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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 Communications Corporation ) ) For Modification of Television Market of ) CSR 5253-A Station WPXD(TV), Ann Arbor, Michigan ) MEMORANDUM OPINION AND ORDER Adopted: September 10, 1998 Released: September 16, 1998 By the Deputy Chief, Cable Services Bureau: 1. Paxson Communications Corporation ("Paxson") filed the captioned petition which seeks to include within the market of television station WPXD(TV), Ann Arbor, Michigan, certain communities located in the counties of Livingston, Monroe, Oakland, Wayne, Macomb and Genesee, Michigan (the "Communities"). Oppositions to the petition were filed separately by Fox Television Stations, Inc., licensee of television station WJBK-TV, Detroit, Michigan; Granite Broadcasting Corporation; Sunrise Broadcasting Corporation, licensee of television station WEYI-TV, Saginaw, Michigan; Ameritech New Media, Inc., operator of cable systems in unspecified communities in Livingston, Monroe, Oakland, Wayne, Macomb and Genesee Counties; and jointly by Comcast Cablevision of Flint, Inc., Comcast Cablevision of Taylor, Inc., Comcast Cable Investors, L.P., Comcast Cablevision of Grosse Pointe, Inc., Comcast Cablevision of Detroit, Inc., Comcast Cablevision Sterling Heights, Inc., and Comcast Cablevision of Clinton, Inc. (collectively "Comcast"); and jointly by Westmarc Development Joint Venture, Tribune-United Cable of Oakland County, Independence Cable TV Co., Community Cable Television, and United Cable T.V. of Oakland, and United Cable Television Corp. (collectively "Cable Operators"). The cities of Ferndale and Wyandotte, Michigan filed statements in opposition to the petition. Paxson filed a consolidated reply to the oppositions. 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 In the Matter of Implementation of the Cable Television Consumer Protection and Competition Act of 1992 (Report and Order in MM Docket 92-259) ("Must Carry Order"), 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. 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 WPXD(TV) is licensed to Ann Arbor, Michigan, located in the Detroit, Michigan, ADI. The station, however, is assigned by Arbitron's 1991-1992 Television Market Guide to the Lansing, Michigan ADI. Paxson requests Commission modification of television station WPXD(TV)'s market by adding the Communities listed on Exhibit 1 of its petition to its local market. The Communities are located in Livingston, Monroe, Oakland, Wayne, and Macomb Counties within the Detroit ADI, and Genesee County within the Flint-Saginaw-Bay City, Michigan, ADI. Paxson contends that WPXD(TV) provides local service to these Communities. In support of this request, Paxson contends that all of the Communities are located within, or on the fringe of WPXD(TV)'s Grade B signal contour. For these purposes, Paxson provided a WPXD(TV) Grade B coverage analysis utilizing the so called "Longley-Rice" propagation model, also known as the "ITS Irregular Terrain Model." Paxson argues that this Grade B coverage analysis establishes that WPXD(TV) provides sufficient local service and programming designed to serve the needs of the Communities to justify adding those Communities to WPXD(TV)'s market. 8. Those opposing this request assert that Paxson failed to establish any history of cable system carriage of WPXD(TV) in the Communities, failed to provide evidence of WPXD(TV) viewership in the Communities, and failed to establish that WPXD(TV) provides any programming designed specifically for the local needs and interests of the Communities. Paxson opponents also contend that other television stations provide local service to the Communities. The opponents object to Paxson's reliance on a Longley-Rice Grade B coverage analysis. They contend not only that an unverified and unreadable Longley-Rice coverage map was submitted with the petition but also that Paxson failed to submit a standard station coverage map meeting the requirements of 47 C.F.R.  73.684(f) normally relied upon in analyzing the statutory coverage factor. 9. In reply, Paxson reasserts its contention that the Longley-Rice analysis established that all of the Communities are shown to be located within, or on the fringe of WPXD(TV)'s Grade B signal contour. With its reply, Paxson presented two new Grade B coverage maps utilizing Longley-Rice analysis for WPXD(TV), one based on the station's currently licensed facilities and the other based on station facilities as proposed in a pending application for modification of facilities. Paxson also provided with its reply affidavits of the persons that prepared the Longley Rice analyses on which the coverage maps are based. Paxson restates its position that these Longley Rice analyses of WPXD(TV)'s Grade B coverage of the Communities are sufficient to establish that WPXD(TV) provides local service and programming designed to serve the needs and interests of the Communities. Paxson argues that the Commission in other market modification cases has added communities to a station's market based solely on evidence that the communities were within or on the fringe of the station's Grade B contour. 