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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: ) ) KSWB, Inc. ) CSR-5106-N ) Channel 51 of San Diego, Inc. ) CSR-5189-N ) Petition for Waiver of  76.156(a) of ) Commission's Rules ) MEMORANDUM OPINION AND ORDER Adopted: August 11, 1998 Released: August 19, 1998 By the Deputy Chief, Cable Services Bureau: INTRODUCTION 1. KSWB, Inc., licensee of television broadcast station KSWB-TV (Channel 69), San Diego, California, filed a petition, pursuant to 47 C.F.R.  76.7, for waiver of 47 C.F.R.  76.156(a), which provides an exemption from the Commission's syndicated program exclusivity rules for stations that are significantly viewed within a community served by a cable system. Channel 51 of San Diego, Inc. ("Channel 51"), licensee of television broadcast station KUSI-TV (Channel 51), San Diego, California, filed comments in support of KSWB's petition and subsequently filed its own similar petition, pursuant to 47 C.F.R.  76.7, for waiver of 47 C.F.R.  76.156(a). KSWB's petition is opposed by KCOP Television, Inc. ("KCOP"), licensee of television broadcast station KCOP(TV) (Channel 13), Los Angeles, California. KCOP also filed an opposition to Channel 51's petition. Because of the similarity of the issues raised by both petitions, they are consolidated herein for consideration. BACKGROUND 2. Under the Commission's cable television syndicated programming exclusivity rules, a cable system may not import duplicating programming which has been purchased by a local station on an exclusive basis. The Commission's rules in general provide stations such protection within a station's 35-mile geographic zone. However, a local station may not exercise this right if an otherwise distant station is considered "significantly viewed" within the community served by the cable system. The significantly viewed exemption to the Commission's exclusivity rules is based on an otherwise distant station establishing that it gets a "significant" level of over-the-air viewership in a subject community. Should this viewership level be met, the station is no longer considered distant for purposes of the application of the Commission exclusivity rule since it has established that it can be received over-the-air in the subject communities. Stations KSWB and Channel 51 seek a waiver to remove station KCOP's significantly viewed status in San Diego County where the subject communities and cable systems are located. The result of this would be that KCOP no longer would be exempt from the application of the Commision's exclusivity rules because of its loss of significantly viewed status in the subject communities San Diego County. Thus, stations KSWB and Channel 51, which have purchased exclusive right to distribute certain syndicated programming would be able to request that local cable systems blackout such programming carried by KCOP. 3. In KCST-TV, Inc., 103 FCC 2d 407 (1986) ("KCST-TV"), the Commission held that a waiver of the Section 76.92(f) exemption from the network program nonduplication rules may be obtained, provided it could be demonstrated that for two consecutive years a station was no longer significantly viewed in the communities served by the cable system. The Commission indicated that it must be shown that the station's viewing level in the communities falls short of the appropriate standards based either on community, or system specific, noncable viewing data, by at least one standard sampling error. For each year, the data must be obtained by means of an independent professional survey with the data distributed proportionately among the relevant cable communities. The surveys must be taken during two one-week periods that are also separated by at least thirty days. Not more than one of the surveys may be taken between April and September of each year. PETITIONERS' ARGUMENT 4. KSWB and Channel 51 seek a waiver of the significantly viewed exemption of the Commission's syndicated program exclusivity rules in order to assert syndicated program exclusivity protection against against Los Angeles station KCOP, which is currently on the Commission's list of stations that are "significantly viewed" in San Diego County, California. The subject cable systems operated by Cox Communications South, Cox Communications North, and Southwestern Cable are located in San Diego County and within the geographic zone of protection of stations KSWB-TV and KUSI(TV). KSWB and Channel 51 argue that, although KCOP is included in the list of significantly viewed stations in San Diego County, the station is no longer significantly viewed in the communities served by these three cable systems. In support of the contention that KCOP is no longer significantly viewed in the communities at issue, KSWB submitted a study from Nielsen Media Research ("Nielsen Study") based on audience viewing data from the cable communities during the February 1996, May 1996, February 1997, and May 1997 audience survey periods, or "sweeps," of noncable households. According to the Nielsen Study, KCOP's average weekly circulation was as shown on the following tables: Cox Communications North Share Total Standard Average Weekly Standard Survey Period Viewing - % Error Circulation - % Error February 1996 0.00 0.00 0.00 0.00 May 1996 0.26 0.14 6.68 3.77 February 1997 0.09 0.06 5.77 3.41 May 1997 0.59 0.65 1.88 1.90 Cox Communications South Share Total Standard Average Weekly Standard Survey Period Viewing - % Error Circulation - % Error February 1996 0.00 0.00 0.00 0.00 May 1996 0.01 0.01 0.83 0.84 February 1997 0.00 0.00 0.00 0.00 May 1997 0.03 0.03 0.97 0.96 Southwestern Cable Share Total Standard Average Weekly Standard Survey Period Viewing - % Error Circulation - % Error February 1996 0.00 0.00 0.00 0.00 May 1996 0.00 0.00 0.00 0.00 February 1997 0.61 0.49 3.36 3.40 May 1997 0.29 0.25 3.57 3.57 Based on these data, KSWB and Channel 51 argue that KCOP failed to meet the Commission's standard for a significantly viewed independent station in the communities noted during the indicated survey periods. It is contended that this viewing data clearly demonstrates that during the past two years, KCOP has been unable to attract the proportion of noncable viewers within the identified communities necessary to be regarded by the Commission as significantly viewed. 5. In opposition, KCOP contends that petitioners have failed to satisfy their burden of meeting the audience survey requirements for the rule waiver being sought. KCOP argues that the waiver request should be denied in any event to preclude a substantial disruption of viewing of station KCOP in San Diego County established for more that 25 years. KCOP attacks the survey submitted by KSWB first by arguing that it is not an independent professional survey as required, because KSWB station employees performed critical sampling and diary analysis tasks in connection with the surveys. KCOP also faults the survey as being based on audience data from past Nielsen sweeps and not based on any special community specific survey, resulting in the kind of survey rejected in Perry Radio, Inc., 11 FCC Rcd 10564 (CSB 1996). It is also argued that sample data necessary to verify the standard sampling error calculations or to assess the reliability of the sample have not been provided. In this connection KCOP contends that the survey's use of county wide ratings information makes the survey highly speculative for community-specific purposes, and that the use of zip codes as proxies for communities makes the survey unreliable because of the possibility of zip codes including more than one community. KCOP also faults the survey because it departs from the methodology used by an affiliate of KSWB in 1990 to establish Los Angeles station KTLA as being significantly viewed in San Diego County. 6. KCOP urges the Commission to adhere strictly to the established standards for waiver of the exception to the syndicated program exclusivity rules, because those rules draw the line between stations entitled to carriage and those that are not. KCOP argues that a waiver would result in the elimination of KCOP programming that has been an integral part of the San Diego cable system lineups for over 25 years, a result that would not be in the public interest. KCOP points out that Nielsen data from the sweeps periods used in KSWB's survey indicate that KCOP consistently registers a 2% -3% share in the San Diego market across all day parts, and a 28% net weekly circulation. Finally, KCOP notes that cable penetration in this market has reached approximately 82%, making reliance on surveys of noncable households for purposes of determining significantly viewed stations inappropriate. KCOP asserts that since petitioners have failed to establish that KCOP is no less local to the communities involved than it ever was, grant of the waiver requests would not serve the public interest. 7. In reply, KSWB defends its survey by asserting that level of station personnel involvement in survey preparation did not destroy its independent professional character. KSWB states that station personnel merely provided Nielsen with zip codes for purpose of identifying the particular communities served by each of the three cable systems involved, which Nielsen alone utilized in its study. KSWB asserts that while KCOP objects to use of a station employee to determine the proportionality of the survey data used, no inaccuracies in the calculation of the proportionalities have been noted. KSWB contends that reliance on historical audience data is consistent with existing precedent, and that such commercially accepted audience data in this context demonstrates that KCOP failed to achieve the required levels to be considered significantly viewed. KSWB argues also that use of zip codes as proxies for the communities served by the cable systems satisfies the requirement that such surveys be proportionately community specific, that sufficient information is presented to demonstrate that the reported data represented those communities located within the cable system service areas, and that Nielsen had sufficient information to conclude that the data is representative of viewing patterns of noncable households of the geographic areas surveyed. 8. Channel 51 filed comments generally supporting KSWB's request for waiver of the syndicated program exclusivity rules and requesting a waiver of the syndicated program exclusivity rules exemption for station KUSI-TV vis a vis KCOP. Channel 51 subsequently filed a separate petition, now consolidated herein, requesting waiver of the syndicated program exclusivity rules exemption for station KUSI-TV. Channel 51 submitted no audience viewing survey either with its comments or its petition; it relies instead on the survey submitted by KSWB. It contends that if KCOP is no longer significantly viewed in the identified cable communities for purposes of KSWB's program exclusivity rights, then KCOP must be deemed no longer significantly viewed in those same communities for purposes of KUSI's program exclusivity rights. In opposition to Channel 51's petition, KCOP relies on the points and authorities submitted in its opposition to KSWB's petition. DISCUSSION AND ANALYSIS 9. We have carefully reviewed the study submitted by KSWB in light of KCOP's contentions that the study fails to meet Commission requirements for demonstrating significant viewing of a television station in connection with requests for waiver of syndicated program exclusivity rules exemption at issue here. Section 76.54(b) states, in part, that significantly viewed status "may be demonstrated by an independent professional audience survey of non-cable television homes that covers at least two weekly periods separated by at least thirty (30) days ...." Our review reveals that the study was prepared by Nielsen Media Research, which under our rules and precedents qualifies as an independent survey organization. Nielsen prepared three separate special tabulations, for the non-cable homes in each of the three groups of communities served by the three cable systems. KSWB provided Nielsen with the zip codes that correspond to the communities served by each cable system based on information provided by the cable operators. KSWB represented that the cable operators provided this zip code information to KSWB, and the correctness of this information is not challenged by KCOP. We find that procedure does not contravene the intent of the rules to have an independent survey, since the petitioner and affected cable operators simply identified the communities that Nielsen was asked to include in the study. Nielsen utilized the zip codes in the Special Study for its recalculations of audience viewing data from the cable communities during the February 1996, May 1996, February 1997, and May 1997 audience survey periods, or "sweeps," of noncable households. The purpose of this part of the rule is to preclude bias in the preparation and analysis of underlying data that may be introduced in a survey prepared by an affected television station or cable system using in-house personnel. The record does not show that the minimal involvement of KSWB personnel in providing to Nielsen the zip codes for the communities served by the three cable systems and in calculating community sample proportionalities introduced any element of bias into the survey results developed and provided by Nielsen. 10. As noted earlier, the audience data utilized in Nielsen's study is from the February 1996, May 1996, February 1997 and May 1997 four-week sweep periods. The data was tabulated to include only non- cable households from the communities of interest, i.e., those served by the three cable systems. These data sufficiently meet the requirements set forth in KCST-TV that the survey data demonstrate viewing levels in two years and the requirement of Section 76.54(b) that, at a minimum, surveys must provide two weeks of audience measurement in each year. In this case, the surveys include eight weeks of data for each year, which exceeds the minimum and is acceptable for this type of survey. 11. Section 76.54(b) provides that where a cable television system serves more than one community, a single survey may be taken, provided that the sample includes non-cable television homes that are proportional to community populations. The relative proportion of sample diaries for the communities at issue here differs from the relative proportion of community populations both separately for 1996 and 1997 or when averaged over the two years. However, we find the differences not sufficiently significant to result in rejection of this audience showing. The greatest disparity between population distribution and sample distribution is 9.4% in tabulations for the Cox Communications North system, 3.9% in the tabulations for the Cox Communications South system, and 3.1% in tabulations for the Southwestern Cable system. Each of these figures is comparable to or better than disparities accepted by the Commission in other instances. 12. Next we analyze these data to see if petitioners have demonstrated that KCOP failed to meet the standard for significantly viewed status in two consecutive years. In order for KCOP, an independent station, to be declared significantly viewed under Section 76.54(b), it would need to attain a viewing share at least one standard sampling error above a 2 share of total weekly viewing hours and at least one standard error above a 5 net weekly circulation share in non-cable homes pursuant to Section 76.5(i). To demonstrate the converse, the petitioner must show that the reported audience shares are at least one standard sampling error below such requirements. The purpose of applying the standard sampling error to the reported audience statistics is to ensure that there is a high probability that the sample results reflect the actual viewing level and not sampling error. In this case, rather than averaging each year's audience, Nielsen and the petitioner present the data for each of the four-week survey periods separately. For both the February and May 1996 surveys, KCOP's share of total weekly audience is zero as is its net weekly circulation share. Therefore, KCOP was not significantly viewed in these cable communities in 1996. 13. The reported average share of total weekly viewing hours was at best 0.59 for Cox Communications North; 0.03 for Cox Communications South; and 0.61 for Southwestern Cable. The standard errors about these estimates are 0.65, 0.03, and 0.49, respectively. When the standard errors are added to the reported results (0.59+0.65=1.24, 0.03+0.03=0.06, and 0.61+.49=1.10), none of these audiences share values exceeds the 2 criterion specified in the rules. For a station to be significantly viewed both its total share of weekly viewing hours and its net weekly circulation share must exceed the criteria set forth in Section 76.5(i). If one of the two audience statistics does not exceed these criteria by at least one standard error, then the station is not significantly viewed. In this case, the criterion for total weekly viewing hours is not met so the station would not be considered significantly viewed during these measurement periods regardless of KCOP's net weekly circulation share. Accordingly, the petitioner has demonstrated that KCOP no longer satisfies the criteria for significantly viewed status in the non-cable homes served by Cox Communications North, Cox Communications South and Southwestern Cable. 14. To summarize, KCOP failed to achieve the Commission's minimum standard of a 2% share in the communities served by Cox Communications North, Cox Communications South and Southwestern Cable to qualify as significantly viewed in those communities, pursuant to  76.5(i) of the Rules. Because the reported total weekly viewing shares noted above do not reach the required two percent viewing level, we find that KCOP is not significantly viewed in the communities served by Cox Communications North, Cox Communications South and Southwestern Cable. We need not consider the net weekly circulation calculations in this instance. 15. The Commission approved the use of a retabulation of county-wide audience data by zip codes within cable system service areas substantially like that utilized by Nielsen in the instant case, in KCST-TV, Inc., 103 FCC 2nd 407 (1986). Accordingly, KCOP's criticism that the survey improperly relied on data from past Nielsen sweeps and on identification of the communities served by zip codes is rejected. More fundamentally, the specialized survey conducted by Nielsen shows that viewing of KCOP in the communities served by Cox Communications North, Cox Communications South and Southwestern Cable to be significantly less than viewing of the station in San Diego County overall. For that reason, we find that a grant of a waiver of the exemption from the syndicated program exclusivity rules will serve the public interest, because the waiver will allow stations KSWB-TV and KUSI(TV) the benefit of their contracts granting syndicated program exclusivity against like programming of station KCOP-TV on cable systems in communities where KCOP-TV is not significantly viewed. Finally, we reject KCOP's argument that because of cable's high penetration of San Deigo County, a survey of only noncable homes is inappropriate for determining significant viewing in the communities at issue here. The Commission has accepted other survey results based on viewers in noncable home where comparable penetration levels obtain. See Cypress Broadcasting Corp., 11 FCC Rcd 21073 (1996). ORDERING CLAUSES 16. Accordingly, IT IS ORDERED that the petitions of KSWB-TV, Inc. and Channel 51 of San Diego, Inc. in File Nos. CSR 5106-N and CSR-5189-N ARE GRANTED and the provisions of 47 C.F.R.  76.156(a) ARE WAIVED with respect to programming of television broadcast stations KSWB-TV and KUSI(TV) that is subject to syndicated program exclusivity contracts. 17. This action is taken pursuant to authority delegated by 47 C.F.R.  0.321. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau