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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In re: ) ) Marks CableVision and TCI ) CSR-4884-A CableVision of California ) ) For Modification of the ADI of ) Television Broadcast Station KHIZ, ) Barstow, California ) ) Complaint of Sunbelt Television, Inc. ) CSR-4860-M against TCI CableVision of California ) ) Request for Carriage ) MEMORANDUM OPINION AND ORDER Adopted: April 29, 1997 Released: May 2, 1997 By the Deputy Chief, Cable Services Bureau: INTRODUCTION 1. Marks CableVision and TCI CableVision of California, Inc. ("Petitioners"), filed the above-captioned petition for special relief (CSR-4884-A) seeking to modify the Los Angeles, California Area of Dominant Influence (ADI) relative to television broadcast station KHIZ (Ind., Ch. 64), Barstow, California. Specifically, Petitioners request that KHIZ be excluded, for purposes of the cable television mandatory broadcast signal carriage rules, from their cable systems serving communities in and around San Bernardino, California. KHIZ filed an opposition to this petition to which Petitioners replied. In a separate but related proceeding, KHIZ filed a must carry complaint against TCI CableVision (CSR-4860-M) for carriage on TCI's San Bernardino County system. We will jointly consider these cases to resolve the signal carriage rights of KHIZ on Petitioners' cable systems. 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 market areas. Section 614(h)(l)(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 1992 Cable Act provides that: the Commission shall afford particular attention to the value of localism by taking into account such factors as - (I) whether the station, or other stations located in the same area, have been historically carried on the cable system or systems within such community; (II) whether the television station provides coverage or other local service to such community; (III) whether any other television station that is eligible to be carried by a cable system in such community in fulfillment of the requirements of this section provides new 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 in 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 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 demon- strated 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 market, 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. MODIFICATION ARGUMENTS 8. The communities here in question are located in San Bernardino and Riverside Counties, California and are part of the Los Angeles, California ADI. Barstow, California, the city of license of KHIZ, is also a part of the same ADI. 9. In support of its petition, Petitioners state that their systems are geographically distant from KHIZ's city of license, Barstow, California. The petitioners also point out that the relevent systems and the station are separated by the San Bernardino and the San Gabriel Mountain ranges. Petitioners maintain that due to this separation, KHIZ has never been able to deliver an adequate over-the-air signal to its systems and, therefore, has never been carried, despite being on-the-air since 1987. Moreover, Petitioners continue that KHIZ provides no local programming relevant to residents in San Bernardino County. Indeed, Petitioners state that they were unable to identify any "local coverage" programming relevant to their systems' communities. Petitioners argue that the local stations it currently carries, along with their local origination channels, provide a significant amount of coverage of local news and events of interest to its subscribers. Finally, Petitioners state that KHIZ has no appreciable audience in the Los Angeles market. In a study conducted by Media Strategies, Petitioners maintain that KHIZ garners truly minuscule ratings in both cable and noncable households in San Bernardino. For the above reasons, Petitioners argue that the Commission should grant the requested modification. 10. In its opposition, KHIZ states that since it has determined that it is able to provide a good quality signal to Petitioners' headends, as required by 76.55(c)(3) of the rules, the filing of Petitioners' modification request is clearly an attempt to avoid its must carry obligations and should be rejected. It argues that the systems' communities are, by definition, part of KHIZ's market. In any event, KHIZ states that it provides coverage and local service to Petitioners' communities. KHIZ points out that Marks CableVision's headend is only 30.82 miles from the station's transmitter site at Victorville, California, while the TCI's headend is only 37.57 miles away. Moreover, KHIZ points out that the communities of Rancho Cucamonga and San Bernardino (served by Marks CableVision) and Redlands, East Highland, Colton, Rialto and Highgrove (served by TCI) all fall within KHIZ's predicted Grade A contour and the TCI community of Beaumont falls within the station's predicted Grade B contour. KHIZ asserts that the Commission has stated that "Grade B service demonstrates service to cable communities and serves as a measure of a station's natural economic market." KHIZ argues that the mountain ranges do not pose either a geographic or economic "barrier" and the Commission has recognized that even in cases where reception is currently difficult due to terrain obstacles "[t]his, however, does not negate the fact that [such] communities are within the area [such] stations have been licensed to serve." KHIZ argues, therefore, that it is entitled to establish translator and booster stations within its predicted service area to cure any signal deficiencies to the public and should be permitted to utilize TV relay service to provide a signal to cable systems in order to establish "must carry rights." KHIZ maintains that the San Bernardino economic and "High Desert" regions are connected by interstate highways, and that both the communities of Victorville and Barstow are considered to be part of the "Inland Empire." KHIZ asserts that numerous radio stations serve both regions. KHIZ further asserts that "High Desert" residents make principal use of Riverside and San Bernardino newspapers; are dependent on those same areas for jobs; and 98,000 motorists travel between the two regions daily. 11. With regard to historical carriage, KHIZ argues that the Commission has previously stated that the fact that a station has not been carried is not determinative of its must carry status, and that the 1992 Cable Act was designed to remedy past discriminatory signal practices. In any event, KHIZ contends that its lack of carriage should not be construed to be the result of the station's location, but rather simply due to the fact that, until recently, it could not technically provide an adequate over-the-air signal. Further KHIZ argues that while Petitioners appear critical of the fact that its signal does not enjoy "high" ratings, it maintains that it was not Congress' intention to delete stations from their home markets solely because of low viewership. In addition, KHIZ states that any weight that can be attributed to Petitioners' carriage of other local stations is minimal since KHIZ is providing service to the systems' communities as evidenced by coverage of its Grade A and Grade B contours and the programming that it provides which is responsive to the needs and interests of residents throughout San Bernardino County. 12. Petitioners argue in reply that KHIZ fails to rebut any of the arguments they raise in their petition and the four-part statutory test for market modification fully supports their request. Moreover, Petitioners assert that KHIZ has failed to establish a nexus between it and the systems' communities and this is confirmed by letters from local government officials in San Bernardino and Rancho Cucamonga. Further, Petitioners point out that while KHIZ make much of the fact that its predicted Grade B contour encompasses the communities, that fact is inconsistent with reality. Petitioners maintain that since KHIZ has never placed a usable signal over the mountains, the simple fact is that KHIZ fails to place an actual Grade B contour over the communities because of the distance and geographic barrier separating the communities and KHIZ. Finally, Petitioners argue that KHIZ's exhaustive efforts to explain the interest of "High Desert" residents in the San Bernardino region are decidedly one-sided as it fails to explain why coverage of events in the "High Desert" region would be of interest to the residents of the San Bernardino County communities herein. 13. In a response to Petitioners' reply, KHIZ states that, despite Petitioners' assertions, it is not intending to transform itself into a "regional `super station'," but merely is seeking carriage on those communities within its Grade A and Grade B contours. Moreover, KHIZ argues that the only admission it has made is that it does not place a "good quality signal" over the headends of the cable systems in question. Therefore, it maintains that Petitioners' statement that "KHIZ admits it never has placed a usable signal over the mountains" is misleading. In addition, KHIZ contends that Petitioners submit no supporting evidence to justify their argument that "KHIZ fails to place an actual Grade B [signal] over the Systems' communities." In any event, KHIZ states that Grade A and Grade B contours are, by definition, estimations based upon F (50,50) curves. Finally, KHIZ points to the fact that the systems' headends are closer to KHIZ than to the Los Angeles stations they predominantly carry. MUST CARRY ARGUMENTS 14. In its must carry complaint, KHIZ states that it initially requested carriage on TCI's systems in letters dated September 28, 1996, which TCI received on October 3, 1996. Subsequently, on October 14, 1996, KHIZ states that it supplemented its letter to detail the station's planned signal delivery system. Although TCI was required to respond by November 2, 1996, KHIZ states that TCI failed to do so. KHIZ filed the instant complaint on November 6, 1996. 15. In support of its request, KHIZ states that it is a qualified local commercial television station with respect to TCI. KHIZ notes that the communities in question are all located in the Los Angeles ADI, including Barstow, California, KHIZ's city of license. KHIZ further notes that it is not considered a distant signal under the cable compulsory license with respect to TCI and that it is able to provide a good quality signal to TCI's headend. KHIZ states that TCI's systems have from 41 to 74 activated channels, yet each system is only carrying 16 qualified local commercial television stations (12 in the case of the Redlands' system). Because each system is carrying less than its quota of qualified local commercial television stations required by the Commission's Rules, KHIZ argues that TCI is required to carry the station. KHIZ states that it is capable of providing TCI with a good quality signal by means of a microwave relay from KHIZ's main transmitter in Victorville, California to an existing tower site on Paivika Peak, from which the station's signal will be fed to TCI's systems' principal headends. KHIZ is willing to bear the cost of acquiring and installing the necessary equipment to implement this signal delivery system. KHIZ further states that it has asserted its carriage rights in a timely fashion, citing the Commission's Clarification Order. KHIZ supplemented its petition on November 19, 1996, noting that TCI responded to KHIZ's September 28 letter on November 9. KHIZ states that TCI's reply merely noted that KHIZ was not yet delivering a sufficient signal to TCI, without committing to carry the station once a good quality signal is delivered. 16. In opposition to KHIZ, TCI first states that it did respond to KHIZ in a timely fashion on November 1, 1996. TCI further states that at no time has TCI informed KHIZ that it was denying carriage of the station and, in fact, has asked KHIZ to contact TCI to resolve the station's signal strength problem. TCI argues that it need not commit to carry KHIZ until KHIZ provides a good quality signal to TCI. Finally, TCI states that it will seek in a separate petition to modify the ADI of KHIZ, on which KHIZ's claim to carriage is based, maintaining that KHIZ does not provide programming to meet the needs and interests of TCI's subscribers, and lacks a significant nexus to the communities. 17. In reply to TCI, KHIZ contends that TCI's letter of November 1 merely responded to the station's carriage election notice and was not even sent to the signatory of the station's demand for carriage. KHIZ states that on November 26, 1996, a day prior to the day TCI filed its opposition, technical representatives from KHIZ and TCI met and jointly tested KHIZ's signal delivery system, and found that KHIZ delivered a sufficient signal (-37 dBm) to TCI. KHIZ further states that installation and activation of the necessary equipment at TCI's headend can occur immediately. KHIZ asserts that TCI has informed KHIZ that TCI does not wish to preempt a non-must-carry service to accommodate KHIZ. Accordingly, KHIZ argues that it is entitled to a Commission order requiring TCI to commence carriage of the station once KHIZ installs and activates the necessary equipment to provide a good quality signal. DISCUSSION 18. We are not persuaded by the arguments raised by Petitioners herein. With regard to the first criteria which deals with historic carriage on a cable system, we note that Section 614 of the Communications Act of 1934, as amended, was adopted in part to cure past discriminatory signal carriage practices. Where, as is the case here, a petitioner seeks to delete a station from a relevant ADI with respect to a cable system, we believe that failure to establish historic carriage should not, by itself, be given determinative weight. KHIZ's lack of carriage, specialty station type programming format, and its previous inability to provide a viewable signal explain why its ratings are low in the relevant cable communities. Congress could not have intended for stations to have cable communities deleted from their markets solely because their audience shares are not as significant as those of several other stations with which they compete. 19. Although the factors recited by Petitioners do weigh in favor of their request, we find that other factors deserve more weight. KHIZ's transmitter is located, on average, only 34 miles from the systems' headends and its predicted Grade A contour encompasses all but one of the communities. While the San Bernardino and San Gabriel Mountains are between KHIZ and the cable systems in question, it does not appear from the evidence herein, including in particular the distances involved, that they present a market barrier. The evidence before us indicate that there are significant cultural and economic connections between KHIZ and the San Bernardino-Riverside area. With respect to KHIZ's status as a home shopping station, we note that the Commission has found that such stations qualify as local commercial television stations for purposes of cable carriage. Consequently, based upon the above, we find that Petitioners have failed to carry their burden of establishing that the public interest would be served by deleting KHIZ from the Los Angeles ADI as it relates to carriage on Petitoners's cable systems. 20. Turning to KHIZ's signal carriage complaint against TCI, having found that grant of Petitioners' petition for market modification is not warranted, we find no issue remaining. Although KHIZ does not yet provide a sufficient off-air signal to TCI's principal headend, TCI has conceded that it would carry KHIZ at such time as KHIZ provides a good quality signal. KHIZ has stated that, using specialized equipment and a microwave relay system, it can deliver signal strengths well within Commission criteria. KHIZ has stated that it will provide, at its own expense, the necessary specialized equipment to ensure a good quality signal. We find, therefore, that KHIZ is a qualified UHF station entitled to carriage on TCI's system serving Beaumont, Colton, East Highland, Highgrove, Redlands and Rialto, California. ORDERING CLAUSES 21. 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 (CSR-4884-A) filed on behalf of Marks CableVision and TCI CableVision of California, Inc. IS DENIED. 22. IT IS FURTHER ORDERED, that the complaint filed on behalf of KHIZ (CSR- 4860-M) against TCI's systems IS GRANTED. TCI Cablevision of California, Inc. IS ORDERED to commence carriage of KHIZ sixty (60) days after KHIZ installs the equipment necessary to provide a good quality signal to TCI's principal headend. KHIZ shall notify the relevant cable systems in writing of its carriage and channel position elections (76.56, 76.57, and 76.64(f) of the Commission's Rules) within thirty (30) days of providing a good quality signal. 23. 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