10. Paxson asserts further that, in addition to Grade B coverage of the Communities, WPXD(TV) has a history of carriage on cable systems in the City of Detroit as well as in other communities located immediately adjacent to the cable Communities at issue here. Paxson notes that the Commission in other cases has held that cable carriage of a station in adjacent communities provides compelling evidence of a nexus between the station and those communities. Paxson also points out that WPXD(TV) is assigned by Nielsen Media Research to the Detroit DMA, and notes that the Commission has invited petitioners to include information regarding a station's DMA assignment in market modification petitions, information which has been found useful in the market modification process. Paxson contends therefore that it has presented a case in which the facts are significantly stronger in favor of the requested market modification than obtained in other cases where market modifications were granted based largely on community Grade B coverage. DISCUSSION AND ANALYSIS 11. Paxson has essentially conceded that WPXD(TV) has no history of carriage and little if any viewership in the Communities it seeks to add to the station's market. The record, however, shows carriage of WPXD(TV) in 13 other communities located in Wayne County, 26 communities in Oakland County, 6 communities in Livingston County, and 4 communities in Monroe County Many of the Communities covered by Paxson's market modification request are also located in Wayne, Oakland, Livingston and Monroe Counties. WPXD(TV) has been carried since 1986 in the City of Detroit, which is the core of the Detroit ADI and adjacent to several of the Communities covered by Paxson's market modification request. We believe this pattern of carriage of WPXD(TV) in the City of Detroit and in communities adjacent to and near the Communities at issue is indicative of interest in the programming of WPXD(TV) throughout this four county area and provides substantial evidence of a market nexus between this Ann Arbor station and within the four county area of Wayne, Oakland, Livingston and Monroe Counties. This market nexus is further confirmed by the assignment of WPXD(TV) to the Nielsen-defined DMA. 12. In Blackstar of Ann Arbor, Inc., the Bureau found that WPXD(TV), formerly WBSX(TV), provided City Grade, Grade A, or Grade B coverage to 49 communities located in Wayne, Oakland, Livingston and Monroe Counties, and noted that WPXD(TV) had been carried in those communities since 1993. Largely based on that record, we found in Blackstar that the 49 communities should be added to the station's market. We find that WPXD(TV)'s widespread carriage in the 49 communities located in Wayne, Oakland, Livingston and Monroe Counties, and our earlier decision in Blackstar to include those communities within WPXD(TV)'s market, together with the assignment of WPXD(TV) to the Detroit DMA, sufficiently establishes that the Communities within Wayne, Oakland, Livingston and Monroe Counties at issue in this proceeding should also be included in WPXD(TV)'s market for must carry purposes. 13. Paxson established no history of cable carriage nor any evidence of WPXD(TV) viewership in either Genesee or Macomb Counties. Macomb County lies clearly beyond WPXD(TV)'s Grade B coverage. There is also no record of WPXD(TV) viewership in either of these counties or of any WPXD(TV) programming specifically designed for communities in those counties. On this record, we believe the nexus provided by history of carriage is absent in Genesee or Macomb Counties, a factor that distinguishes communities in these two counties from communities in the four counties discussed in Blackstar. Because of the absence of local programming or viewership as well as the absence of a history of carriage, we will not add the communities in Genesee and Macomb Counties to WPXD(TV)'s market. SUMMARY 14. Pursuant to the provisions of Section 614(h)(1)(C), we modify the television market of WPXD(TV) to include the Communities listed in Exhibit 1 to Paxson's petition as part of the market of Station WPXD(TV), with the exception of the communities located in Genesee and Macomb Counties. The history of widespread carriage of WPXD(TV) in the City of Detroit and in many communities in Wayne, Oakland, Livingston and Monroe Counties, where the Communities at issue are also located, as well as the station's assignment to the Detroit DMA persuades us that the relief requested in this instance should be granted in part. The Commission has concluded that Nielsen Media Research's DMA market assignments provide an 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 WPXD(TV) and the Communities at issue in the Detroit DMA confirms our conclusion that the identified communities in Wayne, Oakland, Livingston and Monroe Counties should be considered part of WPXD(TV)'s market. The coverage of the Communities in these four counties by WPXD(TV)'s signal, as shown by the Longley-Rice analyses submitted by Paxson, supports our conclusion that there is a market nexus between WPXD(TV) and the Communities in those four counties. ORDERING CLAUSES 15. 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 Communications Corporation in File No. CSR-5253-A IS GRANTED, and the television market of television station WPXD(TV) IS MODIFIED to include the Michigan communities of listed in Exhibit 1 of Paxson's Petition for Special Relief filed in this proceeding on June 2, 1998, with the exception of the communities located in Genesee and Macomb Counties which are not included. 16. This action is taken pursuant to authority delegated by Section 0.321 of the Commission's Rules. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau