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S- X    S-  Federal Communications Commission`}(#DA 972635 ă  yxdddy Պv3 #X\  P6G;P#Before the Federal Communications Commission  yO} Washington, D.C. 20554 ă  S0-#&a\  P6G;&P#In re:R) R) Paxson Boston License, Inc.R) R)  S-vs.R)hCSR5063M R) Cablevision of Boston, L. P. R) R) Request for Mandatory Carriage R) of Television Station WGOTTV, R) Merrimack, NHR) R)  S-  MEMORANDUM OPINION AND ORDER TP  S-X` hp x (#%'0*,.8135@8:of the Commission's rules,^ @j] yOJ&-ԍ47 U.S.C. 534(b)(5) and 47 C.F.R. 76.56(b)(5).^ cable systems are not required to carry the signals of more than one local  xtelevision station affiliated with a particular broadcast network as defined by Section 76.55(f) of the" ,`(`(88b"  S- xyCommission's rules.E X] yOh- xԍThe Commission's rules state that for must carry purposes, a commercial television network is an entity that  xoffers programming on a regular basis for 15 or more hours per week to at least 25 affiliates in 10 or more states. 47 C.F.R. 76.55(f). E Cablevision argues that it is not required to carry WGOTTV because WGOTTV  S- xMis affiliated with the inTV Network (also known as the "InfoMall TV Network") and another station  xaffiliated with that same network WHRC, Norwell, Massachusetts has also requested carriage on  xCablevision's Boston system. Cablevision states that the Commission's rules provide that a cable operator  Sb- xmust only carry the signal of the closest network affiliate whose community of license reference point,  S:- xas defined Section 76.53, is closest to the principal headend of the cable system.C :] yO -ԍ47 C.F.R.  76.56(b)(5).C Cablevision states that  xthe principal headend for the Boston System is located in West Roxbury, Massachusetts. Cablevision  xfurther states that Norwell, Massachusetts, the community of license of WHRC, is located approximately  x20 miles from West Roxbury, while Merrimack, New Hampshire, the community of license of WGOT xTV, is located approximately 44 miles from West Roxbury. Thus, according to Cablevision, if its cable  xysystem were faced with having to carry the duplicative signals of both WGOTTV and WHRC, it should only be required to carry the signal of WHRC, which is the station located closest to its principal headend.  S - ` x5.` ` Cablevision further notes that Paxson is an indirect corporate subsidiary of PCC, which  S - xin turn owns and operates the inTV Network. Cablevision also notes that the Commission has previously  S - xjdetermined that inTV is a television network for purposes of the must carry requirements. x] {O-ԍMediaOne, Inc., DA 971776 (CSR5012A, CSR4990M) (released August 20, 1997). ("MediaOne"). Cablevision  S - xalso argues that there can be no dispute that WGOTTV is an affiliate of the inTV Network because the  xkstation is owned and operated by an subsidiary of the entity that owns the network, and WGOTTV  xconsistently has been identified on corporate letterhead and promotional materials as an affiliate of the  S- xinTV Network. Cablevision also contends that PCC and inTV, through its subsidiary Paxson, controls  xalmost all of the air time on WHRC. Cablevision reports that Paxson has leased approximately 162 hours  S- xper week of the airtime of WHRC pursuant to a Time Brokerage Agreement with WHRC's licensee.O  ] yOl-ԍCablevision Opposition at 8, Exhibit 5.O  xIn addition, Cablevision reports that PCC, through various subsidiaries, has provided, or may in the future  Sr-provide, financing and/or financial guarantees in connection with the acquisition of WHRC.\r] {O- x,ԍId. Cablevision also notes that an October 29, 1996 press release posted on PCC's Internet Web Site identifies  {Ov- xWHRC as one of several recently announced additions to the inTV Network. See Cablevision Opposition Exhibit 6, p.2 (Paxson Reports Third Quarter Financial Results, October 29, 1996, at http:/www.paxon.com/PR961029.htm).   S"- ` x6.` ` In reply, Paxson argues that WGOTTV's Complaint is timely filed and procedurally  xsound. Paxson contends that it filed a Complaint because Cablevision failed to respond to Paxson's  S- x[carriage request in writing within 30 days as required by Section 76.61(a)(2) of the Commission's rules.C ] yO0$-ԍ47 C.F.R.  76.61(a)(2).C  xPaxson notes that Cablevision concedes that it did not respond to Paxson's May 2 letter, in writing, as  xrequired. Paxson contends that it sent a followup letter on July 31, 1997 in an attempt to forestall the  xyneed to file a must carry complaint. According to Paxson, it was under no obligation to send the July 31,"ZN ,`(`(88"  x1997, and, as such, the letter is irrelevant to the proceeding. Paxson claims that it simply filed its must  