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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 Petition of ) ) Paxson Phoenix License, Inc. ) ) For Modification of Television Market of ) CSR 5188-A Station KWBF(TV), Flagstaff, Arizona ) MEMORANDUM OPINION AND ORDER Adopted: April 21, 1998 Released: April 23, 1998 By the Deputy Chief, Cable Services Bureau: 1. Paxson Phoenix License, Inc. ("Paxson") filed the captioned petition which seeks to include within the market of television station KWBF(TV), Flagstaff, Arizona the twenty six Communities listed on Attachment A. An opposition to the petition has been filed by Cable One, Inc. ("Cable One"), which operates cable systems in sixteen of the Communities as identified on Appendix A. Neither Arizona CableComm, Indevideo Company, Inc. nor Cablevision of Sedona, who provide cable service in the other ten communities, filed any opposition to the petition. Paxson filed a reply to Cable One's opposition. 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 non-cable 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 non-cable 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 non- cable homes, and significantly viewed surveys typically measure viewing only in non-cable 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. 6. Adding communities to a station's market generally entitles that station to insist on cable carriage in those communities. However, this right is subject to several conditions: 1) a cable system operator is generally required to devote no more than one-third of the system's activated channel capacity to compliance with the mandatory signal carriage obligations, 2) the station is responsible for delivering a good quality signal to the principal headend of the system, and 3) the system operator is not required to carry the signal of any station whose signal substantially duplicates the signal of any other local signal carried, or the signals of more than one local station affiliated with a particular broadcast network. If, pursuant to these requirements, a system operator elects to carry only one such duplicating signal, the operator is obliged to carry the station from the ADI whose city of license is closest to the principal headend of the cable system. Accordingly, depending upon the circumstances involved, the addition of communities to a station's market may have the following consequences. It may guarantee that station's carriage in the subject communities. Should there be more must-carry stations than one-third of the system's channel capacity, it would provide the system operator with an expanded list of must-carry signals from which to choose. Should the station be a duplicating network station, it will determine which station has priority carriage in the subject communities added. MARKET FACTS AND ARGUMENT 7. Station KWBF is located in the Flagstaff, Arizona ADI. Paxson requests that the Commission modify the television market of KWBF by adding the Communities listed on Appendix A, which are located in Yavapai County and Navajo County, Arizona, in the Phoenix ADI, to the station's market. Paxson contends that KWBF provides local service to these Communities, and argues that the single county Flagstaff ADI does not reflect the full extent of KWBF's local market, a situation the Congress anticipated in adopting the market modification provisions of Section 614(h)(1)(C). Paxson asserts that KWBF is carried on cable systems serving a number of the Communities, covers almost all of the Communities with a Grade B signal, and provides locally oriented programming specifically targeted at viewers in the Communities. Paxson asserts further that Nielsen and other objective sources recognize a nexus between Coconino County, Arizona, the station's home county, and Navajo and Yavapai Counties, which together comprise an economically coherent "northern tier" of the Phoenix market that is distinguishable from the more densely populated urban portions of that market. 8. Paxson addresses the first statutory market modification factor by stating that KWBF has a history of carriage on the cable systems in Camp Verde, Cottonwood, Dewey/Humbolt, Keams Canyon, Lake Montezuma, Mayer, Sedona, Yavapai County, Oak Creek Village, and Verde Village, making KWBF available to 8,342 cable subscribers in Yavapai and Navajo Counties. Paxson contends that carriage in these communities supports inclusion of all of the Communities on Appendix A within KWBF's market, arguing that such wide spread carriage demonstrates that the cable operators in both counties consider KWBF to be a local station, citing Comcast of Central New Jersey, DA 97-1191 (Cable Serv. Bur., released June 5, 1997). Paxson notes that Station KNAZ-TV, also licensed to Flagstaff, Arizona, is carried on many of the subject cable systems and argues that carriage of that station from the same community as KWBF establishes a nexus between the two stations' community of license and the cable communities, citing TWI Cable, Inc., 12 FCC Rcd 13187 (CSB 1997). 9. With respect to the second statutory factor, Paxson states that all of the Communities are within or just beyond the fringes of KWBF's Grade B signal contour. Paxson also states that the average mean distance from the station to the subject Communities is only 47.8 miles. Paxson claims these two factors establish the station's local coverage of, and geographic proximity to, the relevant Communities under standards approved in other market modification decisions. Paxson also provides synopses of topics covered in certain episodes of two of KWBF's half hour weekly programs -- "Community Coffee Break" and "Navajo Nation Update" -- as evidence that KWBF carries programming directed specifically to the Communities and to the Native American population making up large portions of those Communities. Paxson asserts that Station KUSK, licensed to Prescott and the only station licensed to any of the Communities at issue, does not provide coverage of Native American issues and events as extensively as KWBF. Paxson also contends that KUSK does not provide Grade B coverage of Navajo County, and for that reason KUSK's limited amount of local programming cannot be deemed to address issues of local interest to Navajo county. Paxson argues that the failure of KUSK and other stations to provide local service to the Communities may be considered an enhancement criterion in market addition cases. Paxson argues further that any local coverage provided by other stations should not be weighed against the market modification request, but would only render this factor inapplicable. 10. Finally, Paxson argues that other factors weigh in favor of inclusion of the Communities in KWBF's market. First, Paxson notes that Nielsen Media Research includes both KWBF and the Communities in the Phoenix DMA. Paxson argues that although the Commission has retained for now use of Arbitron's ADIs as the presumed definitions of television markets, it has recognized that Nielsen's DMAs represent a more accurate current measure of television markets and indicated that Nielsen market information may be considered when weighing a market modification request. Paxson contends further that the ties between the station's home county and the Communities are reinforced by demographic similarities shared among them, including census figures, Native American populations, population densities, and per capita incomes. 11. Cable One, who operates cable systems serving sixteen of the Communities at issue, contends Paxson failed to establish that the statutory factors considered in connection with television station market modification requests have been satisfied with respect to the Communities, and therefore failed to meet its burden of showing that the requested market modifications should be made. First, Cable One contends Paxson presented its case on a county-wide basis rather than a community-specific basis, and asserts that the Commission has declined to make use of such county-wide information in analyzing market modification petitions. In this connection Cable One points to Paxson's claim that carriage of KWBF on cable systems in some of the communities demonstrates that cable systems throughout both Yavapai and Navajo Counties consider KWBF to be a local station. It also points to Paxson's reliance on the average distance of the Communities from KWBF to establish proximity of the station to the Communities and to the emphasis Paxson places on the county-wide focus of the weekly "Community Coffee Break" and "Navajo Nation Update" programs. Cable One notes that Section 614(h)(1)(C) focuses on "communities" in the listing of market adjustment factors that must be considered, and not on counties. 12. Next, Cable One attacks Paxson's claim that KWBF is local to the Communities first by stating that KWBF is not carried in the sixteen communities served by its cable systems and has no history of carriage in those communities. Cable One argues this history of lack of carriage means that KWBF cannot satisfy this crucial factor with respect to communities served by Cable One. Cable One asserts that carriage of KWBF in some of the other communities began after enactment of the must carry provisions in 1992 and argues that such carriage history should not be given significant weight in the market modification process. Cable One further asserts that commencement of carriage would be disruptive to subscribers on its cable systems, because other programming would have to be displaced for carriage of KWBF. Cable One also discounts the significance of the carriage of KNAZ, Flagstaff, on the grounds that cable subscribers desire carriage of KNAZ as an alternative source of NBC Network programming when the Phoenix NBC affiliate's signal is disrupted due to rain, fade, and other natural and technical transmission difficulties. 13. Cable One argues for a reduction of the weight given to KWBF's Grade B coverage of the Communities by noting that Paxson has claimed in other cases that Grade B coverage alone should not be considered determinative of the "local" status of a station for market modification purposes. Cable One also asserts that Holbrook, Arizona, served by one of its cable systems, is located well outside of KWBF's Grade B coverage. Pointing out that Paxson's data shows distances from KWBF to some of the cable communities ranging between 46 and 76 miles, Cable One argues that Paxson's reliance on an average distance to show station proximity to the communities is misleading. Cable One contends instead that the actual distances preclude any finding of ties between KWBF and the Communities. 14. Cable One contends that information submitted by Paxson shows that KWBF provides only a minimal amount of programming directed specifically to the Communities. Cable One asserts that the two weekly shows highlighted by Paxson represent only a very small percentage of KWBF's total broadcast schedule, and that the balance of KWBF's programming consists of infomercials and religious programming. Cable One claims an inspection of KWBF's program schedules show them to contain no listings for any news, sports or community interest programming. Cable One contends further that the weekly "Navajo Nation Update" program may be considered as local programming only with respect to the Navajo population of the Communities at issue. 15. Cable One contends the sixteen communities served by its cable systems are served by local television stations, licensed to Phoenix, as well as by KNAZ, licensed to Flagstaff, both through their carriage on Cable One's cable systems and through the stations' off-air Grade B coverage. Cable One claims the Phoenix stations' sports news programming and carriage of the Phoenix professional football, basketball and baseball games represent examples of programming of local interest to the Communities provided by those stations. Cable One also provided a copy of the television station programming schedules from The Journal, a Camp Verde, Arizona newspaper, as evidence of the extent of local news provided by the Phoenix stations. Cable One argues that the coverage of local issues by these other station preclude giving any weight to KWBF's minimal local programming effort. Cable One also notes that the Communities are all located in the Phoenix ADI, and emphasizes that ADIs are the measure of local television service adopted by the Congress and the Commission. 16. Finally, Cable One points out that Paxson claimed no KWBF viewing in the Communities. To confirm that KWBF has no viewing, Cable One provided a Media Strategies, Inc. report, which states that "KWBF-TV does not have any viewing in these counties." Cable One also provided a copy of the 1997 Cable and Station Coverage Atlas to establish that KWBF is not significantly viewed in either Navajo or Yavapai County. Cable One contrasts that with the Phoenix stations, some of which are listed as significantly viewed in those counties. Cable One argues that the Commission has rejected claims that such viewing patterns are irrelevant in market modification cases where an addition of communities is at issue. 17. In reply, Paxson reiterates the points presented in the petition, and contends further that KWBF's low viewership in communities served by Cable One is not dispositive of the scope of the station's market. In this regard, Paxson argues that the information provided with respect to other statutory factors amply demonstrates a nexus between KWBF and the Communities at issue. DISCUSSION AND ANALYSIS 18. As noted earlier, Station KWBF is located in the Flagstaff, Arizona, ADI. Paxson, licensee of KWBF, seeks to include the Communities, located within the Phoenix, Arizona, ADI, in KWBF's market. Cable One, which operates cable systems within sixteen of those Communities opposes this market modification request. We resolve this matter by considering the information of record under the statutory factors set out in Section 614(h)(1)(C)(ii) and conclude that all of the Communities listed on Attachment A should be included in KWBF's market. Historic Carriage of the Station and Other Stations 19. KWBF is currently carried on cable systems serving ten of the Communities at issue. We find that such voluntary carriage of KWBF on Arizona Cablecomm's systems in Camp Verde, Cottonwood, Dewey/Humbolt, Lake Montezuma, Mayer, and Verde Village, on Indevideo Company, Inc.'s system in Keams Canyon, and on Cablevision of Sedonia's systems in Sedona, Yavapai County, Oak Creek, and Verde Village demonstrates an interest in and connection with KWBF in these communities. 20. KWBF has no history of carriage in the other sixteen Communities served by the Cable One's cable systems. However, under Section 614(h) we must consider not only whether the cable system carries the station subject to the modification petition, but also whether "other stations located in the same area historically have been carried on the cable system . . . ." The record shows carriage of KNAZ-TV, Flagstaff, (also KWBF's community of license), on cable systems serving fourteen of the communities at issue served by Cable One's cable systems, which are not carrying KWBF. The ability of the other Flagstaff station to reach cable viewers in communities where KWBF is not carried impacts on the ability of KWBF to compete with the other Flagstaff station. Such carriage of KNAZ-TV and the exclusion of KWBF impacts heavily on the ability of KWBF to reach viewers in the Communities at issue that KNAZ-TV is able to reach. We believe such carriage of KNAZ-TV is indicative of the interest in the subject Communities in programming of Flagstaff stations and is evidence of a market nexus between Flagstaff and the cable communities. For these reasons, the carriage of KNAZ-TV, Flagstaff in communities within, near and just beyond KWBF's Grade B coverage adds substantial weight, along with that given other identified supporting factors, to our determination as to whether to include such communities within KWBF's market. Cable One has not demonstrated why KWBF should be treated differently from KNAZ-TV. Station Coverage and Local Service 21. Paxson has presented evidence which shows that all of Communities except Holbrook and Keams Canyon are within KWBF's Grade B coverage. The Commission recognized in the Must Carry Order 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 contour coverage over the cable community or is located close to the community in terms of mileage." This factor is particularly relevant in cases where a party asks that a community be deleted from a station's television market and other evidence on which a decision might be based is lacking. In cases of this type, while not to be used an an absolute measure of the scope of a station's market, the existence of Grade B service is relevant under the station coverage and local service factor. News Coverage and Coverage of Sporting Events of Local Interest 22. We reject Cable One's contention that any weight given to KWBF's minimal local programming must be offset by the local programming of the Phoenix stations carried on cable systems serving the Communities. In this connection, the record contains no description of the programming of the Phoenix stations, other than that those stations carry sports news and games of Phoenix professional sport teams. Also, the record does not clearly establish that the Phoenix stations provide Grade B coverage of the Communities. Consequently, off-air service of the Communities by the Phoenix stations has not been firmly established. Local service may be provided by the Phoenix stations through their carriage on cable systems in the Communities. As noted earlier, KWBF may also be credited with local service to those Communities located within its off-air Grade B coverage. In any event, while an absence of other television station coverage may enhance a station's market inclusion request, other station coverage when present is inapplicable as a factor and does not weigh against a station seeking to add communities to its market. Station Viewing in the Communities 23. Cable One provided evidence tending to show that KWBF has little or no viewership in either Navajo or Yavapai County. Paxson provided no credible evidence to the contrary. The weight given to KWBF with respect to this factor must be tempered by, and considered along with, any other nexus to the Communities at issue demonstrated on this record. We have indicated that communities may be added to a station's market even where a station has no measurable viewing audience in the communities. See Channel 56 of Orlando, Inc., 12 FCC Rcd 4071 (CSB 1996). KWBF's lack of audience will be taken into account in determining whether the Communities at issue should be added to the station's market. SUMMARY 24. Pursuant to the provisions of Section 614(h)(1)(C), we will modify the television market of KWBF to include the Communities listed on Attachment A as part of the market of Station KWBF, as well as within the Phoenix, Arizona ADI. The record establishes that KWBF provides Grade B coverage to all of the communities with the exception of Holbrook and Keems Canyon. This factor in conjunction with other evidence introduced in support of the requested modification persuades us that the relief requested in this instance should be granted 25. Carriage of KWBF on cable systems serving ten of these communities, including Keems Canyon, is also established. Additionally, Station KNAZ-TV, licensed to Flagstaff, the community of license of KWBF, is carried in fourteen of these communities, including Holbrook. KWBF's carriage in communities interspersed among the included Communities, and cable system carriage of another Flagstaff station in fourteen of these communities, provide strong evidence of an economic nexus between the station and the included communities. These factors establish that the purposes of Section 614(h)(1)(C) would be better effectuated by including these communities in KWBF's market. Carriage of KWBF on cable systems in all communities within the station's Grade B coverage and in communities in which another Flagstaff station is carried will ensure that the station is carried in communities that form its economic market as well as enable KWBF to reach the same viewers that the other Flagstaff station is able to reach. 26. As Paxson points out, the Commission has concluded that Nielsen Media Research's DMA market assignments provide the most accurate method for determining areas served by local television stations. Although the Commission retained the use of Arbitron's ADI as the definition of television station markets because of concerns about transition issues relating to use of DMAs, Nielsen's placement of both KWBF and the Communities at issue in the Phoenix DMA serves to confirm our conclusion that the included communities should be considered part of KWBF's market. 27. We reject Cable One's argument that any carriage of KWBF as a result of this market modification would be disruptive to subscribers through displacement of other programming. The statutory must carry provisions create a clear statutory right of carriage that applies notwithstanding prior arrangements of cable operators. The Commission has indicated that inconvenience, marketing problems, or the need to reconfigure the basic tier are not sufficient reasons for denying a channel positioning request for a must carry signal. We reject also Cable One's argument that the petition should be dismissed because Paxson presented its case on a county-wide basis. As our discussion above shows, we have been able to relate the information provided on this record to the Communities at issue in our consideration of the statutory factors applicable to this market modification case. Finally, because the facts and circumstances of each market modification case differ, it is immaterial that Paxson may have argued that Grade B coverage was not determinative of local service in another case. 28. Based on a totality of the statutory factors, including carriage of the station in many communities within its grade B coverage area, Nielsen's placement of the station in the Phoenix DMA, carriage of another Flagstaff station in fourteen of the communities, and limited local programming, we conclude that the Communities listed on Appendix A should be added to KWBF's market. ORDERING CLAUSES 29. For the foregoing reasons, IT IS ORDERED, pursuant to Section 614(h) of the Communications Act of 1934, as amended, 47 U.S.C. 534(h), and Section 76.59 of the Commission's Rules, 47 C.F.R. 76.59, that the petition for special relief filed on behalf of Paxson Phoenix License, Inc. in File No. CSR-5188-A IS GRANTED, and the television market of television station KWBF IS MODIFIED to include the Arizona communities of Cottonwood (AZ0003, AZ0204 and AZ0124), Clarkdale (AZ0029 and AZ0123), Holbrook (AZ0004), Navajo County (AZ0121 and AZ0122), Joseph City (AZ0217), Prescott (AZ0014), Prescott Valley, (AZ0145), Chino Valley (AZ0306), Prescott-Yavapai Indian Tribe (AZ0352), Yavapai County (AZ0146 and AZ0108), Winslow (AZ0009), Cornville (AZ0284), Page Springs (AZ0285), Camp Verde (AZ0166), Dewey/Humbolt (AZ0185), Lake Montezuma (AZ0186), Mayer (AZ0184), Verde Village (AZ0167), Keams Canyon (AZ0058), Sedona (AZ0336), and Oak Creek Village (AZ0174). 30. This action is taken pursuant to authority delegated by 0.321 of the Commission's Rules, 47 C.F.R. 0.321. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau APPENDIX A Communities Affected by Petition File No. CSR 5188-A Name of Community Cuid No. Cable System Operator (All Arizona) Cottonwood AZ0003 Cable One, Inc. Clarkdale AZ0029 Cable One, Inc. Clarkdale (uninc.) AZ0123 Cable One, Inc. Cottonwood (uninc.) AZ0124 Cable One, Inc. Holbrook AZ0004 Cable One, Inc. Navajo County AZ0121 Cable One, Inc. Joseph City AZ0217 Cable One, Inc. Prescott AZ0014 Cable One, Inc. Prescott Valley AZ0145 Cable One, Inc. Chino Valley AZ0306 Cable One, Inc. Prescott-Yavapai Indian Tribe AZ0352 Cable One, Inc. Yavapai County AZ0146 Cable One, Inc. Winslow AZ0009 Cable One, Inc. Navajo County AZ0122 Cable One, Inc. Cornville AZ0284 Cable One, Inc. Page Springs AZ0285 Cable One, Inc. Camp Verde AZ0166 Arizona CableComm Cottonwood AZ0204 Arizona CableComm Dewey/Humbolt AZ0185 Arizona CableComm Lake Montezuma AZ0186 Arizona CableComm Mayer AZ0184 Arizona CableComm Verde Village AZ0167 Arizona CableComm Keams Canyon AZ0058 Indevideo Company, Inc. Sedona AZ0336 Cablevision of Sedona Yavapai County AZ0108 Cablevision of Sedona Oak Creek Village AZ0174 Cablevision of Sedona