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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: ) ) North Texas CableVision, Ltd., ) CSR-5033-A Post CableVision of Texas, L.P., and ) TWFanch One Co. ) ) ) For Modification of the ADI ) of KINZ (TV), Arlington, Texas ) ) MEMORANDUM OPINION AND ORDER Adopted: October 27, 1997 Released: October 30, 1997 By the Deputy Chief, Cable Services Bureau: INTRODUCTION 1. North Texas CableVision, Ltd., Post CableVision of Texas, L.P., and TWFanch One, Co. ("CableVision") have filed with the Commission a petition requesting modification of the television market of KINZ(TV), Channel 68, Arlington, Texas ("KINZ") for purposes of mandatory carriage. CableVision requests that the communities of Emory, Glen Rose, Granbury, Lipan, Meridian, Valley Mills, and Wills Point, Texas (collectively, the "Communities") be deleted from the television market of KINZ. United Broadcast Group, II, Inc., licensee of KINZ, filed an opposition to which CableVision replied. 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. 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. SUMMARY OF PLEADINGS 8. In support of its petition, CableVision argues that KINZ should be excluded from carriage on CableVision's systems because KINZ fails to satisfy any of the four statutory market modification factors. First, with regard to historic carriage, CableVision asserts that it has never carried KINZ on its cable systems serving the Communities. Second, with regard to local coverage, CableVision asserts that KINZ fails to provide Grade B contour coverage to all but one of the communities at issue, i.e., the community of Glen Rose. CableVision notes that KINZ, in addition to failing to provide Grade B contour coverage, is geographically distant from the cable system's headends located in the Communities. CableVision states that KINZ's antenna is located 50 miles from the communities of Granbury and Glen Rose and 73 miles from the community of Wills Point. CableVision argues that these distances are all within the range of distances that the Commission has previously found to attenuate the ties between cable communities and broadcast stations. CableVision further states that KINZ fails to provide a good quality over-the-air signal to the cable system's headends. 9. Third, CableVision asserts that, with regard to service to the Communities offered by other local television stations, local coverage is provided by a number of other local affiliates, local access channels and a local origination channel. CableVision asserts that those stations broadcast local news from Monday through Friday and provide a closer nexus than KINZ which has no local programming. 10. Finally, CableVision asserts that, with regard to viewership levels, KINZ is unable to deliver a good quality signal to the Communities and, thus, it is unlikely that KINZ has any significant viewership in those communities. 11. In opposition, KINZ asserts that the mandatory carriage provisions of the 1992 Cable Act ensure that new, smaller, independent UHF stations like KINZ obtain cable carriage necessary to compete in their respective ADIs. KINZ further asserts that it is undisputable that the station is located in the Dallas-fort Worth ADI and that it serves communities which lie within or on the fringe of its Grade B contour. KINZ argues that consideration of the statutory factors used in market modification proceedings supports Kinz's position. 12. With regard to historical carriage, KINZ states that it first began broadcasting on December 16, 1996 and, since that time, has struggled to obtain cable carriage within the Dallas-Fort Worth ADI. KINZ further states that it has filed must-carry complaints against a number of cable operators, including CableVision, for carriage on their respective cable systems. KINZ's complaint against CableVision was pending with the Commission at the time this petition was filed. Thus KINZ argues that its status as a new market entrant requires that its lack of historical carriage be given little weight in this proceeding. 13. KINZ argues that, with regard to local service and coverage, Congress did not intend Grade B contour coverage to be the sole measure of a station's local coverage, particularly where a station opts to upgrade its signal quality. KINZ states that its Grade B contour covers at least one of the communities at issue and that the remaining communities are on the fringe of its Grade B contour. KINZ notes that CableVision carries another station, KTXA, whose Grade B contour is virtually identical to that of KINZ. KINZ argues that geographic distance is a factor that Congress rejected in favor of ADI- wide carriage of a television station. KINZ further argues that its transmitter site is located within 2 miles of the transmitters of other television stations carried by CableVision. KINZ's Chief Engineer affirms that KINZ transmits from Cedar Hill, Texas, the transmitter site for nine other television stations carried by CableVision. With regard to local programming, KINZ asserts that it airs three-and-one-half hours of children's programming and one-and-one-half hours of local news and public affairs programming on a weekly basis, and that it also broadcasts program length local presentations from 8:00 a.m. to 10:00 p.m. daily. KINZ further asserts that through programs such as "Metroplex Views" which airs from 7:30 a.m. to 8:00 a.m. twice a week and "Texas Financial News" which airs 8:30 a.m. to 9:00 a.m. once a week, the station provides a valuable outlet for local advertisers, businesses, and community organizations. KINZ further asserts that it is committed to providing an expanded menu of local programming in the future. 14. With regard to carriage by other local stations, KINZ argues that a cable system's carriage of other stations provides no basis for deleting communities from a particular station's television market. KINZ states that this statutory factor was intended to be used as an enhancement criterion and does not act as a bar to a station's must-carry rights. 15. Finally, KINZ asserts that, with regard to viewing patterns, it has not had the opportunity to develop a substantial viewership base. KINZ states that the Commission has recognized that it can take as long as three years for a new television station to establish viewing patterns. KINZ further states that its lack of viewership also can be attributed to the difficulties the station has experienced obtaining carriage. KINZ asserts that it is a specialty station that offers a desirable diversity of programming but attracts a limited audience. 16. In reply, CableVision maintains that KINZ misstates the rules governing market modification proceedings and that it has failed to rebut CableVision's evidentiary showing that the Communities should be deleted from KINZ's television market. CableVision asserts that it has demonstrated that KINZ lacks a history of carriage, is geographically distant, fails to provide meaningful service or Grade B contour coverage to all but one of the Communities, and is not viewed off-the-air by residents of the cable communities. CableVision further asserts that KINZ's comparison of its status with that of KTXA, a station which CableVision currently carries, is inappropriate because KTXA provides an off-air signal of good quality. 17. CableVision argues that KINZ's lack of a local nexus with the communities at issue makes the Communities "so far removed from the station that it cannot be deemed part of the station's market." Thus, CableVision asserts that the Commission's market modification process "allows stations to add or delete communities from their ADI to reflect their true marketplace." CableVision further asserts that KINZ's suggestion that smaller, independent stations are guaranteed the right to carriage throughout its ADI is without legal basis. DISCUSSION 18. Based on our analysis of the evidence relating to the four statutory and other relevant factors, we will deny CableVision's petition to delete the Communities from KINZ's television market. We have given greater weight to KINZ's Grade B contour and Cablevision's carriage of other stations in the same area while KINZ's lack of historical carriage and viewership have been given less weight. We take special note of CableVision's carriage of nine other television stations which transmit from virtual the same site as KINZ in Cedar Hill, Texas. 19. The cable television mandatory broadcast signal carriage rules were adopted as part of the 1992 Cable Act. The legislative history of the 1992 Cable Act indicates that the use of ADI market areas is intended "to ensure that television stations be carried in the areas which they service 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." When viewed against this framework, and considering all of the relevant factual circumstances in the record, we believe that CableVision's deletion petition does not appear to be a legitimate request to redraw ADI boundaries to make them congruous with market realities. We do not believe that the requested exclusion of the communities served by CableVision's cable system from the market of KINZ will better effectuate the purposes of the must-carry statutory provisions. 20. We now turn to the four-part market modification analysis. Statutory factor one is "whether the station, or other stations located in the same area, has been historically carried on the cable system or systems within such community." KINZ, operating as Channel 68 assigned to the Dallas-Fort Worth ADI, has no history of carriage on CableVision's cable system serving the Communities. KINZ however has been operating for only eight months and has not had an opportunity to establish a history of carriage in the ADI. While in general the lack of historic carriage favors excluding the cable communities from KINZ's television market, that factor is not outcome determinative in a market modification proceeding, particularly in the instant case where the station has recently begun broadcast operations. In further consideration of this factor, CableVision's carriage of nine other stations on its system serving the Communities which transmit from the same transmitter site as KINZ has significant weight in this proceeding. 21. Statutory factor two is "whether the television station provides coverage or other local service to such community." This factor incorporates both technical service and programming service as well as geography (mileage and topographical features). With regard to technical service, the Commission has stated in its Report and Order in MM Docket 92-259 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 communities, or is located close in terms of mileage." In the absence of other determinative market facts (i.e., where the other aspects of the four statutory factors by themselves define the market, where there is no clear proof that the contour fails to reflect actual coverage, or where there are no terrain obstacles), Grade B contours have been found to be an efficient tool to adjust market boundaries. We find that KINZ places a Grade B contour over one community at issue, namely, Glen Rose. 22. With regard to the remaining communities for which KINZ does not evidence Grade B contour coverage, ordinarily we might have concluded that they were too distant to be considered part of KINZ's television market. In the instant case, however, we have taken special notice of and given significant weight to CableVision's carriage of nine other television stations which transmit from the same transmitter site as KINZ. One of the nine stations, KTXA, is licensed to the same city as KINZ, i.e., Arlington, Texas. We further note that KTXA has a Grade B contour which is substantially similar to that of KINZ with regard to the cable communities at issue. We find that CableVision's carriage of the nine television stations, in general, and its carriage of KTXA, in particular, undermines its claim that the Communities are not part of the same economic market for broadcast television purposes. 23. With regard to geographic distance, we find that the distances ranging from 50 to 73 miles serve to attenuate the KINZ's connection to the cable communities. CableVision argues that the geographic distances should be given significant weight in this proceeding. We further find that the significance of geographic distance can be mitigated by other factors such as the carriage of similarly situated television stations. With regard to programming service, KINZ has not demonstrated that its programming is focused on the interests of the residents of the communities at issue. For example, KINZ cites its program "Texas Financial News" which may be of general interest to subscribers but fails to show that this program is of local interest. KINZ states that it is dedicated to providing local programming in the future although it does not elaborate upon its plans or cite examples of programming commitments which are tailored to the interests of the Communities. We find that KINZ's programming is currently insufficient to establish a specific programming nexus to the relevant cable communities. 24. Statutory factor three is "whether any other television station that is eligible to be carried by a cable system in such a community in fulfillment of the requirements of this section provides news coverage of issues of concern to such community." Carriage of other local stations, in particular, may be used as an enhancement factor to support a cable operator's deletion request when other evidence shows the communities at issue to be outside of the station's market. In the instant case, however, the local stations that CableVision claims provide local programming are from the same area as KINZ. Thus, if anything, CableVision's carriage of these other local stations provides support for the proposition that the areas in question are part of KINZ's market rather than evidence that local service is provided by stations from other communities. 25. 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." KINZ has no significant reported audience share in the cable communities in question. We note that KINZ is a relatively new station, classifies itself as a specialty station and asserts that ratings are of no probative value in this proceeding. The Commission has stated that it may take as long as 3 years for a television station to establish viewing patterns. KINZ's lack of audience share is not outcome determinative and, because it is a new station, will be given little weight in this proceeding. 26. We have carefully considered the statutory factors as well as other relevant information. KINZ's status as a new market entrant and a specialty programmer persuade us that factors I (historical carriage) and IV (viewership) provide little support for the requested deletion of the communities from KINZ's television market. We further find that the evidence with respect to factor II (coverage or local service) weighs against granting CableVision's deletion request. Finally, CableVision's carriage of KTXA and of the other stations transmitting from virtually the same site as KINZ provides support under factor I (historical carriage) for denying Cablevision's petition with respect to the cable communities at issue. ORDERING CLAUSES 27. Accordingly, IT IS ORDERED that, pursuant to  614 of the Communications Act, as amended, 47 U.S.C.  534, and Section 76.59 of the Commission's rules, 47 C.F.R.  76.59, the Petition for Special Relief (CSR-5033-A) filed by North Texas CableVision, Ltd., Post CableVision of Texas, L.P., and TWFanch One, Co. IS DENIED. 28. This action is taken pursuant to authority delegated by Section 0.321 of the Commission's rules, 47 C.F.R.  0.321. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau