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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 ) ) TWI Cable, Inc. ) CSR 4972-A ) For Modification of Market of Television) Station WNAB-TV, Nashville, Tennessee) MEMORANDUM OPINION AND ORDER Adopted: August 14, 1997 Released: August 25, 1997 By the Deputy Chief, Cable Services Bureau: INTRODUCTION 1. TWI Cable, Inc. ("TWI Cable") filed a petition pursuant to Sections 76.7(a) and 76.59(a) of the Commission's rules requesting that the communities of Camden (TN0014) and Benton County (TN0639), Tennessee ("the Communities") served by its cable system be excluded from the television market of station WNAB-TV, Nashville, Tennessee for purposes of the cable television mandatory broadcast signal carriage rules. Speer Communications Holdings Limited Partnership ("Speer"), licensee of WNAB- TV, filed an opposition to the petition, and TWI Cable filed a reply. 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. MARKET FACTS AND ARGUMENT 6. TWI Cable asserts in its market modification petition that WNAB-TV has not been carried on its cable system, that WNAB-TV, located about 15 miles southeast of Nashville, is geographically distant (approximately 85 miles) from the headend of its cable system serving the Communities, and that WNAB- TV fails to provide a Grade B signal over any portion of the Communities served by its cable system. TWI Cable asserts that WNAB-TV's Grade B signal contour falls almost 40 miles short of Camden. TWI Cable provided copies of WNAB-TV's prime time program schedule from the Nashville Edition of TV Guide in support of its assertion that WNAB-TV fails to broadcast any programming of specific local interest to the Communities. TWI Cable also asserts that WNAB-TV fails to achieve any significant viewing audience in the Communities. 7. TWI Cable states that station viewing data and station rating information for WNAB-TV are not available, because the station only commenced operations broadcasting in November 1995. However, it contends that the Commission may reasonably conclude that the station achieves no measurable audience in the Communities, because of the station's distance from the Communities, and its failure to provide a Grade B or better signal to any of the Communities. TWI Cable provided an exhibit showing that five stations licensed to Nashville, Tennessee and two stations licensed to Jackson, Tennessee are carried on its Camden cable system. TWI Cable also provided program schedules for the Nashville stations and suggests that, since these program schedules show that programming originated by these stations provides its subscribers a wide range of news, sports, public affairs and public service coverage, any additional programming offered by WNAB-TV would add nothing significant to that already available to its subscribers. 8. Although the station and the Communities are both in the Nashville (Cookeville), Tennessee ADI, TWI Cable contends that the Commission should delete the Communities from WNAB-TV's market. It argues that when the relevant facts and circumstances 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. TWI Cable states that it also does not carry four other stations located in the Nashville ADI that do not place Grade B signals over the Communities. For that reason TWI Cable argues that WNAB-TV will not be competitively disadvantaged relative to those stations by the requested market modification. 9. Speer opposes the proposed modification of the market of station WNAB-TV. Addressing the first of four market modification factors listed in Section 614(h)(1)(C)(ii) (historic carriage), Speer concedes that WNAB-TV has not been carried on TWI Cable's cable system. Speer asserts that lack of carriage of WNAB-TV, which became operational in November of 1965, should not be given significant weight in determining whether to grant the petition. Speer contends the must carry provisions were enacted to cure past discriminatory signal carriage practices. 10. Regarding the second factor (local service and coverage), Speer seeks to establish coverage of the Communities and programming of local interest by stating that WNAB-TV produces and broadcasts programming designed to address the interests of all residents of the Nashville ADI, including the communities served by TWI Cable. Speer identifies several programs that it produces, such as "Newsbreaks," broadcast five times each day, "Tennessee Moments," and "Town Hall Meetings," as programs that present local news, contain vignettes designed for Tennesseeans across the viewing area, and address topical issues important to all viewers, including those in the cable communities at issue. Speer points out also that WNAB-TV runs "crawls" displaying weather information alerting its audience of severe and threatening weather and information about school closings due to inclement weather and hazardous conditions. Speer states that WNAB-TV also provides live coverage of local college and high school sports, including those in and near the Camden and Benton County area. It argues that the local programming provided by WNAB-TV is exactly what Congress sought to stimulate in mandating ADI-wide carriage of smaller stations like WNAB-TV. If the petition were granted, only well established, higher powered stations such as those that are able to provide a Grade B signal to the cable communities or could afford retransmission consent would be able to achieve carriage throughout the ADI. 11. The cable system's carriage of the programming of stations licensed to Nashville and Jackson, Tennessee does not support grant of the petition, Speer contends. First, Speer asserts that TWI Cable's provision of examples of those stations' published program schedules does not establish that those other stations provide local service as claimed. Speer also points out that TWI Cable carries Nashville station WZTV-TV, whose Grade B signal does not cover Camden. Speer argues, however, that WZTV-TV's closer reach to Camden than WNAB-TV does not justify the operator's failure to carry WNAB-TV as suggested by TWI Cable. Speer argues also that the fact that TWI Cable does not carry other stations in the Nashville ADI that do not place Grade B signals over the Communities is irrelevant. Speer further argues that TWI Cable's not carrying those four stations does not establish that WNAB-TV will not be competitively disadvantaged by grant of the petition. 12. Speer asserts that the 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 provisions 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 its must carry obligations, and that the market modification procedures were intended to address select cases where ADI fine tuning was appropriate. It claims TWI Cable failed to demonstrate how denying WNAB- 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. 13. Speer 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 rather than a mileage-based system dependent in large part upon the extent of a station's signal contours. Speer notes in this regard that Congress declined to 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. Speer contends that Congress sought in this manner to enable smaller 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 WNAB-TV's 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. Speer argues that the United States Supreme Court recently upheld the must-carry provisions largely on the grounds that those statutory provisions were a lawful effort to support and protect small, emerging broadcasters such as WNAB-TV. Speer argues that the Court thus recognized this Commission's conclusions that without such relief, local off- the-air broadcasting was endangered, because cable systems would have incentives to drop local broadcasters in favor of other programmers less likely to compete with them for audience and advertisers. Speer argues the Commission, in implementing and defending the must-carry provisions before the Supreme Court, explicitly recognized that without the must-carry protection cable operators would be inclined to refuse to carry smaller, emerging broadcast stations. DISCUSSION AND ANALYSIS 14. WNAB-TV is a UHF commercial television station licensed to operate on Channel 58 at Nashville, Tennessee and is located within the Nashville (Cookeville), Tennessee ADI. The station is located approximately 85 miles from the headend of TWI Cable's cable system serving the Communities, which are also located in the Nashville ADI. 15. WNAB-TV, which first became operational in November of 1995, has not been carried on TWI Cable's cable system at issue here. In addition, WNAB-TV is located approximately 85 miles from the Communities and does not provide a Grade B signal contour over any portion of the Communities. WNAB- TV's Grade B signal contour falls approximately 40 miles short of the Communities. Although not conclusive of themselves, in other circumstances these factors would tend to indicate that the Communities served by TWI Cable may be too distant to be a part of WNAB-TV's market. The fact that WNAB-TV is a relatively new station, however, bears on the weight to be given the historic carriage factor. With respect to the coverage factor, there is also evidence that WNAB-TV provides live coverage of local college and high school sports, including those in and near the Camden and Benton County area. 16. 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. Although WNAB-TV is not carried on the cable system in question, the cable system does carry five other stations licensed to Nashville, which is also WNAB-TV's city of license. The carriage of five stations licensed to Nashville on the cable system in Camden provides strong evidence that Camden communities should be considered part of the market of stations licensed to that city. The requested exclusion of Camden from WNAB-TV's market would allow TWI Cable to discriminate among the several stations licensed to Nashville, despite the Congressional mandate to preclude such discrimination. Under the statutory factors, we must consider not only whether the cable system carries the station that is the subject of the market modification petition, but also whether "other stations located in the same area, have been historically carried on the cable system ...." 17. We have carefully considered each statutory factor in the context of the circumstances presented here. The carriage of the five Nashville stations on the Camden cable system, however, is an overriding factor in this case because it evidences a strong market nexus between Nashville and the cable communities and because it impacts heavily on the ability of WNAB-TV to reach viewers in a portion of the Nashville ADI that at least five of the other stations serving the same community are able to reach. Accordingly, we find that TWI Cable failed to demonstrate that the requested exclusion of the Communities served by TWI Cable's cable system from WNAB-TV's television market will better effectuate the purposes of the must-carry statutory provisions. ORDER 18. 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 TWI Cable in File No. CSR 4972-A IS DENIED. Speer Comomunications Limited Partnership shall notify TWI Cable in writing of its carriage and channel position election (76.56, 76.57, and 76.64(f) of the Commission's Rules) within thirty (30) days of the release date of this Memorandum Opinion and Order. TWI Cable shall come into compliance with the applicable rules within sixty (60) days of such notification. 19. 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