known as the "communities").#Xw PE37XP# GO, Inc. ("GO"), licensee of television station KLTJ(TV)(Ch. 22), Galveston, Texas, filed an opposition to the petition to which Time Warner replied. TCITKR of Houston, Inc. filed comments in support of the petition for special relief. GO Inc. also filed a separate must carry complaint against Time Warner affecting the same cable communities, to which Time Warner filed a response. We will jointly consider and resolve these two proceedings as they involve the same facts and circumstances.  Xv-  X_- "BACKGROUNDÃ  XH-    X1-x2.` ` Pursuant to 614 of the Communications Act and implementing rules adopted  X -by the Commission in its Report and Order in MM Docket 92259,r K X-#Xj\  P6G;9XP#э 8 FCC Rcd 2965, 29762977 (1993).r commercial television broadcast stations are entitled to assert mandatory carriage rights on cable systems located  X -within the station's market. A station's market for this purpose is its "area of dominant  X -influence" or ADI as defined by the Arbitron audience research organization.a  X-#Xj\  P6G;9XP#э Section 614(h)(1)(C) of the 1992 Cable Act specifies that a broadcasting station's market shall be determined in the manner provided in 73.3555(d)(3)(i) of the Commission's Rules, as in effect on May 1, 1991. This section of the rules, now redesignated 73.3555(e)(3)(i), refers to Arbitron's ADI for purposes of the broadcast multiple ownership rules. Section 76.55(e) of the Commission's Rules provides that the ADIs to be used for purposes of the initial implementation of the mandatory carriage rules are those published in  X-Arbitron's 19911992 Television Market Guide. 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 homemarket stations receive a preponderance of total viewing hours in the county. For purposes of this calculation, both overtheair and cable television viewing  XM-are included.M X#-#Xj\  P6G;9XP#э Because of the topography involved, certain counties are divided into more than one sampling unit. Also, in certain circumstances, a station may have its home county assigned to an ADI even though it receives less than a preponderance of the audience in that county. For  X&-a more complete description of how counties are allocated, see Arbitron's Description of  Xm'-Methodology."M"0*(( "Ԍ X-ԙx3.` ` Under the Act, however, the Commission is also directed to consider changes in market areas. Section 614(h)(1)(C) provides that the Commission may: Xxwith 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: Xxthe Commission shall afford particular attention to the value of localism by taking into account such factors as  XxX` ` (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;x` XxX` ` (II) whether the television station provides coverage or other local service to such community; ` XxX` ` (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 ` XxX` ` (IV) evidence of viewing patterns in cable and noncable households within the areas served by the cable system or  X-systems in such community. X -#Xj\  P6G;9XP#э Communications Act of 1934, as amended, 614(h)(1)(C)(ii), 47 U.S.C. 534(h)(l)(C)(ii).x`  Xe-x4.` ` The legislative history of this provision indicates that: Xxwhere 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.  T   * * * * *TP"#b0*((e""ԌXx` ` [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  X-market. X-#Xj\  P6G;9XP#э H.R. Rep. No. 628, 102d Cong., 2d Sess. 97 (1992).   Xv-x5.` ` The Commission provided guidance in its Report and Order in MM Docket 92 Xa-259, supra, to aid decision making in these matters, as follows: XxFor example, the historical carriage of the station could be illustrated by the  X -submission of documents listing the cable system's channel lineup (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  X -community or is located close to the community in terms of mileage. xxCoverage of news or other programming of interest to the community could be demonstrated by program logs or other descriptions of local program offerings.  X-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  X-concerning viewing in cable homes.zy X -#Xj\  P6G;9XP#э 8 FCC Rcd at 2977 (emphasis in original).z   X-x6.` ` In adopting rules to implement this provision, the Commission indicated that changes requested should be considered on a communitybycommunity basis rather than on a countybycounty basis and that they should be treated as specific to particular stations rather  Xm-than applicable in common to all stations in the market.hm* XH -#Xj\  P6G;9XP#э 8 FCC Rcd at 2977 n.139. Viewership data cited herein is county data, rather than communityspecific data. However, absent evidence that such data is not fairly reflective of viewing in the actual communities in question, we accept such data as probative in cases of this type.h The rules further provide, in accordance with the requirements of the Act, that a station not be deleted from carriage during  X?-the pendency of a market change request.e ? X&-#Xj\  P6G;9XP#э 47 C.F.R. 76.59.e "(G 0*(("ԌG MARKET MODIFICATION  X-x7.` ` In its petition for special relief, Time Warner requests that the television market of KLTJ(TV) be modified so as to relieve it from any obligation to carry that station on the system which serves communities located in Harris, Ft. Bend, and Brazoria Counties, Texas. Time Warner believes that it should be granted the requested relief because the station does not provide local programming to the communities in question and fails to satisfy any of the four market factors set forth in the 1992 Cable Act and the Commission's rules. As an initial matter, Time Warner explains that although KLTJ(TV) is licensed as a noncommercial educational television station, it is not qualified for carriage as such under Section 615 of the Cable Act because it is not eligible to receive community service grants from the Corporation for Public Broadcasting; as such, KLTJ(TV) is subject to carriage in the same manner as a commercial television station, and thus is subject to modification of its ADI as well.  X -x8.` ` With regard to the historical carriage factor, the operator asserts that KLTJ(TV) has never been carried on the system although it has been ontheair since 1989. The operator states that the system would have voluntarily carried KLTJ(TV) if the station's programming would have increased the value of the channel lineup or there was subscriber demand. Moreover, no other local cable operator carries KLTJ(TV)'s signal. Second, petitioner alleges that KLTJ(TV), through its broadcast of religious programming, does not provide local service to the relevant communities. According to Time Warner, the station's weekly programming shows little commitment to covering "purely" local events in the cable communities as it does not air any traditional local news programs or coverage of any local sporting events. Furthermore, the one show that ostensibly covers local issues, "Chat with Pat", is broadcast for only one hour per week and are often repeats of old programs. Referring to the third factor, Time Warner states that several Houston area ADI stations, which have been carried for several years on the cable system, provide extensive local programming throughout each  X-programming day.Y  X -#Xj\  P6G;9XP#э The local stations carried by the System include: KPRC (Ch. 2NBC); KUHT (Ch. 8PBS); KRIV (Ch. 26FOX); KHOU (Ch. 11CBS); KTRK (Ch. 13ABC); KTXH (Ch. 20UPN); KHTV (Ch. 39Ind.); KTFH (Ch. 49Ind.); KXLN (Ch. 45Ind.); KTMD (Ch. 48Ind.); and KNWS (Ch. 51Ind.)Y Time Warner also mentions that it meets local community concerns through its carriage of educational and public access channels as well as the Weather Channel. Finally, the operator alleges that KLTJ(TV) has insignificant viewing in the area, with the 1995 Nielsen County Coverage Report showing that KLTJ(TV) did not meet the minimum reporting standards in Harris and Brazoria counties; in Fort Bend County, only 1% of the TV households viewed the station at least one quarterhour during the average day, and only 3% of the TV households viewed the station during at least one quarterhour in the course of an average week.  X -x9.` ` In support of Time Warner's petition, TCITKR first states that it too provides cable service to and around Houston, including the City of Houston, and the counties of"!4 0*(( " Montgomery, Harris, and Brazoria, Texas. TCITKR supports Time Warner's petition for all the reasons stated therein. TCITKR asserts that KLTJ(TV) has never been carried on its Houston area systems. TCI states that although KLTJ(TV) provides Grade B coverage over the cable communities it serves, this fact should be ignored as the station does not provide programming of local interest. In conclusion, TCI argues that because the 1992 Cable Act treats market modifications as being communityspecific, any relief granted to Time Warner would necessarily apply to TCI in those communities served by both cable operators, including the City of Houston and surrounding counties.  X1-x 10.` ` In opposition, KLTJ(TV) first states that the instant petition is apparently Time Warner's response to its August 7, 1995 letter requesting carriage on its system. KLTJ(TV) then recites the following factual information: (1) the station is licensed to Galveston, Texas, which is located approximately 45 miles southeast of Houston (centertocenter) in Brazoria County; (2) the station operates with maximum ERP of 5,000 kilowatts with an antenna height above average terrain of 566 meters from a transmitter site approximately 30 miles south of Houston; and (3) the station places a predicted City Grade contour over virtually all of the City of Houston. KLTJ(TV) also admits that it does not qualify for carriage as a noncommercial television station and thus its market is subject to modification.  XK-x 11.` ` As for the four statutory factors, KLTJ(TV) first raises the point that the Commission denied a similar request made by Time Warner to delete television station KHSH, a home shopping station licensed to Alvin, TX, from the Houston ADI. KLTJ(TV)  X-asserts that the precedent set forth in that case is equally applicable to this one.  X-#Xj\  P6G;9XP#э See Time Warner Cable, 10 FCC Rcd 6663 (1995). With regard to statutory factor 2, KLTJ(TV) states that, contrary to the assertions made by Time Warner, it carries an abundance of locally produced programming, currently on the order of 50 or more hours per week. The station argues it is far more than a conduit for syndicated religious programming as it also airs locally produced programming addressing the informational and  X-other needs of Vietnamese, AfricanAmerican, and Spanish residents in the area. { X-#Xj\  P6G;9XP#э KLTJ asserts that Time Warner is wrong in assuming that the only local programming carried by the station is reflected in the quarterly report of issuesrelated programming; if the operator had adequately reviewed KLTJ's program schedule, which was attached to its petition for special relief, it would have seen the number of Spanish language programs currently carried. In summary, KLTJ(TV) asserts that Time Warner's petition is based largely upon mischaracterization of its programming, coupled with a legal theory which had been rejected by the Commission in the same television market months ago. As such, the petition must be denied.  X -x 12.` ` In its reply, Time Warner first asserts that it has responded to KLTJ(TV)'s August 7, 1995 request for carriage by filing the instant petition for special relief. With" 0*((" regard to KLTJ(TV)'s reliance on the KHSH case, Time Warner argues the Commission precedent is inapplicable because it involved a different television station broadcasting entirely different programming. In addition, KHSH's city of license was only 13 miles south of Houston while KLTJ(TV)'s city of license is approximately 45 miles southeast of Houston. Moreover, the operator argues that the reasoning in that case is flawed because the Commission ignored KHSH's lack of historical carriage as well as and weight that should be given to low viewership, even when the station in question is considered to be a specialty station. Time Warner argues that the 1992 Cable Act itself does not limit consideration of any of the four prescribed factors to only request for the addition of stations in a market and argues that all four statutory factors are applicable here. As for the provision of local programming by other area stations, the operator argues that this statutory factor is relevant to the analysis because it allows specific communities to be excluded from the ADI of a station which provides little or no local service to those communities in comparison to local programming available from other stations carried by the cable system. Finally, the operator argues that KLTJ(TV) has failed to show how its locallyproduced religious programming addresses the specific needs and concerns of the Houston community as opposed to addressing more global and general religious issues.  Xb-x 13.` ` As a preliminary matter, we note that KLTJ(TV) is licensed as a noncommercial educational television station ("NCE"). However, KLTJ(TV) is not considered a "qualified" NCE station under Section 615(l)(1) of the 1992 Cable Act or Section 76.55(a) of the Commission's rules because it is not eligible to receive a community service grant from the Corporation for Public Broadcasting, a point that the station does not  X-dispute.  Xh-#Xj\  P6G;9XP#э  If KLTJ(TV) were a qualified NCE station, its carriage rights would be determined by its proximity to the cable operator's principal headend or by its Grade B contour coverage,  X<-not by reference to areas of dominant influence as defined by Arbitron. See 47 C.F.R. 76.55(b). Nevertheless, we have held that nonqualified NCEs should be treated as default  X-commercial stations under the must carry rules.8 X-#Xj\  P6G;9XP#э See Reconsideration Memorandum Opinion and Order in MM Docket 92259, 9 FCC Rcd 6723 at para. 11 (1994). Consequently, KLTJ(TV), like commercial television stations, is subject to a deletion request by a cable operator such as Time Warner.  X-x 14.` ` Turning to the merits of this petition, we deny Time Warner's deletion request because the operator has not provided persuasive evidence that the communities in question are not part of KLTJ(TV)'s market based on the four statutory or any other relevant factors. 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. Here the arguments presented by the petitioner do not assist us in deciding whether a change is appropriate whether particular communities should be included or"0*((" excluded from the market but rather are directed more generally to whether carriage of the signal of KLTJ(TV) can be avoided because of its program content, regardless of the specific location of the cable communities. In this case it appears that the operator is simply seeking to avoid the statutory requirements because it filed its deletion petition based on KLTJ(TV)'s programming format. In this regard, Time Warner's request is similar to a request previously  X-denied involving the Houston market area. X-#Xj\  P6G;9XP#э See Time Warner Cable of Houston, 10 FCC Rcd 6663 (1995)(denying deletion of Houston area home shopping station KHSH). Our decision is buttressed by the fact that Time Warner's cable operations are scattered throughout the City of Houston but its arguments do not distinguish among them even though they are not uniformly distant in terms of geography from the television station in question. Nor can it be shown that there are technological impediments which prevent the station's signal from being received at any of the operator's several headends.  X -x15.` ` Focusing on the specific factors referenced in the statute, we are unable to find merit in Time Warner's arguments. With respect to the question of historical carriage patterns, Time Warner states that it has never carried KLTJ(TV)'s signal. We believe that the historical carriage factor is not controlling in these circumstances because the 1992 Cable Act would, in effect, prevent religious and other specialty stations which cable systems had previously declined to carry, from ever being carried. We note that the 1992 Cable Act was adopted in part to cure past discriminatory signal carriage practices and to grant the deletion request in this instance would obviate Congressional intent.  X-x16.` ` We also find that, contrary to the belief of Time Warner, KLTJ(TV) does provide local coverage and service to the cable communities. We initially note that Commission records show that KLTJ(TV) places a City Grade contour over the City of Houston and at least a Grade B contour over the other cable communities. We have previously held in a similar case in the Houston ADI that such coverage is an indication of  X-local service.d X-#Xj\  P6G;9XP#э See Id citing In Re Applications of PZ Entertainment Partnership, L.P., 6 FCC Rcd  X-1240, 1243 at para. 13 (1991). See also 47 C.F.R. 73.685. The fact that KLTJ(TV) provides a religious and ethnic programming service of particular interest to discrete segments of the population does not suggest that local service is not being provided.  XN-x17.` ` Furthermore, we do not believe that Time Warner's carriage of other local stations is sufficient, in this instance, to justify exclusion of its systems from the above  X -referenced communities.s  X$-#Xj\  P6G;9XP# That other ADI licensees do in fact provide coverage of and service to the communities in question is not to the contrary. We do not believe that Congress intended this criterion to operate as a bar to a station's ADI claim, in every instance, whenever other stations could also be shown to serve the communities at issue; rather, this criterion has the"'0*(('"  X-effect of enhancing a station's claim where it could be shown that other stations do not serve the communities at issue. s Time Warner has not adequately demonstrated why it is necessary" d0*((\" to remove itself from its own ADI, visavis KLTJ(TV), yet remain in the same market with regard to the station's competitors. We find that Time Warner's Petition is inconsistent with Congressional intent which states that the market modification policy was not provided as a  X-means for cable systems to avoid their must carry obligations.d X-#Xj\  P6G;9XP#э H.R. Rep. No. 102628, 102d Cong. 2nd Sess. at 97. ĉ  X-x18.` ` Finally, we find Time Warner's arguments regarding KLTJ(TV)'s lack of ratings to be unpersuasive. We recognize that religious stations ( also known as "specialty stations"), are capable of "offer[ing] desirable diversity of programming . . . ," yet typically  XH-attract limited audiences.H X-#Xj\  P6G;9XP#э First Report and Order in Docket 20553, 58 FCC 2d 442, 452 (1976), recon. denied, 60 FCC 2d 661 (1976). We continue to believe, as the Commission did in its specialty station rules, that the fact that such stations attract a smaller audience share must be taken into account in determining the equities concerning a station's right to cable carriage.  X -x19.` ` In light of the above we also reject TCITKR's argument that its operations in the areas served in common with Time Warner be removed from KLTJ(TV)'s markert area. In its filing in support of Time Warner's petition, TCITKR did not provide sufficient evidence for the Commission to conclude that KLTJ(TV) is not part of the Houston market served by its cable systems.  Xb- MUST CARRY COMPLAINT  XK-T ă  X4-x20.` ` KLTJ(TV) begins its must carry complaint by explaining that Time Warner, in an April 30, 1993 correspondence, stated that the station was distant for copyright purposes and that copyright liability attributable to carriage of KLTJ(TV) would be $38,875. KLTJ(TV) asserts that it did not pursue its carriage rights on Time Warner's system at that time because of the increased copyright liability; the station, however, renewed its must carry request by letter on August 7, 1995 after recognizing that Congress eliminated the copyright indemnification requirement through a 1994 amendment to Section 111 of the Copyright Act. KLTJ(TV) states that Time Warner has not responded to that letter and has not challenged the station's legal right to carriage; instead, Time Warner filed a petition for special relief seeking the removal of the communities served by its system from KLTJ's television market.  X7-x21.` ` In response to KLTJ(TV)'s must carry complaint, Time Warner argues that the station is not entitled to carriage because the station does not provide local service to the communities served by its cable system. Time Warner argues that its petition for special relief constituted a response to the station's must carry request because it: (1) was submitted in writing; (2) notes the reasons why Time Warner is not legally obligated to carry" 0*((" KLTJ(TV)'s signal; (3) was submitted within 30 days of receipt of KLTJ(TV)'s carriage request; and (4) was served upon KLTJ(TV). The operator also asserts that because the system has never carried the station, it is not required to add KLTJ(TV) on a temporary basis while its market modification is pending. Time Warner states that maintaining the status quo of its channel lineup is the least disruptive approach for subscribers as it would have to drop an existing service to accommodate KLTJ(TV) on a temporary basis on those portions of the cable system which have not been upgraded.  XH-x22.` ` We will grant KLTJ(TV)'s must carry complaint. Time Warner did not demonstrate that KLTJ(TV) is not a qualified local commercial television signal in either its market modification petition or its response to the must carry complaint; the operator, therefore, is required to carry the station's signal on its Houstonarea cable system.  X -   ORDERING CLAUSES ă  X - x23.` ` Accordingly, IT IS ORDERED, pursuant to 614(h) 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" (CSR4586A) filed September 6, 1995, by Time Warner Cable of Houston, Inc. IS DENIED.  X4-x24.` ` IT IS FURTHER ORDERED, that the petition (CSR4597M) filed October 4, 1995, by GO, Inc., IS GRANTED. Time Warner Cable is therefore required to carry the signal of KLTJ(TV) on its system serving the aforementioned communities. GO, Inc. shall notify Time Warner 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  X-Memorandum Opinion and Order. Time Warner shall come into compliance with the applicable rules within sixty (60) days of such notification.  X~-x25.` ` These actions are taken pursuant to authority delegated by 0.321 of the Commission's Rules. x` `  FEDERAL COMMUNICATIONS COMMISSION x` `  William H. Johnson  X"-x` `  Deputy Chief, Cable Services Bureau    Yj$-x#Xw PE37XP# x