******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. 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: ) ) Dynamic Cablevision of Florida, Ltd.)CSR-4722-A and ) Continental Cablevision of Jacksonville,)CSR-4707-A Inc., d/b/a Comcast of Broward County, Inc. ) and Continental Cablevision of ) Broward County, Inc. ) ) Petition for Reconsideration ) MEMORANDUM OPINION AND ORDER Adopted: June 2, 1997 Released: July 1, 1997 By the Commission: INTRODUCTION 1.WEYS Television Corp, licensee of commercial television station WEYS (Ch. 22), Key West, Florida, (hereinafter, "WEYS") has filed a petition for reconsideration of an order released by the Cable Services Bureau ("Bureau") on August 20, 1996. In that order, the Bureau granted the requests of Continental Cablevision of Jacksonville, Inc. d/b/a Continental Cablevision of Broward County, Inc. and Comcast of Broward County, Inc., and Dynamic Cablevision of Florida, Ltd. (hereinafter, "cable operators"), to modify the Miami-Ft. Lauderdale, Florida Area of Dominant Influence ("Miami ADI") and exclude WEYS from the cable communities the operators serve in Broward and Dade Counties, Florida. When the Bureau grants deletion requests, such as the ones at issue here, cable operators are relieved of their must carry obligations to carry that broadcaster's signal on the cable systems in the relevant communities. The cable operators filed an opposition to the petition and WEYS filed a reply. 2. WEYS also filed an Emergency Motion for Protective Order asking the Commission to maintain the status quo of the cable operators' channel line-ups during the pendency of its petition. WEYS filed this motion to prevent the cable operators from deleting the station from their channel line-ups while the Commission reviews the Bureau's actions. Before the Commission could act on WEYS's request, however, the station petitioned for a Writ of Mandamus in the United States Court of Appeals for the District of Columbia Circuit asking the Court to order the Commission to prevent the cable operators from deleting WEYS's signal. The Commission's General Counsel filed a response in this proceeding concluding that under Section 614(h), WEYS may be entitled to carriage on the cable systems in question until all administrative proceedings before the Commission have been completed. However, the General Counsel stated that because of the short time deadline established in the course of the emergency proceeding, and the difficulty of the issue involved, the Commission would not object to the Court's entering of a decree staying the effect of the Bureau's order and requiring the cable systems to continue to carry WEYS until 15 days after the issuance of an official interpretation of the statute. The Court granted the General Counsel's request and issued a stay on September 27, 1996. We provide an official interpretation of the relevant statutory language below. BACKGROUND 3.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. 4. Under the Act, the Commission is also directed to consider changes in ADI areas. Section 614(h)(1)(C) provides that the Commission may include additional communities within a station's television market or exclude communities from such station's television market to better effectuate the purposes of Section 614. 5.The Bureau's initial decision in this matter concluded that WEYS did not provide local service to the cable communities. The Bureau found that WEYS: (1) was geographically distant from the subject cable communities, with Key West (WEYS's transmitter site and community of license) some 126 miles from the Hialeah headend, 153 miles from the Pompano Beach headend and 150 miles from the Ft. Lauderdale headend; (2) did not provide over-the-air service to the cable communities, (3) had virtually no audience share in the cable communities; and (4) did not broadcast local programming specifically directed to the cable communities. The Bureau held that the station's reliance on its Spanish language "specialty station" status as an explanation of its failure to achieve higher ratings is contradicted by the high ratings achieved by the other two Spanish language stations, WLTV and WSCV, which show considerably higher ratings in the counties where the communities are located. The Bureau noted that WEYS, through its translators, had a brief history of carriage in the cable communities in question but found this to be of minimal weight in determining the scope of the station's market because the carriage obligations were imposed on the cable operators by the 1992 Cable Act and the Commission's rules. Finally, the Bureau found that the translators that retransmit WEYS's signal did not have independent carriage rights under Section 614, and were in fact not owned by WEYS but by another entity; even with translator carriage, the station failed to attain significant audience share. Based on this evidence, the Bureau found that the purposes of Section 614 were not served by retaining the subject communities within WEYS's mandatory carriage area. MARKET MODIFICATION Arguments 6.WEYS, in its petition, argues that the Bureau misapplied the statutory market modification test when redrawing the Miami ADI for must carry purposes. WEYS first argues that the Bureau's historical carriage analysis, as set forth in the decision below, unreasonably discriminates against new stations, like itself, which have not had the opportunity to develop a record of carriage. The station also argues that the Bureau misapprehended the importance of its local programming to the Spanish speaking residents of the affected cable communities. WEYS adds that it has moved to a 24 hour a day television news format with programming supplied by CBS Telenoticias, a Spanish language news service. The station states that the Commission should give due consideration to such a service in this appeal. The station argues that the Bureau also discounted the importance of the translators which retransmit its programming to the cable communities at issue and incorrectly reasoned that the ownership of the translators is critical in the analysis. It adds that the stations licensed to communities in Dade and Broward Counties are, in fact, retransmitted to the Florida Keys via translators owned by the Monroe County government. WEYS contends that the Bureau did not recognize the economic ties between itself and the Dade/Broward communities; the station states, for example, that over 90% of WEYS's advertising revenues have, in the past, been generated by local advertisers in Dade and Broward Counties. Finally, WEYS argues that it would suffer severe financial distress if the Bureau's decision was upheld because it would not be able to compete for advertising dollars with other market stations that currently serve the populous Dade County and Broward County region. 7.The cable operators oppose WEYS's petition, asserting that the Commission has weighed the evidence before it and reasonably concluded that, under a Section 614(h) proceeding, WEYS does not merit must carry status on their systems serving 25 communities in Broward and Dade Counties. The cable operators principally assert that the station has no nexus with the cable communities as WEYS is geographically remote with some cable communities as far as 150 miles away. Likewise, the cable operators argue that WEYS does not air material of local interest to its subscribers nor does the station provide examples of locally oriented programming. With regard to the translator issue, the cable operators urge that the Bureau acted properly in refusing to award must carry status to WEYS solely on the basis of translators, which themselves have no independent must carry rights. They suggest that a contrary ruling "would effectively eviscerate the distinction between full power and translator status deliberately incorporated into the must carry statute." As for audience share, the cable operators maintain that WEYS accounts for less than 1% of the viewing in Dade County and has no recordable viewers in Broward County. They argue that carriage of WEYS on the cable systems would constitute an unwarranted commercial windfall to the station by extending viewership far beyond the area it reaches through its own over-the-air transmission. The cable operators also argue that the financial impact on WEYS should not be the controlling consideration in this matter as Congress did not include the issue of financial impact in the market modification test. 8.In reply, WEYS states that the cable operators fail to recognize the significant competitive factors unique to the Miami ADI. WEYS argues that the loss of cable carriage in Broward and Dade Counties would result in the destruction of the station; it asserts that no commercial television station in this ADI could be successful without access to these two counties. Moreover, WEYS is licensed to a community that can only be located in the Miami ADI; because Key West is not on the distant border of other ADIs, it has no prospect of modifying its market to include additional communities. WEYS argues that financial considerations may be considered by the Commission in market modification proceedings because Congress did not intend the four statutory factors to be exclusive in the analysis. WEYS reiterates that it would be arbitrary and capricious to allow Miami stations access to the Florida Keys via translators but not allow WEYS access to the two counties at issue through the same technology. Finally, WEYS argues that the Commission should dismiss the cable operators' audience showing because some of the information, submitted by a private marketing consultant, is not verifiable. Discussion 9. The petition for reconsideration will be denied. Section 614(h) provides that the Commission shall consider market modification requests and in doing so: 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. 10. The Commission provided the following guidance in its Report and Order implementing Section 614 to aid decision making in market modification matters: 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. 11. We find that the Bureau has properly taken into account the statutory factors and the above guidance in making its decision. The approaches taken by the Bureau with regard to historic carriage (factor I) and coverage of the communities by other stations (factor III), are well reasoned and sufficiently articulated. As such, these factors do not warrant further re-examination and the Bureau's decisions pertaining to those issues are therefore affirmed. As for audience share (factor IV), we find no serious dispute that WEYS has no reportable share in Broward and Dade Counties in the Sun-Sat. 7:00A-1:00A ratings block, the principal block for determining a station's audience. Moreover, WEYS has not presented any audience evidence of its own demonstrating that it does have viewers in the relevant cable communities. Because we find the Nielsen data to reflect actual viewing patterns, we need not reach WEYS's argument regarding the audience data submitted by the cable operator. 