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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: ) ) Comcast Cablevision of Santa Maria, Inc. ) CSR-5292-A Comcast Cablevision of Lompoc, Inc. ) ) For Modification of the ADI Market of ) Station KADY, Oxnard, California ) MEMORANDUM OPINION AND ORDER Adopted: December 18, 1998 Released: December 22, 1998 By the Deputy Chief, Cable Services Bureau: INTRODUCTION 1. Comcast Cablevision of Santa Maria, Inc. and Comcast Cablevision of Lompoc, Inc. ("Comcast"), filed the above-captioned petition seeking to modify the market of television station KADY (Channel 63), Oxnard, California. Specifically, Comcast requests that the Area of Dominant Influence (ADI) of KADY be modified to exclude the communities located in Santa Barbara County, California served by Comcast's cable systems (the "systems") for purposes of the cable television mandatory broadcast signal carriage rules. Biltmore Broadcasting L. L. C., licensee of KADY ("Biltmore") has filed an opposition to this petition to which Comcast 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, Broadcast Signal Carriage Issues ("Must Carry Order"), a commercial television broadcast station is 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. Under the Act, however, the Commission is also directed to consider changes in market areas. Section 614(h)(1)(C) 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, the Act 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 noncable 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 in 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, 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 demon- strated by program logs or other descriptions of local program offerings. The final factor concerns viewing patterns in the cable community in cable and noncable 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 noncable homes, and significantly viewed surveys typically measure viewing only in noncable households, such surveys may need to be supplemented with additional data concerning viewing in cable homes. 6. As for deletions of communities from a station's market, the legislative history of this provision indicates that: The provisions of [this subsection] reflect a recognition that the Commission may conclude that a community within a station's ADI may be so far removed from the station that it cannot be deemed part of the station's market. It is not the Committee's intention that these provisions be used by cable systems to manipulate their carriage obligations to avoid compliance with the objectives of this section. Further, this section is not intended to permit a cable system to discriminate among several stations licensed to the same community. Unless a cable system can point to particularized evidence that its community is not part of one station's market, it should not be permitted to single out individual stations serving the same area and request that the cable system's community be deleted from the station's television market. 7. 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. The rules further provide, in accordance with the requirements of the Act, that a station not be deleted from carriage during the pendency of an ADI change request. MODIFICATION ARGUMENTS 8. The communities served by Comcast's systems are located in the western portion of Santa Barbara County, California, and are part of the Santa Barbara-Santa Maria-San Luis Obispo ADI. Oxnard, California, KADY's city of license, is also part of the same ADI and is, on average, 69 miles from the cable communities. 9. In support of its modification request, Comcast argues that KADY should be excluded from carriage on its systems because the station does not satisfy any of the four statutory market modification factors. First, the station has a limited record of historic carriage. Comcast states that the station began operation in l985, but has carried by the systems only since the middle of l996 because of the "artificial demands of must carry." Comcast contends that the Commission has rejected such a short period of time as representing historic carriage for modification purposes. In addition, Comcast states that the station has not been carried on its systems since June l998 because of KADY's failure to provide an adequate off-air signal to the systems' headends. Secondly, Comcast maintains that KADY does not provide local coverage for its system due to the following: a) Oxnard, California, KADY's city of license, is 58 miles from the closest cable community, Santa Ynez, and 86 miles from the most distant cable community, Santa Maria; b) KADY's Grade B contour does not cover any of the cable communities; and c) KADY does not carry any programming providing "local coverage" of the system's communities. Third, Comcast asserts that its systems carry "a host of stations," licensed in and around Santa Barbara County, which provide Grade B contour coverage, actual off-air signals, and extensive coverage of local news and sporting events. In addition, Comcast states that the systems carry a "Santa Barbara Community" channel, which provides programming by and for the cable communities local governments. In addition, the systems carry a local origination channel that highlights local news and sports coverage. Finally, Comcast argues that since KADY is unable to deliver a predicted Grade B or actual off-air signal to the cable communities, the station has no significant viewership in the communities. 10. In opposition, Biltmore states that it acquired KADY in July l998, and that the station was previously under the control of a bankruptcy trustee. During this period, the station's technical facilities deteriorated, and it was not able to deliver an acceptable signal to Comcast's headends. Biltmore states that it has taken steps to repair and improve the station's technical capabilities. In addition, Biltmore contends that it has replaced faulty microwave relays and is now capable of delivering a good quality signal to Comcast's headends. Biltmore states that the station has begun broadcasting a 10 o'clock news program focusing on events and issues of interest to viewers in the cable communities and eight daily weathercasts, which include updates on weather conditions in the communities. Biltmore argues that Comcast has exaggerated its contention that the cable systems carry a "host of stations" providing local programming, in that Comcast proposes to carry only three of the five broadcast stations licensed to the local market. Biltmore argues that the Commission should not give weight to Comcast's arguments regarding lack of viewership when analyzing a market modification involving a small independent station. Biltmore concludes that the must-carry provisions were intended to protect a station such as KADY, a small independent station emerging from bankruptcy, and that deletion of cable communities which represent nearly twenty per-cent of the station's market will have a devastating effect on Biltmore's efforts to return the station to economic viability. 11. In reply, Comcast argues that KADY lacks an adequate nexus with the cable communities, and that carriage of the station would constitute an unwarranted commercial windfall to the station, extending its viewership far beyond the area covered by its off-air signal. Comcast contends that it has monitored the station's signal quality after the filing of Biltmore's opposition, and despite Biltmore's assertions to the contrary, KADY is still delivering a "generally unviewable signal" at the cable systems' headends. Comcast states that the station's current level of locally-oriented programming is de minimis, and questions Biltmore's commitment to the communities, in that the programming began airing three weeks after the filing of Comcast's petition. Rather, Comcast argues that the true test of the station's connection to the communities should be based on its past local programming efforts. Comcast contends that KADY does not provide significant local service while other stations carried on the systems do provide extensive local service. Comcast argues that Biltmore cannot state that it provides Grade B coverage to any of the cable communities, or that it is not geographically remote from those communities. Comcast states that KADY's viewership ratings in the cable communities are "almost non-existent" in cable and non-cable households in the western part of Santa Barbara County where the cable communities are located, and concludes that the lack of viewership confirms the absence of any connection between the station and the communities. DISCUSSION 12. Based on our analysis of the evidence relating to the four statutory and other relevant factors, Comcast's petition for market modification is granted. As an initial matter, we note that, according to the legislative history of the 1992 Cable Act, the use of ADI market area is intended "to ensure that television stations be carried in the areas which they service and which form their economic market." The ADI market change process incorporated into the Communications Act, however, is neither intended to be a process whereby cable operators may seek relief from the mandatory signal carriage obligations apart from the question of whether a change in the market area is warranted, nor a vehicle for broadcast stations to reach service areas that otherwise they could not serve. When viewed against this backdrop, and considering all of the relevant factual circumstances in the record, we believe that the operator's exclusion petition appears to be a legitimate request to redraw ADI boundaries to make them harmonious with market realities. Comcast's actions do not reflect an intention to skirt its signal carriage responsibilities under the Communications Act and the Commission's Rules, nor do they evidence a pattern of discriminatory conduct against KADY. 13. We do not believe that Biltmore has satisfied the first statutory factor, as KADY has only a brief history of carriage on Comcast's systems, and the station has been carried under the mandates of the Act and the Commission's mandatory carriage rules. The Commission has held that such carriage does not rise to the level of historic carriage in analyzing a cable operator's market modification petition. 14. With respect to the second statutory factor regarding local programming service, we have held that the presence of a Grade B contour over a community is evidence generally sufficient to satisfy this factor. In this case, however, KADY does not place either a Grade A or Grade B contour over the cable communities. Biltmore has provided no specific information pertaining to its application to upgrade KADY's effective radiated power. With respect to programming service, KADY has shown only that it recently began broadcasting a minimal amount of programming of specific local interest or import for cable viewers in the communities in question. Therefore, we conclude that KADY does not meet this statutory factor. 15. We also believe that Comcast's carriage of other local television stations provides support for the action requested. Where a cable operator is seeking to delete a station's mandatory carriage rights in certain communities, the issue of local coverage by other stations becomes a factor to which we will give greater weight than in cases where a party is seeking to add communities. In this case, we find the stations carried by Comcast to have a closer nexus to the cable systems herein than does KADY. These market facts, coupled with the distance between the cable systems and KADY, support Comcast's arguments under the third statutory factor. 16. With regard to viewership, it appears that KADY has a negligible level of viewership in the cable communities. Biltmore has presented no evidence to the contrary. Accordingly, this factor supports Comcast's request for modification of its market. 17. We also note that as of January 1, 2000, KADY will be designated as part of the Los Angeles Designated Market Area (DMA), and will accordingly have must-carry rights in that market and not in its current ADI. In determining that Nielsen DMAs, rather than the Arbitron ADIs, will define future markets for must-carry purposes and market modification requests, in Definition of Markets for Purposes of the Cable Television Mandatory Television Signal Carriage Rules, the Commission stated: For the time-being, the Commission will rely on market modifications determined pursuant to Section 614(h) to refine market boundaries to account for changes in viewing patterns and market conditions. In this regard, we recognize that DMA market designations are one way to determine local stations and are mindful that information regarding DMAs could be useful in deciding individual cases. We believe that KADY's future designation in the Los Angeles DMA is of probative rather than dispositive value in the instant matter. It does, however, weigh in favor of Comcast's request for modification, particularly where the station is not currently being carried. A contrary decision would most probably alter Comcast's carriage requirements only for the current ADI designation, thereby creating unnecessary burdens for the cable operator and confusion for subscribers. 18. Given the evidence as to the statutory factors and KADY's DMA designation in the Los Angeles market, we conclude that it is logical and consistent with the objective of Section 614 of the Communications Act to delete Comcast's systems from KADY's market for mandatory carriage purposes. ORDERING CLAUSES 19. Accordingly, IT IS ORDERED, pursuant to 614(h) of the Communications Act of 1934, as amended, 47 U.S.C. 534, and 76.59 of the Commission's Rules, 47 C.F.R. 76.59, that the petition for special relief (CSR-5292-A) filed on behalf of Comcast Cablevision of Santa Maria, Inc. and Comcast Cablevision of Lompoc, Inc. IS GRANTED. 20. 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