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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 the Matter of: ) ) Gary Cocola ) CSR 5259-A ) Petition For Modification of Television Market of ) Station KXVO(TV), Omaha, Nebraska ) MEMORANDUM OPINION AND ORDER Adopted: October 6, 1998 Released: October 9, 1998 By the Deputy Chief, Cable Services Bureau: 1. Gary Cocola ("Cocola"), licensee of television station KXVO(TV), Omaha, Nebraska, filed the captioned petition seeking to include the community of Lincoln, Nebraska, within the market of KXVO(TV). An Opposition to the petition was filed by Citadel Communications, L.L.C. ("Citadel"), licensee of television station KLKN-TV, Lincoln, Nebraska, and Cocola filed a reply. 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 Must Carry Order 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 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, the addition of communities 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, the addition of communities would affect which station has priority carriage in the subject communities added. MARKET FACTS AND ARGUMENT 7. Television station KXVO(TV) is licensed to Omaha, Nebraska, located in the Omaha ADI. Cocola requests Commission modification of KXVO(TV)'s market by adding Lincoln, Nebraska, located in the Lincoln-Hastings-Kearney ADI, to the station's television market. In support of this request, Cocola provided information responsive to the four statutory factors considered in market modification cases. This information shows that Lincoln, which is about 35 miles from KXVO(TV), is within KXVO(TV)'s Grade A signal contour. Cocola states that KXVO(TV) is and has been continuously carried on Time-Warner Cable's cable system in Lincoln since immediately after KXVO(TV) commenced operations in June 1995. Cocola also contends that KXVO(TV) airs programming that is directed to the interests of residents of Lincoln, including "News Minute," a sixty-second news insert that reports on events occurring in Lincoln; "Q-Alert" Weather Information, that provides critical weather bulletins and other weather related information affecting residents of Lincoln; "Editorials," which addresses issues of regional or statewide concern to residents of Lincoln. Cocola contends further that KXVO(TV) enjoys significant viewership in Lincoln, as evidenced by Nielsen 1997 County Coverage Studies which show station total audience shares of 3 in Lancaster County (Lincoln's county) cable homes and 7 in Lancaster County non-cable homes for the Sunday-Saturday 7:00 a.m.-1:00 a.m. time period. Cocola also points out that the Commission has found KXVO(TV) to be significantly viewed in Lancaster County and has previously modified the markets of other Omaha television stations KPTM, WOW-TV, and KETV to include Lincoln within those stations' markets. Cocola argues that KXVO(TV) therefore satisfies the four factor statutory test and that Lincoln should be included in KXVO(TV)'s market. 8. Citadel does not dispute that KXVO(TV) is located about 35 miles from Lincoln, that KXVO(TV) provides a Grade A signal over Lincoln, or that KXVO(TV) is carried on the cable system serving Lincoln. Instead, Citadel argues that any credit given for carriage of KXVO(TV) in Lincoln should be discounted because the cable system carrying KXVO(TV) "is owned by Time-Warner, which also owns the television network with which KXVO(TV) is affiliated." Citadel contends that Cocola failed to demonstrate that KXVO(TV) carries any significant amount of programming targeted toward Lincoln, that other stations, including KLKN-TV, serve Lincoln with ample local programming, and that KXVO(TV)'s viewing audience in Lincoln is lower than claimed by Cocola. Citadel contends further that KXVO(TV)'s ratings in Lancaster County are lower in 1998 than they were in 1997 and lower than that of three other Omaha stations. Citadel argues that the Commission, as in other cases, should not include the market core of one ADI in the market of a station from another ADI. DISCUSSION AND ANALYSIS 9. Cocola has provided sufficient evidence to justify its market modification request and, accordingly, it will be granted. Considering the information provided for the record in light of the factors specified in Section 614(h)(1)(C)(ii) of the Communications Act, we are persuaded that the inclusion of Lincoln in KXVO(TV)'s television market will better effectuate Congress' objective of assuring that television stations are carried in the areas which they serve and which form their economic market. Lincoln is in close proximity, about 35 miles, to station KXVO(TV). Additionally, KXVO(TV)'s signal is carried on Time- Warner Cable's cable system serving Lincoln. KXVO(TV) places a Grade A signal over Lincoln, a factor that provides persuasive evidence that the station provides service to that community. We note that three other Omaha stations, KETV (ABC), KMTV (CBS), and WOWT (NBC), place Grade B or better signals over Lincoln, which previously has been included within those other Omaha stations' market through the statutory market modification procedures invoked here. The Commission has also found that KXVO(TV) is significantly viewed in Lincoln, for purposes of the network non-duplication and syndicated program exclusivity rules. 10. Citadel's argument that a grant of Cocola's request to include Lincoln within KXVO(TV)'s market would stand the statutory market modification provision on its head by mandating carriage of the station in the core of the adjacent Lincoln-Hastings-Kearney ADI is not persuasive.. In support of this argument Citadel refers to other cases where the Commission expressed reluctance to alter the basic structure of ADI markets and declined to include the core community of one ADI within the market of a station assigned to another ADI. The core of the community at issue in each of the cases cited by Citadel was located at or near the fringe of the stations' Grade B contour. Here, KXVO(TV) covers the core of the adjacent ADI, Lincoln, with its Grade A signal, thus distinguishing the cited cases from the instant case. Moreover, as noted above, not only is KXVO(TV) currently being carried on the Lincoln cable system, we have previously included Lincoln within the market of three other stations from the adjacent Omaha ADI, based on their satisfaction of the statutory market modification criteria. Having similarly found here, based on the record before us, that KXVO(TV) satisfies those statutory factors, we believe it would be arbitrary and capricious not to include Lincoln within KXVO(TV)'s market. 11. The evidence presented by Citadel suggesting that KXVO(TV)'s viewing audience in Lincoln is lower than claimed by Cocola, or that KXVO(TV)'s ratings in Lancaster County are lower in 1998 than they were in 1997 and lower than that of three other Omaha stations, fails to convince us that KXVO(TV) does not serve the Lincoln market. KXVO(TV) is a relatively new station, having commenced operations in June of 1995. Nonetheless, Cocola has identified on the record programming directed toward the needs and interests of viewers in Lincoln. Although the evidence under these factors may not be persuasive if considered alone, it cannot be ignored when coupled with KXVO(TV) coverage of Lincoln with a Grade A signal and carriage of the station along with other Omaha stations on the cable system serving Lincoln. Accordingly, we grant the petition and include Lincoln, Nebraska in the market of television station KXVO(TV). ORDERING CLAUSES 12. 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 Gary Cocola in File No. CSR-5259-A IS GRANTED, and the television market of television station KXVO(TV) IS MODIFIED to include Lincoln, Nebraska. 13. 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