12.With regard to whether a station provides coverage or other local service to the community (factor II), we find that the Bureau's reliance on Grade B contour coverage and distance to the community, in terms of both geography and mileage, are fully supported by the Section 614(h), its legislative history, and Commission precedent. As the Bureau recognized, the Commission, in its Broadcast Signal Carriage Report and Order, 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." Noting these directives, and taking into account the size and structure of the Miami ADI, and the cable operators persuasive showings with respect to the other factors, the Bureau correctly considered geography and signal coverage in the market modification equation. The communities at issue are geographically distant from Key West, which is 126 miles from the Hialeah headend, 153 miles from Pompano Beach headend, and 150 miles from the Ft. Lauderdale headend. The legislative history specifically notes that when making its market determinations, 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 to be part of the station's market. Relying on this language, the Bureau properly considered the stations' distance to the cable community as measured by mileage and geographic features separating the communities. With regard to WEYS's programming offerings, we find that the introduction of a new service, CBS Telenoticias, does not bolster the station's localism showing, and its presence is not decisionally significant in this case. Finally, while WEYS's generation of advertising revenue from the areas at issue is probative evidence that it has some local presence, the evidence presented here does not outweigh the cable operators' showing under the four statutory factors. 13.We affirm the Bureau's holding that translator coverage, particularly in highly dense population areas such as Miami, does not lessen the relevance of the parent's failure to directly serve the subject cable communities. Commercial translators are secondary service stations that are explicitly not entitled to carriage in their own right and the service provided by WEYS's translators here are of limited significance in the market modification analysis. On balance, the translators here appear not to be a reflection of the underlying market area of WEYS, filing in gaps in the station's service area, but an extension of it. Finally, we dismiss, as premature, WEYS's arguments about Miami-area stations using translators to reach Key West because those stations are not subject to deletion requests by cable operators in Key West in this particular case; such arguments would only be considered, if and when, these cable operators file market modification petitions with the Commission. 14.We find WEYS's financial injury argument also to be unpersuasive. WEYS's financial claims are unsupported and, therefore, cannot be considered in the market modification equation. EMERGENCY MOTION FOR PROTECTIVE ORDER Arguments 15.As noted above at paragraph 2, WEYS asked us to order that it has a right to carriage while we consider the petition for reconsideration of the Bureau's market redefinition decision. That request is now moot in light of the D.C. Circuit's stay of the Bureau's decision (in which the Commission acquiesced), but we take this opportunity to provide an interpretation of Section 614(h)(1)(C)(iii). That provision, which we have not previously had occasion to interpret, states that "[a] cable operator shall not delete from carriage the signal of a commercial television station during the pendency of any proceeding pursuant to this subparagraph." The question before us is when the statutory prohibition on deleting a station ends -- after the Bureau's ruling, after the completion of all administrative proceedings, or after the completion of the judicial process. 16. WEYS states that it is Congress' directive not to allow a cable operator to delete the signal of a commercial television station during the pendency of a market modification proceeding. The station defines the term "pending" in this instance by reference to Section 1.65(a) of the Commission's rules, which states in part: For the purposes of this section, an application is "pending" before the Commission from the time it is accepted for filing by the Commission until a Commission grant or denial of the application is no longer subject to reconsideration by the Commission or to any review by any court. WEYS asserts that a matter is pending if an application for review, petition for reconsideration, or Commission reconsideration on its own motion is still under consideration by either the Bureau or the full Commission. WEYS argues that Section 1.65(a) is controlling because the note attached to Section 76.7, discussing petitions for special relief in the market modification context, states that "the provisions of Section 1.65(a) of this chapter are wholly applicable to pleadings involving Section 76.7." Since the cable operators filed petitions for special relief, the station summarily states that Section 1.65(a) is applicable here. 17.In opposition, the cable operators argue that there is no provision in the Commission's rules which automatically stays the effective date of the Bureau's August 20, 1996, market modification order. The cable operators state that, to the contrary, Section 1.102(b) indicates that an order is effective on the date of release and that a stay is otherwise at the discretion of either the Commission, if an application for review is filed, or the Bureau, if a petition for reconsideration is filed. 18.The cable operators claim that WEYS is required to file a separate motion to satisfy the criteria for a stay. The cable operators argue that the station cannot satisfy the criteria necessary to justify a stay under the Holiday Tours/Virginia Petroleum Jobbers Ass'n test set forth by the U.S. Court of Appeals for the District of Columbia. The cable operators claim that there is no harm to WEYS because the station has failed to establish viewership in the cable communities at issue. The station is not likely to succeed on the merits and prevail on appeal because this case presents no novel issues and the Bureau's decision is supported by precedent. The cable operators also claim they would be harmed by a stay because continued carriage of WEYS precludes receiving revenue that they could otherwise obtain from carrying other, more desirable, programming. 19.In reply, the station asserts that the cable operators completely ignore the original argument concerning the definition of the term, "pending", and instead rely on Section 1.102(b) of the Commission's rules. WEYS takes the position that this generic rule controls orders issued by all of the bureaus under delegated authority unless there is a rule to the contrary. The station argues that the issue in this case is not whether the order is effective, but rather whether, under the statute and the Commission's rules, the matter is still pending. WEYS also argues that a discretionary stay is not necessary because the effective date of the order is not at issue. Discussion 20.We hold that a commercial television station may not be deleted from a cable system until the Commission has completed all administrative proceedings pertaining to a particular market redefinition. The statute straightforwardly forbids such deletion "during the pendency of any proceeding pursuant to this subparagraph" (i.e., the market redefinition section). We conclude that the congressional prohibition plainly means that a cable operator may not delete a station while any administrative proceeding regarding the particular market redefinition is pending, before either the Bureau or the Commission. There can be no question that Commission reconsideration or review of a Bureau market redefinition ruling is a "proceeding" pursuant to the market redefinition section. Thus, by specifying that stations may not be dropped while "any proceeding" involving market redefinition is pending, Congress clearly intended to include Commission-level proceedings. In doing so, Congress has overridden the Commission's usual practice, relied on by the cable operators, that "actions taken pursuant to delegated authority shall . . . be effective upon release of the document containing the full text of such action." 47 C.F.R.  1.102(b). 21.At the same time, we reject the suggestion that the statute accords a station must carry rights through the completion of judicial review. We do not believe that proceedings in a court of appeals can fairly be said to be what Congress meant by a proceeding "pursuant to" the market redefinition section. That section places on the Commission the responsibility for defining a station's market, and when the Commission has rendered a final, appealable decision, the statutory market redefinition proceeding terminates. In other words, Congress intended to define the Commission's functions, not those of the courts of appeals. Accordingly, judicial review is properly considered to be a proceeding of another sort, taken pursuant to Section 402 of the Communications Act, and not one undertaken "pursuant to" Section 614(h)(1)(C). 22.We also reject the argument that because Section 614(h)(1)(C)(iii) prohibits dropping a station while a proceeding is "pending" and Section 1.65 of our rules defines "pending" to include -- "for purposes of th[at] section" -- appellate review, Congress intended to guarantee carriage through the completion of judicial proceedings. The agency regulation, which sets forth an applicant's duty to update a pending application and has been incorporated into the cable context by the note to Section 76.7 of our rules, has no bearing on what Congress meant in the very different context of the must carry statute at issue here. In that regard, we have held in the past that when an application is "pending" for purposes of Section 1.65, it is not necessarily "pending" for other purposes. Indeed, the specification of such a broad definition of "pending" in Section 1.65 suggests that the ordinary meaning of the word in the administrative context does not include judicial review. Moreover, as noted above, we believe that Congress intended to regulate proceedings before the Commission and not before the courts. Thus, a Commission proceeding is not pending within the meaning of Section 614(h)(1)(C)(iii) while it is before the court of appeals. 23.As noted above, the Court of Appeals stayed the Bureau's order pending Commission review, which effectively prohibited deletion of WEYS. At that time, the Court also ordered that its stay would last 15 days beyond the issuance of our interpretation of Section 614(h)(1)(C)(iii). Although the Court's stay ends 15 days after this Order is released, we find, for this case and others that may arise in the future, that the statute guarantees carriage for 30 days after the release of Commission-level market redefinition orders. We consider a case to remain "pending" for those 30 days because during that time we may reconsider our decision sua sponte or at the request of a party. Market redefinition proceedings will also be considered to be pending after a Bureau order during the 40-day period in which the Commission may review the Bureau order on its own motion. ORDERING CLAUSES 24. Accordingly, IT IS ORDERED, that the petition for reconsideration filed by WEYS Television Corp. on September 19, 1996 IS DENIED. 25.IT IS FURTHER ORDERED that the Emergency Motion for Protective Order IS DISMISSED as moot in light of the above discussion. 26.This action is taken pursuant to statutory authority found in Sections 1, 4(i), 5(c), 405, and 614(h)(1)(C) of the Communications Act of 1934, as amended, 47 U.S.C.  151, 154(i), 155(c), 405, 534(h)(1)(C). FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary