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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: ) ) Complaint of Shop at Home, Inc. ) CSR-5257-M against Armstrong Utilities, Inc. ) ) Request for Carriage ) MEMORANDUM OPINION AND ORDER Adopted: October 30, 1998 Released: November 4, 1998 By the Acting Chief, Consumer Protection & Competition Division, Cable Services Bureau: INTRODUCTION 1. Shop at Home, Inc., licensee of Station WOAC-TV (Ind., Ch. 67), Canton, Ohio, has filed a must carry complaint against Armstrong Utilities, Inc., for that cable operator's failure to carry WOAC-TV on its system serving Ashland, Blooming Grove, Butler, Hayesville, Mifflin, Milton, Montgomery, Orange, Sullivan, Troy and Weller, Ohio. An opposition was filed on behalf of Armstrong to which WOAC-TV has replied. BACKGROUND 2. Pursuant to Section 614 of the Communications Act and implementing rules adopted by the Commission in its Implementation of the Cable Television Consumer Protection and Competition Act of 1992 ("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 Arbitron audience research organization. SUMMARY OF ARGUMENTS 3. In support of its request, WOAC-TV states that by letter dated March 27, 1998, it informed Armstrong that it was a qualified local signal, that it had elected must carry status in October 1996, and that it now requested carriage on Amstrong's Ashland, Ohio cable system. In its April 16, 1998 response, WOAC-TV states that Armstrong refused carriage based on signal tests which it maintained showed that WOAC-TV did not meet the Commission's signal strength criteria and invited WOAC-TV technicians to visit the cable system headend to verify the measurements. WOAC-TV indicates that on May 11, 1998, its consulting engineer wrote to accept Armstrong's offer and requested authorization to install specialized equipment at the headend. On May 26, 1998, WOAC-TV states that Armstrong rejected the request for carriage, maintaining that a September 27, 1996 letter from WOAC-TV's previous licensee constituted a request for carriage. Armstrong asserted that since it rejected that request on November 5, 1996 and WOAC-TV's previous licensee did not file a complaint within the required 60 days, WOAC-TV's current licensee was now barred from doing so. WOAC-TV points out that not only has Armstrong rejected its request for carriage, but it has indicated that it will not cooperate with any efforts to test and install equipment for delivery of a good quality signal at the cable system's headend. WOAC-TV argues that Armstrong's reliance on the September 24, 1996 letter in its final refusal has no basis as that letter was merely a must carry election notification which satisfied the requirements of 76.64 and 76.57 of the Commission's rules. Therefore, WOAC-TV maintains, Armstrong's November 5, 1996 response could not trigger the 60-day filing requirements of 76.7 of the rules, and the current complaint is timely filed. WOAC-TV states that it is clear that Armstrong has failed to comply with its statutory obligations under the 1992 Cable Act in failing to cooperate with WOAC-TV's efforts to improve its signal. WOAC-TV requests that the Commission order Armstrong to cooperate and to commence carriage of its signal on channel 67 at such time as the station delivers a good quality signal. 4. In opposition, Armstrong argues that WOAC-TV is time barred from requesting carriage due to the actions of its former licensee and therefore has no legal right to install receiving and amplifying equipment at Armstrong's headend. Armstrong points out that WOAC-TV's former licensee, Whitehead Media, Inc., sent a letter to the system on September 27, 1996, requesting carriage pursuant to the must carry rules. Armstrong states that it denied this request on November 5, 1996 because, based on signal quality tests conducted on October 8 and 9, 1996, the station failed to meet the Commission's signal strength criteria. Over two years later, on March 27, 1998, Armstrong states that it received a letter from Shop at Home, Inc., the station's current licensee, indicating that it intended to "pursue the must carry election notice sent to your system in October, 1996." Armstrong points out that in response it informed WOAC-TV that not only had its original request for carriage been denied in November 1996, but that current signal strength tests concluded that there was no improvement in the station's signal quality. Subsequently, when WOAC-TV's consultant informed the system of its plans to conduct its own measurements after installing receiving equipment at the system headend, Armstrong explained to WOAC- TV that because it was denied carriage in 1996 and did not pursue its must carry rights by filing a complaint within sixty days of Armstrong's denial of carriage, it was barred from pursuing those rights now. Armstrong states that in spite of this, WOAC-TV filed the instant complaint, maintaining that its September 27, 1996 letter was "merely a must-carry election notification letter" and not a request for carriage. 5. Armstrong argues that WOAC-TV is attempting to retroactively change the straight-forward meaning of its September 27th letter, but it ignores the plain language of that letter. Armstrong points out that twice in that letter WOAC-TV specifically stated that it was requesting carriage: a) paragraph two -- "For the purposes of this election, [WOAC-TV] requests carriage on a mutually agreeable channel. . . "; and b) last paragraph -- "If you should have any problems receiving our signal or if you have any objections to this mandatory carriage request, please contact the undersigned. . . (emphasis supplied)." Armstrong contends that characterizing the September 27th letter as a carriage request is consistent with previous Bureau decisions. Moreover, Armstrong points out that in a case involving WHCT-TV, the Bureau held that language almost identical to that in WOAC-TV's letter constituted a demand for carriage. On the other hand, Armstrong states that in Paxson Denver License, Inc., the Bureau held that the station's letter was an election notification because it referred to "elect[ing] mandatory carriage" and, more importantly, the cable operator treated it as an election notice. Clearly, Armstrong argues, the deciding factor is whether the cable operator's response puts the station on notice of its rights under must-carry. In this instance, Armstrong states that it viewed WOAC-TV's September 27th letter as a clear carriage request and the subsequent November 5, 1996 refusal of carriage triggered the 60-day period in which WOAC-TV could file a must carry complaint. Armstrong concludes that since the Commission adopted a 60-day filing limit to balance the interests of both stations and cable operators, public interest necessitates dismissal of WOAC-TV's complaint. 6. In reply, WOAC-TV argues that the objections raised in Armstrong's opposition are baseless. WOAC-TV points out that 76.64 of the Commission's Rules sets forth the procedure for local broadcast stations to notify cable operators of their election between must carry and retransmission consent status. At the same time they make such election, WOAC-TV states, 76.57(d) of the rules requires stations "to notify the cable system of its choice of channel position." WOAC-TV states that the September 27, 1996 letter it sent to Armstrong conformed to these requirements. WOAC-TV indicates that in several previous decisions the Bureau found that letters virtually identical to the September 27th letter were election notification letters and not disputes concerning carriage which triggered the complaint process. In any event, WOAC-TV argues that any reasonable reading of the September 27th letter plainly shows that it was designed only as an election notification: a) the letter was sent on the eve of the must carry election deadline; b) the first sentence expressly states that it was sent pursuant to 76.64(f) and that WOAC-TV "elects mandatory carriage"; and c) the letter indicates that "for the purposes of this election" requests carriage on a mutually agreeable channel as required by 76.57(d) of the rules. Moreover, WOAC-TV maintains that fact that the words "carriage request" were used in the letter should be given no credence. WOAC-TV argues that it is entirely appropriate for a station to "request" carriage in conjunction with a must carry election notification since once a station makes such election it is entitled to mandatory carriage by law without any further action on its part. Indeed, the Bureau has previously determined that the incidental use of the phrase "carriage request" does not transform an election letter into something else. In Paxson Denver License, Inc., WOAC-TV points out that the Bureau found that "any ambiguity concerning the effects of these letters that may arise from the last sentence [where the phrase "mandatory carriage request" appears] is removed by the specific statement in the letters that the station 'elects mandatory carriage' and by the specific reference to Section 76.64(f) also contained in these letters." WOAC-TV argues that because its September 27th letter is virtually identical to the Paxson letters, the Bureau should conclude that it did not trigger the must carry complaint timing mechanism. 7. In addition, WOAC-TV maintains that Armstrong's reliance on the fact that because they viewed the September 27th letter as a "carriage request" the system's November 5th denial of carriage triggered the 60-day filing period is misplaced. WOAC-TV states that the Commission has explained that ". . . the time period for filing a complaint would expire 60 days after the date the cable operator's denial of a demand is received by the broadcaster or the date such response is due." WOAC-TV argues that it is evident, therefore, that a cable operator may not trigger the must carry complaint process in the absence of a broadcaster's notice pursuant to 76.61 of the Commission's rules. WOAC-TV concludes that, since it has committed to install the equipment necessary to ensure a good quality signal at Armstrong's headend, the Bureau should order the system to carry its signal. DISCUSSION 8. There appear to be two points of contention in the case before us. The first is whether WOAC- TV's September 27, 1996, letter constituted a request for carriage and the second is Armstrong's refusal to allow WOAC-TV to install equipment at the system's headend to improve the quality of its signal. It is Armstrong's opinion that WOAC-TV's September 27th letter was a demand for carriage and the system's subsequent refusal of carriage triggered the 60-day limit in which WOAC-TV could file a must carry complaint, thus invalidating the station's subsequent March 27, 1998 demand for carriage and justifying the system's refusal to allow WOAC-TV to install equipment. WOAC-TV disputes this. 9. In adopting the must carry regulations, the Commission's Must Carry Order set forth a two-step notification process. Section 76.64(f) of the Commission's rules requires all commercial television stations to choose between retransmission consent and must carry status at specific election periods. The relevant election period in this instance was to be made by October 1, 1996 and was effective January 1, 1997. At the same time as it makes its election choice, 76.64(l) of the rules requires that the station also indicate its channel position. Section 76.61(a)(1) of the rules mandates that local commercial television stations notify cable operators in writing when such cable operators fail to meet their carriage or channel positioning obligations. In the Must Carry Order, it was stated that "[T]his initial notification will act as a condition precedent to a commercial or LPTV station filing a complaint with the Commission, as well as serve as a primary part of the pleadings in the event a complaint is filed." Cable operators are required to respond to such written notice within thirty days, pursuant to 76.61(a)(2), and any commercial stations denied carriage may then file a must carry complaint with the Commission within sixty days thereafter (76.61(a)(3)). 10. In the instant case, despite Armstrong's arguments to the contrary, it is evident that WOAC-TV's September 27, 1996 letter was an election notification as required by our rules and not a must carry request under 76.61(a)(1) which triggers the must carry complaint filing deadline. The letter specifically states that it is pursuant to the provisions established under 76.64(f) of the Rules and it was mailed just prior to the October 1, 1996 deadline mandated for the second election period. Moreover, the request in the last sentence of the notification of any objections to this mandatory carriage request does not justify construing such letters as must carry requests. The fact that the letter states in the first paragraph that it "elects mandatory carriage," and the specific reference to 76.64(f) should overcome any ambiguity as to the letter's actual intent. As a result, we find that WOAC-TV's March 27, 1998 letter to be a valid carriage request and the station's subsequent must carry complaint to be timely filed. 11. A staff review of the signal quality tests conducted by Armstrong at its Ashland system headend on October 8 and 9, 1996, indicates that these tests were conducted in accordance with accepted Commission standards and they demonstrate that WOAC-TV does not provide a signal of sufficient strength to meet the Commission's signal quality criteria for UHF stations of -45 dBm. However, we note that WOAC-TV has not been given the opportunity to install the equipment, at its expense, which it feels necessary to ensure the delivery of a good quality signal to Armstrong's system. The Commission has stated that specialized equipment may be employed to deliver a good quality signal to a cable system headend. The Commission, in the Implementation of the Cable Television Consumer Protection and Competition Act of 1992, Broadcast Signal Carriage Issues ("Must Carry Clarification Order"), after re- emphasizing that it was the television station's obligation to bear the costs associated with delivering a good quality signal to the system's principal headend, stated: This may include improved antennas, increased tower height, microwave relay equipment, amplification equipment and tests that may be needed to determine whether the station's signal complies with the signal strength requirements . . . WOAC-TV, by committing to provide specialized equipment, satisfies its obligation to bear the costs associated with delivering a good signal to Armstrong's headend. Consequently, we order Armstrong to carry WOAC-TV when its supplies a good quality signal. ORDERING CLAUSES 12. Accordingly, IT IS ORDERED, that the petition filed by Shop at Home, Inc. IS GRANTED pursuant to 614 of the Communications Act of 1934, as amended (47 U.S.C. 534). Armstrong Utilities, Inc. IS ORDERED to commence carriage of Station WOAC-TV on its cable system serving Ashland, Blooming Grove, Butler, Hayesville, Mifflin, Milton, Montgomery, Orange, Sullivan, Troy and Weller, Ohio, sixty (60) days from the date that WOAC-TV provides a good quality signal at Armstrong's principal headend. 13. IT IS FURTHER ORDERED, that WOAC-TV shall notify Armstrong in writing of its channel position election (76.57 of the Commission's Rules) within fifteen (15) days of providing a good quality signal. 14. This action is taken pursuant to authority delegated by 0.321 of the Commission's Rules. FEDERAL COMMUNICATIONS COMMISSION Deborah Klein, Acting Chief Consumer Protection and Competition Division Cable Services Bureau