S-carry complaint in order to preserve its rights.RD] yO@- xZԍPaxson also argues that there is conflicting Commission precedent regarding the circumstances in which the  {O- x<time for filing a must carry complaint will be tolled. See Complaint of Friendly Bible Church, Inc., 11 FCC Rcd  x17115 (1996) (where a cable operator responds to a broadcaster's request for carriage with a denial that fails to  x,explain the reason for refusing to carry, as required by Section 76.61(a)(2), the broadcaster is required to file a must  {Ob- xcarry compliant within 60 days in order to preserve its carriage rights) and Fouce Amusement Enterprises, Inc., 10  xFCC Rcd 668 (1995) (holding that a cable operator's response to a broadcaster's carriage request which did not (1)  xLoffer to commence carriage or (2) specify the conditions to be satisfied prior to commencement of carriage, nevertheless satisfied Section 76.61 and obviated the need for a must carry complaint). R  S- ` }x7.` ` Paxson further argues that WGOTTV and WHRC are not affiliates of a common network.  S`- xkAccording to Paxson, while WGOTTV receives a substantial portion of its programming from inTV,  xMWHRC obtains programming from a separate and distance entity "Paxnet." Paxson argues that the  S- x[Commission has previously held in Jovan Broadcasting Corp. that distinct entities owned by a common  xparent which provide television broadcast stations with programming that is comparable in content do not  S- xconstitute the same network for purposes of Section 76.56(b)(5) of the Commission's rules.] {O8-ԍ47 C.F.R. 76.55(b)(5). See Jovan Broadcasting Corp., 10 FCC Rcd 14,15 (1994). Paxson  S- xargues that while inTV and Paxnet may be owned by the same corporate parent, both are separate business  Sv-entities that provide different programming and utilize different distribution methods.xZvf ] {O|- x[ԍPaxson notes that inTV's programming consists of paid programming and programlength commercials.  xAccording to Paxson, Paxnet provides "direct response" programming. Paxson states that this programming is distributed by a 24 hour satellite feed, portions of which WHRC broadcasts during the day. x  S& - ` x8.` ` Cablevision responds to Paxson's replyK& ] yON- x;ԍWe will grant Cablevision's Motion for Leave to File Response to Reply, along with Paxon's Motion for Leave  xito File a Supplemental Pleading. We will correspondingly deny Cablevision's Opposition to Paxson's Motion for  xzLeave to File, but we will consider the merits of Cablevision's Supplemental Pleading incorporated into its  xOpposition Motion filed in response to Paxson's last filing. We do so for good cause in order to examine a complete record in this proceeding. K by stating that because the Commission has  S - xrecently rendered two adverse decisions regarding the inTV Network, 8] {O- xԍSee MediaOne, Inc., DA 971776 (CSR5012A, CSR4990M) (released August 20, 1997); Cablevision of  {O-Cleveland, L.P. et al., DA 972000 (CSR5006A, CSR 5021M, CSR 5028M) (released September 19, 1997). requiring affected cable systems  S - xLto carry the closer of two inTV affiliates under circumstances similar to those in the instant case, Paxson  xhas deliberately created "Paxnet," a new network designed as an artificial vehicle for avoiding the  x>Commission's rules. Cablevision argues that none of the information in PCC's corporate, financial or  Sb-other promotional materials suggest that WHRC is anything but an inTV Network affiliate.b] {O#- xYԍSee Cablevision Opposition at Exhibit 3 (Annual Report of Paxson Communications Company on Security and  xExchange Commission Form 10K for the Fiscal year Ending December 31, 1996); Exhibit 4 (Paxson's Broadcast  xTelevision Group downloaded on September 5, 1997 from Paxson Communications' Internet Web Site at:  xKhttp:/www.paxson.com/Tvmain_new.htm); Exhibit 6 (Paxson Reports Record Third Quarter Financial Results  xZInternet Web Site at://www.paxson.com/PR961029.htm); and Exhibit 7 (Letterhead of Paxson Communications  x-Corporation dated July 18, 1997 noting television stations "owned, managed, affiliated or to be acquired" listing"',`(`('"  {O- xBoston ĩ WGOT/WHRC). Cablevision also argues that Paxson did not state in its Reply that it has changed those materials or provided new information to the Commission. "b",`(`(88<"Ԍ S- ` Rԙx9.` ` Cablevision also argues that the programming schedules of WGOTTV and WHRC  S- x[submitted by Paxson do not demonstrate that Paxnet is a separate and distinct entity from inTV because  S- xthe schedules highlight three identical programs aired on both stations on the same day."] {Ot-ԍSee Paxson Reply, Exhibit 2 and 3 (programming identified was aired on September 17, 1997). Cablevision  S- xargues that the only other programming schedule submitted by Paxson is not dated.^] yO-ԍPaxson Reply, Exhibit 3 (broadcast schedule for WHRC).^ Cablevision further  x=argues that this schedule for WHRC only identifies blocks of air time labeled "Paxnet," "Praise TV," and  S:-"Children's Programming."#(:D] {O - x-ԍId. Cablevision also argues that this schedule bears a clear resemblance to the programming format used by  {O - xjinTV on their other inTV Network affiliates (programming schedules for inTV affiliates WOAC and WAKC,  {O - xattached at Exhibit 3 to Cablevision of Cleveland, L.P. et al.'s Consolidated Opposition to Must Carry Complaints,  {O|-(CSR5021M and CSR5028M) filed July 14, 1997.  #  S- ` x10.` ` Cablevision also disputes that the instant case is controlled by Jovan Broadcasting,  S- xCorp.,64 ] yO-ԍ10 FCC Rcd 14.6 a decision in which it states the Commission held that two unaffiliated, independently owned TV  xystations that chose to affiliate with two different home shopping networks owned by the same corporate  Sv- xparent were both entitled to carriage. Cablevision argues that unlike Jovan Broadcasting, Corp.,7v ] {O-ԍId.7 the two  xstations involved are themselves affiliated with the same corporate parent and the stations do not exercise distinct and independent program format decisions.  S - ` x11.` ` Paxson responds in its supplemental pleading that the manner in which it obtains  xprogramming for its stations is completely consistent with Commission rules. Paxson explains that it  xjsecures programming for some of its stations by selling producers of longform advertising airtime on the  S`- xinTV Network. Paxson then states that stations broadcasting inTV programming block out a fixed number  S:- xNof hours each day for what it terms "inTV time," during which the stations all broadcast the same  xprogramming from prerecorded videotapes. Paxson states that WGOTTV obtains programming from  S- xinTV and allocates a portion of its broadcast day to that programming. The remainder of WGOTTV's  xprogramming, according to Paxson, is devoted to local programming and longform advertising which is  S-broadcast during airtime purchased on WGOTTV rather than on all stations airing inTV programming.  SP- ` `x12.` ` Paxson also states that it secures programming for other stations, including WHRC, by  xselling producers of "direct response" longform advertising airtime on Paxnet, which it maintains is  S- x[separate and distinct from inTV. Paxson states that those stations receiving Paxnet programming are not  xobligated to coordinate with other stations or to reserve a fixed number of hours each day for Paxnet  xLprogramming. Most importantly, Paxson states that because Paxnet programming is run by stations not  S- xcarrying inTV programming, Paxnet programming generally attracts different programming than inTV,  Sd- xi.e., producers of long form advertising find value in purchasing airtime that is less expensive than inTV"dV ,`(`(88"  S- xtime but reaches a different, smaller group of stations than inTV. Paxson also notes that in addition to  x airing Paxnet programming, WHRC allocates airtime for the broadcast of local programming and long  S-form advertising purchased specifically for broadcast on WHRC.~] yO- xԍWith regard to Cablevision's argument regarding three identical programs being aired on both stations on the  xsame day, Paxson states that the duplicative programming consumed only 1.5 nonsimultaneous hours. Paxson argues  {O- xYthat given its description of the purchase of airtime on inTV and Paxnet, this de minimis duplication is the result of  xindividualized decisions of producers of longform advertising in their airtime purchases. Paxson notes that on  xoccasion, a program producer will make a decision to purchase time for a particular program on more than one  {O- x,station, or to purchase time on inTV as well as time on a station such as WHRC which does not carry programming  {O-from inTV.   Sb- ` x13.` ` In its opposition to Paxson's supplemental pleading, Cablevision argues that even if  xWHRC's programming is now different, allowing PCC to alter the programming on its stations after the  xdate on which Cablevision was required to respond to its must carry requests would be contrary to  xMadministrative due process. Finally, Cablevision argues that even if Paxnet is now, or becomes in the  S- xfuture, a separate network from inTV, this does not change the fact the programming decisions at both  xstations are still controlled by the same source Paxson's corporate parent, PCC. According to  x{Cablevision, such common control of programming makes this a case of first impression under the Commission's "dual network" policy.  S -( DISCUSSION  S - `  x14.` ` Based on the record before us, we conclude that WGOTTV satisfies the definition of a  x"qualified local commercial television station" under the Commission's must carry rules. We also disagree  xwith Cablevision that Paxson's complaint should be dismissed as procedurally defective because the  xcomplaint was filed prematurely in violation of our rules. Pursuant to Section 76.61(a)(2) of our rules,  xCablevision did not respond to Paxson's request for carriage of WGOTTV within the requisite 30 day  xtime period in order to notify Paxson that it would commence carriage of its station or state the reasons  S- xMfor its refusal to carry the station.B] yOj-ԍ47 C.F.R. 76.61(a)(2).B Conversations between the parties regarding signal quality and a  x/followup letter sent by Paxson regarding signal quality tests are irrelevant to the instant proceeding,  xyespecially in light of the fact that poor signal quality is not the reason Cablevision is refusing to carry the  xsignal of WGOTTV. Paxson was not in error to file the subject must carry complaint in order to preserve its rights.  S- ` nx15.` ` We also disagree with Cablevision that WGOTTV is not entitled to carriage on its Boston system because it is a duplicative network signal. Section 76.56(b)(5) of our rules states, in pertinent part:  XxA cable operator is not required to carry the signal of any local commercial television  station that substantially duplicates the signal of another local commercial television  Qstation that is carried on its cable system, or to carry the signals of more than one local  commercial television station affiliated with a particular broadcast network, as defined in  o76.55(f). However, if a cable operator declines to carry duplicating signals, such cable  ooperator shall carry the station whose community of license reference point, as defined  oin 76.53, is closest to the principal headend of the cable system. For purposes of this"d,`(`(88"  paragraph, substantially duplicates means that a station regularly simultaneously broadcasts  Bthe identical programming as another station for more than 50 percent of the broadcast  S-week.j] {O-ԍ47 C.F.R. 76.56(b)(5). See also 47 U.S.C. 534(b)(5).j   S`- ` x16.` ` Cablevision has not met its burden with regard to demonstrating that WGOTTV and  xWHRC are affiliates of a common network, or that one station substantially duplicates the signal of the  S- xother station. While the Commission has previously determined that inTV is a television network for must  S- xcarry purposes,Z] {O -ԍSee MediaOne, Inc. DA 971776 (CSR5012A, CSR4990M) (released August 20, 1997). ć Cablevision has not shown that the two stations in question are both affiliates of that  S- xparticular broadcast network as defined by Section 76.55(f) of our rules.?] yON -ԍ47 C.F.R. 76.55(f).? Here, WGOTTV and WHRC,  xboth independently owned stations, receive programming not from the same programming source, but from  Sr- xtwo separate and distinct entities inTV and Paxnet, respectively which are both owned by the same  x.corporate parent. Paxson has sufficiently demonstrated that both business entities, while owned by the  xsame corporate parent, provide different programming and utilize different distribution methods. In  x=addition to not meeting its burden with regard to network affiliation, Cablevision has not shown that the  xstations duplicate each other's signals by simultaneously broadcasting identical programming for more than 50 percent of the broadcast week.  S\- ` x17.` ` Finally, we do not agree that Cablevision has been denied administrative due process  xbecause it was required to make a carriage decision regarding WGOTTV based on facts that subsequently  xchanged. In this proceeding, Cablevision has been accorded every opportunity to present its objections  x^to the carriage of WGOTTV based on current facts and we have considered all of the relevant information presented.  Sl-1 ORDERING CLAUSES  S- `  x18.` ` Accordingly, IT IS ORDERED , pursuant to Section 614 of the Communications Act of  S- xm1934, as amended, (47 U.S.C. 534), that the petition filed by Paxson Boston License, Inc. IS  S- x.GRANTED. Cablevision of Boston, L.P. IS ORDERED to commence carriage of television station  x-WGOTTV, Merrimack, NH, within sixty (60) days from the release date of this Order on its Boston cable system.  S,- ` Bx19.` ` This action is taken pursuant to authority delegated under 0.321 of the Commission's Rules. x` `  hhFEDERAL COMMUNICATIONS COMMISSION x` `  hhGary M. Laden, Chief x` `  hhConsumer Protection and Competition Division x` `  hhCable S #B e #B rvices Bureau