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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: ) ) Suburban Cable TV Co., Inc. and )CSR-4953-A Lenfest Atlantic, Inc. ) ) For Modification of the ADI of ) Station WFMZ-TV, Allentown, ) Pennsylvania ) MEMORANDUM OPINION AND ORDER Adopted: July 10, 1997Released: July 14, 1997 By the Deputy Chief, Cable Services Bureau: INTRODUCTION 1. Suburban Cable TV Co., Inc. and Lenfest Atlantic, Inc. (collectively "Suburban"), filed the above-captioned petition for special relief seeking to modify the Philadelphia, Pennsylvania Area of Dominant Influence (ADI) relative to Station WFMZ-TV (Ind., Ch. 69), Allentown, Pennsylvania. Specifically, Suburban requests that WFMZ-TV be excluded for purposes of the cable television mandatory broadcast signal carriage rules, from the various communities it serves on cable systems located in the counties of Bucks, Chester, Delaware, and Lancaster, Pennsylvania and Atlantic, Camden, and Gloucester Counties, New Jersey. An opposition was filed on behalf of WFMZ-TV to which Suburban has replied. 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)(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 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 MM Docket No. 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 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. MODIFICATION ARGUMENTS 8. In support of its request, Suburban argues that WFMZ-TV cannot be considered local under the market modification criteria and should not be required to be carried on Suburban's systems. Suburban states initially that signal quality tests which it has performed on WFMZ-TV's signal indicates that the station fails to meet the Commission's criteria for a good quality signal. Secondly, Suburban states that not only has WFMZ-TV never been carried on any of the instant cable systems, despite being on-the-air for over twenty years, but it is also not carried by several other area cable systems. Third, Suburban states that WFMZ-TV is geographically remote from the communities in question, with the closest system headend (Bensalem, PA) an average of 40.53 miles from WFMZ-TV's transmitter and the farthest (Turnersville, NJ), 61.36 miles away. Suburban argues that these distances are comparable to the geographic distances of 40 to 75 miles encountered in cases where the Bureau granted similar exclusion requests. Moreover, except for the Bensalem system communities, Suburban indicates that its communities are entirely outside WFMZ- TV's Grade B contour. Further, Suburban states that WFMZ-TV fails to provide any programming which serves the needs and local interests of its subscribers. It argues that WFMZ-TV primarily broadcasts syndicated, religious and paid programming and concentrates specifically on Lehigh Valley, Pennsylvania news. Suburban maintains that none of this programming has any particular nexus to its systems' communities. In any event, Suburban indicates that numerous other stations carried by its systems provide extensive local programming which is geared specifically to its subscribers. Also, Suburban states that A.C. Nielsen records no viewership for WFMZ-TV in any of the subject counties except Bucks County, Pennsylvania. Even in that county, however, Suburban points out that WFMZ-TV's viewership is "less than one-half of one percent of the viewing" in the county and only during 3 1/2 hours of a 168 hour week. Suburban contrasts this to Bucks County stations which deliver an average 11% share for the Sunday- Saturday 7 a.m. to 1 a.m daypart. Finally, Suburban argues that not only is WFMZ-TV not considered to be significantly viewed in any of the counties in which the communities are located but it is not listed in either the local papers serving these same communities, nor the Philadelphia, Pennsylvania edition of TV Guide. In view of the above, Suburban concludes that its petition for modification should be granted. 9. WFMZ-TV argues in opposition that Suburban's arguments are circular, based on inaccurate information, not supported by the facts and reach inaccurate conclusions. It maintains that the must carry regulations serve in helping to preserve the benefits of free, over-the-air television, and promote wide dissemination of information and fair competition. WFMZ-TV states that the Supreme Court, in affirming the must carry regulations, found that independent local broadcasters, such as WFMZ-TV, were the most likely stations to be discriminated against. WFMZ-TV argues that although the Bureau has used the market modification criteria to allow the exclusion of stations from their home markets, it is evident that Congress intended for these factors to be used, for the most part, to include communities served by a particular station, and thus not disrupt established viewing patterns. WFMZ-TV maintains that the purposes of 614 of the Act would be better served in the instant case by denying Suburban's request, particularly as a grant would deprive WFMZ-TV access to Suburban's approximately 900,000 subscribers (out of the 2.6 million cable subscribers in the Philadelphia ADI). With regard to the criteria, WFMZ-TV states that, until substantial improvement in its facilities, and passage of the 1994 Satellite Home Viewer Act, Suburban had no legally enforceable obligation to carry its signal. Since that time, WFMZ-TV points out that it has been added to cable systems totalling more than 500,000 cable homes, many of which are adjacent to Suburban's systems. Indeed, WFMZ-TV states, the only cable systems in Bucks, Chester and Delaware Counties not carrying its signal are Suburban's systems. Therefore, WFMZ-TV argues that its lack of historic carriage should not now affect its must carry rights. In addition, WFMZ-TV maintains that it provides a Grade B or better signal to many of the communities at issue. In any event, WFMZ-TV argues that its failure to place a Grade B contour over all of the communities is not by itself dispositive. 10. WFMZ-TV argues further that Suburban's petition completely mischaracterizes its station's news and informational programming as a parochial "Lehigh Valley" service. It maintains that the programming it provides is of direct interest to the instant communities as it provides an independent news voice for all of Lehigh Valley, western New Jersey, Philadelphia, the rest of southeastern Pennsylvania, and Philadelphia's New Jersey suburbs. Not only does it provide five live, local daily newscasts, but WFMZ- TV states that it provides substantial coverage of news stories regarding the affected counties, statewide Pennsylvania and New Jersey news, and public affairs programming. WFMZ-TV argues that while Suburban provides examples of news coverage by five Philadelphia stations, it does not show that such coverage is so unique or exhaustive that there is no public interest in providing its subscribers with additional programming from another source. In any event, WFMZ-TV states that the fact that a few other stations carried by Suburban do provide coverage and service to the communities does not warrant grant of Suburban's request. Finally, with respect to viewing patterns, WFMZ-TV points out that due to the fact that its signal has never been carried on Suburban's systems, and that each of the counties in which Suburban operates is heavily cabled, the viewership criteria should have no more importance than the historic carriage factor. 11. In reply, Suburban states that its petition fully demonstrates the appropriateness of excluding its systems' communities from a must carry obligation with regard to WFMZ-TV as the station fails to meet the modification criteria. Suburban argues that WFMZ-TV's skewed interpretation of Congress' intent in adopting 614 is incorrect and misleading. Suburban states that WFMZ-TV overlooks Congress' mandate that a cable system can be "so far removed from [a] station that it cannot be deemed part of the station's market." In addition, although WFMZ-TV attempts to rationalize its lack of historic carriage by claiming that "until the recent legislation" it had no enforceable must carry rights, Suburban points out that the 1992 Cable Act has been in force over 5 years and the amendment to the Copyright Act over 3 years. Therefore, it states, WFMZ-TV has had substantial opportunity to enforce its must carry rights for several years. Suburban maintains, however, that the reasons WFMZ-TV has never been carried have more to do with the fact that the station has never been able to deliver a viewable signal, that it does not provide locally-oriented programming, and there has been no subscriber interest in obtaining the station. Suburban argues further that, despite WFMZ-TV's assertions in claiming to be a regional news station, the fact remains that, in actuality, over the 65 week period in which WFMZ-TV detailed the number of news stories covering the relevant counties, the station only provided about two stories a week regarding Chester County, one story a week regarding Delaware County, and less than one story every three weeks regarding Atlantic, Camden and Gloucester Counties. Finally, Suburban points out that although WFMZ-TV questions the use of county- wide data in determining its station's viewership, it fails to produce any community-specific data to refute the lack of viewership found. DISCUSSION AND ANALYSIS 12. We turn first to Suburban's market modification petition, to determine whether the communities served by Suburban's four cable systems should be removed from WFMZ-TV's ADI. A resolution of this matter will determine whether WFMZ-TV is eligible to claim carriage rights in these communities. 13. Based on our analysis of the evidence relating to the four statutory and other relevant factors, Suburban's petition will be granted in part and denied in part. Philadelphia is the nation's fourth largest populous market in terms of population. It is a large market in terms of geographic area, stretching from Northampton County in the north to Atlantic City and into Delaware in the south. Allentown is some 45 miles to the north of Philadelphia. The cable communities involved are in the New Jersey counties of Atlantic, Camden and Gloucester, which are located across the Delaware River from the City of Philadelphia, and the Pennsylvania counties of Bucks, Chester, Delaware and Lancaster, which immediately surround Philadelphia. WFMZ-TV, licensed to Allentown, Pennsylvania, began operation in 1976 and broadcasts on channel 69 from a transmitter located in Allentown. The cable communities are approximately 40 to 80 miles from the station. A. Historic Signal Carriage 14. Statutory factor one is "whether the station, or other stations located in the same area, have been historically carried on the cable system or systems within such community." WFMZ-TV has no history of carriage in the cable communities in question. WFMZ-TV is not a station of recent origin, having commenced operations more than 20 years ago. Nor, with one exception, are other stations carried from the same general area (Allentown) to which this station is licensed. Suburban's Delaware County system does carry the signal of another Allentown station, noncommercial educational station WLTV-TV, which broadcasts from the same tower as does WFMZ-TV. 15. Carriage on nearby cable systems is not a factor specified in the statute, but it does seem likely, depending on the specific circumstances involved, that carriage on nearby systems could serve as evidence to define the logical scope of a station's market. Such carriage serves to demonstrate the belief of both the stations and systems involved that there is a market nexus between the broadcast station and the communities where the station is carried and thus provide evidence as to the scope of a station's market. The signal of WFMZ-TV is carried in the City of Philadelphia, which is relatively close to Suburban's Pennsylvania cable system communities, and in Trenton, New Jersey. B. Station Coverage of Communities 16. Statutory factor two is "whether the television station provides coverage or other local service to such community." With respect to coverage, the Commission has stated in its Report and Order in MM Docket 92-259, supra, 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." There are four separate Suburban systems at issue herein. With respect to Bensalem, Pennsylvania, WFMZ-TV currently provides Grade B service to 5 of the 7 system communities and Grade A service to one community. An application is pending that will extend the station's Grade B service area to include the remaining system community. With respect to Coatesville, Pennsylvania, WFMZ-TV currently provides Grade B service to 10 of the 35 system communities. The station's pending application will extend the station's Grade B service area to include an additional 3 communities, while a number (but not all) of the remaining communities involved will be on the fringe of the contour. With respect to Delaware County, Pennsylvania, WFMZ-TV does not currently provide Grade B service to any of the 40 cable communities of this system. The station's pending application, however, will extend the station's Grade B service area to include 6 of the communities, while a number of the remaining communities involved will be on the fringe of the contour. Finally, with respect to Turnersville, New Jersey, WFMZ-TV does not currently provide Grade B service to the 7 cable communities of this system, nor are any of the communities on the fringes of the Grade B contour. This status will remain unchanged even after the extension of WFMZ-TV's Grade B contour. 17. With respect to programming service, Suburban alleges that there is no significant amount of programming from the station that is specifically targeted to the cable communities involved. There is evidence from the station, however, that it broadcasts material directed toward Pennsylvania and New Jersey viewers, including stories specific to Bucks, Chester, and Delaware Counties, Pennsylvania, and to Camden and Gloucester Counties, New Jersey. C. Coverage of News, Sporting Events, or Other Events of Interest by Other Stations Entitled to Carriage 18. Statutory factor three is "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." In this instance, Suburban alleges that it provides carriage to numerous Pennsylvania and New Jersey stations that provide local service to its subscribers. However, WFMZ-TV disputes the significance of the coverage by the other stations. D. Station Audience in Communities Served by Cable System 19. Statutory factor four is "evidence of viewing patterns in cable and noncable households within the areas served by the cable system or systems in such community." There does not appear to be any serious dispute that the station has no significant audience in the cable communities, either in cable or noncable households. Nielsen data for the counties reflect no viewing of WFMZ-TV which is entirely consistent with the fact that there is a lack of Grade B service to many of the communities herein. We note, however, that this evidence must be considered in light of the existing lack of carriage and the heavily-cabled nature of the communities (the cable penetration rates for the counties herein range from 72% to 96%). E. Other Considerations 20. The factors specified in 614(h) do not purport to be exclusive and thus other evidence may be considered that is helpful in defining the scope of the markets of the stations involved. One such additional factor involves whether local newspaper or other listings of station programming that have circulation in the cable communities include the programming of the stations in question. WFMZ-TV is said to be now listed in the channel reference pages of the Philadelphia metropolitan edition of TV Guide with a full program listing scheduled to commence. F. Summary 21. The cable television mandatory broadcast signal carriage rules were adopted as part of the 1992 Cable Act. According to the legislative history of that Act, the use of ADI market areas is intended "to ensure that television stations be carried in the areas which they serve and which form their economic market." The Act specifically provided that the Commission was to consider adding additional communities or excluding communities from the markets of television stations "to better effectuate the purposes" of the mandatory carriage requirements. In acting on such requests the Commission was instructed to "afford particular attention to the value of localism, taking into account four specified statutory factors." These factors, however, were "not intended to be exclusive." The market modification provisions of 614(h) are said, in the legislative history, to "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." We do not believe, except in the instance of the Turnersville, New Jersey system, that the requested exclusion of the communities served by four Suburban cable systems from the markets of WFMZ-TV will better effectuate the purposes of the must-carry statutory provisions. 22. In reaching this conclusion, we have considered the statutory factors as well as other relevant information. WFMZ-TV has never been carried in any of the communities in question (factor I), provides no over-the-air television broadcast service for a portion of the communities (factor II), and has no measured audience in the communities (factor IV). Other stations that are entitled to carriage do provide news and other information regarding issues of concern to the communities (factor III). Given the statutory directive, weight must be given to these factors, but that must be done bearing in mind that the objective of the 614(h) process is to "better effectuate the purposes" of the broadcast signal carriage scheme. Thus, with respect to the question of historical carriage patterns, attention must be paid to the circumstances from which such patterns developed. Some stations have not had the opportunity to build a record of historical carriage for specific reasons that do not necessarily reflect a judgment as to the geography of the market involved. Thus, these factors -- to the extent they are reflective of circumstances outside of the shape of the market -- are not by themselves controlling in circumstances where such an implementation of the 1992 Cable Act would, in effect, prevent weaker stations like WFMZ-TV, that cable systems had previously declined to carry, from ever obtaining carriage rights. 23. Another factor to consider is the availability of other broadcasters in the market that are eligible for carriage and provide coverage of news, sporting events, or other events of interest to the communities at issue. We have stated, however, that 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 to which we will give greater weight than in cases where a party is seeking to add communities. Carriage of other local stations may be used as an enhancement factor to support a cable operator's deletion request when there is other evidence in the record that the communities at issue are outside of the station's market. In the present case, Suburban carries numerous other stations licensed to communities in the Philadelphia ADI that are closer to the cable communities and provide coverage of local news and events. There is, however, also evidence of WFMZ-TV service to the cable communities. 24. Given the difficulties of relying exclusively and explicitly on the statutory factors of historical carriage and viewing patterns, which in certain circumstances could severely narrow the carriage rights of stations even within what is undeniably their local market area, we have found it helpful to focus also on factors that are not influenced by the type or age of the stations involved or historical carriage. The scope of a local station's market may be measured through geographic means by examining the distance between the station and the cable community subject to the deletion request and by taking into account natural phenomena such as waterways, mountains, and valleys that may tend to separate communities and define natural markets -- basic geographic, demographic, and political features that provide the best available alternative evidence of the market boundaries of the stations involved. In this regard, the Commission has explicitly noted the relevance of Grade B contours. In the absence of other information, station service contours provide at least one objective measure of the scope of a station's local market. Here we note that while WFMZ-TV does not presently provide Grade B service to all of the cable communities, its Grade B contour does currently encompass 15 of the 81 Pennsylvania communities. After WFMZ-TV completes the process of improving its facilities, the number of Pennsylvania system communities encompassed by the station's Grade B contour will be 25 (or approximately one-third). The remaining Pennsylvania communities will be on the edge of the service area. In addition, the Pennsylvania communities are geographically separated from WFMZ-TV's city of license in terms of mileage by approximately 40 to 48 miles, while the New Jersey system communities are not only approximately 61 miles distant, but are on the far side of the Delaware River from Allentown and in a different state. 25. Weighing against the grant of Suburban's petition with regard to the Pennsylvania communities is evidence relating to cable carriage in other adjoining communities and the fact that the station has demonstrated some efforts to provide programming targeted to the counties in which the communities are located. These two factors in our analysis of this petition persuade us, along with the other facts as to the station's broadcast service area and the distances and geography involved, that exclusion of the Pennsylvania communities from the market of WFMZ-TV is not warranted. We recognize that a number of the other factors weigh in Suburban's favor, including in particular the absence of any historical carriage in the areas in question after many years of operation. The station's facilities were improved in 1993 and a further improvement has been applied for, so that the lack of historical carriage is based upon circumstances that no longer exist. The listing of the station and its schedule in TV listings relevant to these communities also provides some evidence that the market regards this area to be within the economic market and service area of the station. The distances and geography involved are not so extreme as to suggest no market nexus with the communities exists. Virtually all of the Pennsylvania communities are situated along or near the Delaware River, clustered around Philadelphia. These communities are also in close proximity to other systems which carry WFMZ-TV. We note, too, that Suburban's Delaware County system carries WLTV-TV, another licensee from WFMZ-TV's city of license. In contrast, the New Jersey communities, lie beyond the Delaware River, and are considerably more distant. In addition, no cable systems proximate to the New Jersey communities carry WFMZ-TV. 26. We have carefully considered each statutory and other relevant factor in the context of the circumstances presented here and, on balance, we find that Suburban has not demonstrated that the Pennsylvania communities it serves herein lack a sufficient nexus with WFMZ-TV to warrant deletion of these communities from the station's ADI. With regard to Suburban's New Jersey system communities, however, we find that, in light of the distances involved and both current and future lack of Grade B coverage by WFMZ-TV, grant of Suburban's request to exclude these communities is warranted. ORDERING CLAUSES 27. Accordingly, IT IS ORDERED, that the petition for special relief (CSR-4953-A), filed February 28, 1997, by Suburban Cable Co., Inc. and Lenfest Atlantic, Inc. IS GRANTED to the extent indicated above in paragraph 26 and IS OTHERWISE DENIED. 28. This action is taken pursuant to authority delegated by 0.321 of the Commission's Rules. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau APPENDIX A I. Cable systems served by Suburban Cable TV: 1) Bensalem, Pennsylvania system (Bucks County, PA): Bensalem Township* Falls Township* Lower Southampton Township* Warminster Township+ Morrisville Borough* Upper Southampton Township* Tullytown Borough# 2) Coatesville, Pennsylvania system (Chester, Lancaster and Delaware Counties, PA): Coatesville Caln South Coatesville Valley West Brandywine* Downingtown# Modena East Fallowfield West Goshen# West Chester East Caln* Uwchlan* East Goshen* Westtown West Whiteland* East Brandywine# Parkesburg West Bradford* Sadsbury West Sadsbury Atglen Thornbury Birmingham East Bradford Pocopson Wallace* West Caln West Pikeland* Upper Uwchlan* Thornberry 2) Coatesville system (cont'd): West Nantmeal* West Vincent Honeybrook East Nantmeal Charlestown 3) Delaware County, PA systems: Chester Upper Darby Ridley Lansdowne# Clifton Heights Aldan East Lansdowne# Yeadon# Glenolden Darby Sharon Hill Colwyn Collingdale Springfield Folcroft Prospect Park Upper Chichester Norwood Nether Providence Ridley Park Chester Heights Brookhaven Eddystone Media# (portion) Parkside Upland Aston Lower Chichester Marcus Hook Trainer Morton Rutledge Middletown# Rose Valley Tinicum 3) Delaware County (cont'd): Upper Providence Swarthmore Millbourne# Bethel Concord II. Lenfest Atlantic system: 1) Turnersville, NJ system: Washington Monroe Winslow Waterford Folsom Buena Vista Chesilhurst *currently within Grade B contour #within proposed Grade B contour +within Grade A contour