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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 Matter of Petition of ) ) Time Warner Cable ) CSR 4917-A ) For Modification of Market of Television ) Station WGOT-TV, Merrimack, New Hampshire ) MEMORANDUM OPINION AND ORDER Adopted: May 9, 1997 Released: May 13, 1997 By the Deputy Chief, Cable Services Bureau: I. INTRODUCTION 1. Time Warner Cable filed a petition pursuant to Sections 76.7(a) and 76.59(a) of the Commission's rules requesting that sixteen communities in Middlesex, Norfolk, Plymouth, and Worcester County, Massachusetts ("the Communities") served by its cable system be excluded from the television market of station WGOT-TV, Merrimack, New Hampshire. Paxson Boston License, Inc. ("Paxson"), licensee of WGOT-TV, filed an opposition to the petition, and Time Warner Cable filed a reply. II. BACKGROUND 2. Pursuant to Section 614 of the Communications Act of 1934, as amended by the 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. The Commission is also directed to consider changes in market areas. Section 614(h)(1)(C) further 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, Section 614(h)(1)(C)(ii) 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. 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. III. MARKET FACTS AND ARGUMENT 6. Time Warner Cable asserts in its market modification petition that WGOT-TV has never been carried on its cable system although the station has been on the air since 1987, that WGOT-TV is located geographically distant (approximately 42 to 58 miles) from the headend of its cable system serving the Communities, and that WGOT-TV fails to provide a Grade B signal over any portion of the Communities served by its cable system. Time Warner Cable also asserts that WGOT-TV fails to broadcast any programming of specific local interest to the Communities, and fails to achieve any significant viewing audience in the Communities. Time Warner Cable contends that WGOT-TV is owned by a group owner, who offers a standard format featuring program length presentations by local and national businesses and organizations that contain no programming of specific appeal or interest for cable system subscribers located at the edge or beyond the station's Grade B signal contour. 7. Time Warner Cable provided copies of print sources of television listings from the Boston area, which do not contain WGOT-TV among station listings. The absence of any nexus between WGOT-TV and the Communities is further emphasized, Time Warner Cable contends, by the absence of WGOT-TV from TV listings from Sunday television guides published with the three local daily newspapers, The Enterprise, the Middlesex News, and the Sun, available in communities served by its cable system. Additionally, Time Warner Cable points out that the Providence edition of Television Guide does not include WGOT-TV among its listings, nor does The Boston Globe or the Boston Herald include the station in their featured television listings. Time Warner Cable asserts further that its cable system carries numerous other Boston and Providence television stations that provide a wide range of local, sports coverage, public affairs and public service coverage designed to meet the specific needs and interests of the Communities. 8. Time Warner Cable states that, while ratings data for WGOT-TV are not available to it, the Commission may reasonably conclude that the station achieves no measurable audience in the Communities, because of the station's distance form the Communities, its failure to provide a Grade B or better signal to any of the Communities, and the lack of exposure of the station's program schedule in local print media. 9. Although the station and the Communities are in the Boston ADI, Time Warner Cable contends that the Commission should delete the Communities from WGOT-TV's market. It argues that when the relevant facts and circumstance described in its petition are tested under the statutory market modification criteria, such relief is required to make the station's market congruous with market realities. 10. Paxson opposes the proposed modification of the market of station WGOT-TV. Addressing the first of four market modification factors listed in Section 614(h)(1)(C)(ii) (historic carriage), Paxson concedes that WGOT-TV has not been carried on Time Warner Cable's cable system, asserting that lack of carriage of WGOT-TV should not be given significant weight in determining whether to grant the petition. Paxson contends the must carry provisions were enacted to cure past discriminatory signal carriage practices. Regarding the second factor (coverage and local service), Paxson takes the position that the Congress enacted the must carry provisions to protect small, vulnerable, independent stations by ensuring their carriage throughout an ADI derived from economic market realities in favor of a mileage-based system dependent in large part upon the extent of a station's signal contours. Paxson notes in this regard that the Congress did not enact a bill that initially included a fifty mile radius must carry qualification provision that failed to gain acceptance while eventually replacing that provision with the current ADI-based qualification test. Paxson contends that Congress sought in this manner to enable these stations to compete effectively for viewership and advertising revenues, thereby providing financial resources and incentives necessary to strengthen local program services. It argues, therefore, that WGOT-TV failure to place a Grade B signal contour over the Communities at issue and its location some distance from those Communities have no decisional significance. The more important factor in Paxson's view is the location of the station and the Communities in the Boston ADI, which defines the station's market for must carry purposes. 11. Paxson seeks to establish coverage of the Communities and programming of local interest by stating that it has pioneered a programming format that combines program length presentations by local and national businesses and community organizations with religious and local public affairs programming. From its experience in other markets, Paxson believes as much as 45 percent of the program length presentations will be acquired by local businessmen and organizations after two years of Paxson ownership. The station also presents three hours of children's programming weekly in the mornings as well as three hours of regional and local religious programming and an hour of locally produced public interest programming on weekends. It also produces and broadcasts a local public service program, "Focus on New England," designed to address the interests of New England. Paxson contends it has thus demonstrated a significant commitment to developing programming for the cable communities. Paxson also points out that it has acquired a translator station for retransmission of WGOT-TV programming and that the ability of households to receive WGOT-TV programming by means of the translator is a valid indicator of local service. 12. The cable system's carriage of the programming of other stations should be disregarded, according to Paxson, because precedent indicates that this factor does not support a cable operator's request to delete a community; instead this criterion is used only to enhance a station's claim for adding a community where no other station serves the community. Finally, Paxson argues that the Cable Service Bureau has held that ratings of small specialty stations are not of probative value when a cable operator seek to delete markets of struggling independent station. Paxson argues further that the Commission has found that such stations may in fact enjoy significant viewership despite lack of any concrete evidence to that effect. 13. Paxson asserts that Time Warner Cable's petition fails to demonstrate that the proposed deletion of the Communities from its market would "better effectuate" the purposes of the must carry provisions. It argues that the must carry provision place the burden on the cable operators to justify a market modification, that the Congress did not intend for market modification procedures to permit a cable operator to avoid it must carry obligations, and that the market modification procedures were intended to address select cases where ADI fine tuning was appropriate. It claims Time Warner Cable failed to address how denying WGOT-TV carriage in the Communities would better effectuate the purposes of the must carry provisions and failed to allege that carriage of the station would preclude carriage of a more local broadcast station, noting that the cable system appears to have at least two unused channels that may be used for carriage of WGOT-TV. IV. DISCUSSION AND ANALYSIS 14. WGOT-TV is a UHF commercial television station licensed to operate on Channel 60 at Merrimack, New Hampshire and is located within the Boston, Massachusetts ADI. The distance from the station to the headends of Time Warner Cable's cable system serving the Communities ranges from 42 miles to 58 miles. Time Warner Cable provides cable services in the Communities, which are also located in the Boston ADI. Time Warner Cable requests that the Communities be deleted from WGOT-TV's television market. A. Historic Signal Carriage; Station Coverage of Communities 15. WGOT-TV has not historically been carried on Time Warner Cable's cable system at issue here. Paxson's argument that absence of carriage should not be considered significant in this case will be rejected. WGOT-TV has been on the air since 1987, but has never been carried on Time Warner Cable's cable system serving the relevant communities. A station's history of carriage prior to adoption of the 1992 Act is included as one of the statutory factors we are directed to consider, and accordingly, lack of historic carriage must be given appropriate weight in the ADI modification process. The fact that WGOT-TV has not historically been carried on Time Warner Cable's cable system serving the Communities is therefore probative and, while not decisional, will be taken into consideration as a factor in favor of the requested market modification. Additionally, WGOT-TV is located from 42 to 58 miles from the Communities. Additionaly, WGOT-TV does not provide a Grade B contour signal over any portion of the Communities. Although not conclusive of themselves, these factors strongly indicate that the Communities served by Time Warner Cable are not a part of WGOT-TV's market. 16. Paxson suggests that distance and Grade B contour coverage are irrelevant in the context of a smaller, independent stations and that carriage within the ADI would provide opportunity for revenue growth that can be translated into additional public service. However, where our task is to determine station market boundaries, Grade B contour coverage -- in the absence of other probative information -- is an efficient tool, because it is a sound indicator of the economic reach of a particular television station's signal. The Commission recognized this approach in its Broadcast Signal Carriage Report and Order when it stated that "to show that the station provides coverage or other local service to the cable communities, 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." 17. We reject Paxson's argument that regardless of the Section 614(h) process, smaller, independent stations are essentially guaranteed the right to carriage throughout the ADI. The provisions of the must carry statute specifically direct the Commission to exclude communities from a station's ADI where doing so will better effectuate the purposes of the legislation. The legislative history notes that the Commission, in making market determinations, 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. B. Programming Specifically For Communities Served by Cable System 18. Paxson's contention that this market modification request should be defeated because WGOT-TV provides coverage of issues and events of interest and concern to the Communities will also be rejected. We do not accept the principle advance by Paxson that a station must be considered "local," as Congress intended that term to mean in Section 614 of the 1992 Cable Act, by airing some programming associated with some of the communities in question. Programming is considered in the context of Section 614(h) proceedings only insofar as it serves to demonstrate the scope of a station's existing market and service area. It is not a quid pro quo that assures carriage or a threshold through which carriage may be attained throughout an ADI. Even so, we find that the substantial bulk of WGOT-TV's programming is either general in nature and not specifically targeted to the cable communities at issue, or is in the planning stages and has not yet aired. The "Focus on New England" programming (6:30 to 7:00 a.m. Saturday and 7:00 to 7:30 a.m. Sunday), for example, appears to be directed toward the New England area as a whole or at best toward the whole Boston area. Nothing presented by Paxson shows that the program length presentations, while acquired by local businesses organizations, consists of programming directed particularly toward the Communities served by Time Warner Cable's cable system. Paxson's failure to demonstrate that WGOT-TV presents programming designed to serve the Communities in particular provides additional weight toward granting this market modification petition. C. Station Audience in Communities Served by Cable System 19. In addition to the fact that WGOT-TV has not been carried on Time Warner Cable's cable system, the record before us establishes no significant level of viewing of WGOT- TV in the Communities served by Time Warner Cable's cable system. Paxson has not refuted Time Warner Cable's claim that there is little viewing of WGOT-TV in the relevant communities. With respect to the subject communities served by Time Warner Cable's cable system, we note that the Nielsen Station Index does not show any audience for WGOT-TV. In fact, the Nielsen Station Index does not include WGOT-TV in the listing of stations serving that market. The apparent absence of WGOT-TV viewership is consistent with the fact that its Grade B contour does not reach any of the Communities and the fact that WGOT-TV and the relevant communities are some 42 to 58 miles apart. D. Translator Coverage 20. Paxson references a translator station that it has acquired in Boston as evidence of the appropriate scope of its market and identifies 27 communities that it contends are within the "Grade B" contour of the translator. Of these communities, however, only one is specifically involved in this proceeding. With respect to that community (Foxboro), Time Warner undertook actual measurements at its headend site and found no acceptable quality signal even at the 75 foot level. According to an affidavit filed by Time Warner, the translator was not even in operation during four days in February 1997 when it attempted to take additional measurements. Moreover, commercial translators are secondary service stations explicitly not entitled to carriage in their own right. Accordingly, the service provided by WGOT-TV's translator is of little significance in the market modification analysis. D. Summary 21. Section 614(h)(1)(C) of the Communications Act requires the Commission to include or exclude particular communities from a television station's market for the purpose of ensuring that a television station is carried in the areas which it serves and which form its economic market. We believe that the requested exclusion of the Communities served by Time Warner Cable's cable system from WGOT-TV's television market will better effectuate the purposes of the must-carry statutory provisions. In reaching this conclusion, we have considered the statutory factors under which the value of WGOT-TV to community localism is to be tested and found it to be lacking. Local television guides available in the Communities served by Time Warner Cable's system contain no listing for WGOT-TV. WGOT-TV has at best a minimal viewing presence in the instant Communities, which are located approximately 42 to 58 miles from WGOT-TV. Furthermore, the station has never been carried on the cable system in question, offers no significant level of programming specifically for the relevant communities, and provides no over-the air signal coverage of the Communities. We have carefully considered each statutory factors in the context of the circumstances presented here and conclude that grant of Time Warner Cable's petition will effectuate the purposes of the must carry statutory provisions. V. ORDER 22. 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 Time Warner Cable in File No. CSR 4917-A IS GRANTED. 23. This action is taken pursuant to authority delegated by Section 0.321 of the Commission's Rules, 47 C.F.R. Section 0.321. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau