******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. 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: ) ) Jasas Corporation ) CSR-5353-A ) For Modification of the Washington,) D.C. ADI Market ) MEMORANDUM OPINION AND ORDER Adopted: April 29, 1999 Released: April 30, 1999 By the Deputy Chief, Cable Services Bureau: I. INTRODUCTION 1. Jasas Corporation, licensee of Station WBDC-TV (Ind., Ch. 50), Washington, D.C., has filed the above-captioned petition, which seeks to include the communities of Hagerstown, Williamsport, Boonsboro, Smithsburg, Funkstown, Clear Spring and unincorporated Washington County, Maryland, No opposition to this petition has been received. II. BACKGROUND 2. Pursuant to 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 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 demonstrated 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. In adopting rules to implement this provision, the Commission indicated that requested changes 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. III. THE PLEADINGS 7. WBDC-TV is located within the Washington, D.C. ADI. Washington County, Maryland, where the communities are located, is considered to be within the Hagerstown, Maryland ADI. 8. In support of its request, WBDC-TV states that in the process of upgrading its programming and facilities, it has begun to enforce its cable carriage rights throughout the Washington, D.C. market in an effort to have its cable coverage area equivalent to that of the other DC stations with which it competes. WBDC-TV points out that Hagerstown, Maryland is the only major community in which it is not carried although the system carries numerous other DC network affiliates. WBDC-TV states that, after extensive negotiations with the cable operator, the only barrier to carriage is the significant copyright liability that the cable system would incur. WBDC-TV argues that the inclusion of Hagerstown would eliminate such copyright liability and the resulting carriage would provide the cable system subscribers with access to the WB Television Network, something which is currently not available to them. 9. WBDC-TV argues that while the Commission currently relies on Arbitron's ADI listing to delineate local commercial markets, it has recognized the value and importance of Nielsen's DMAs as the most current definitions of commercial markets and has chosen to rely on DMAs starting in the next must carry election period. WBDC-TV states that Hagerstown is currently considered by Nielsen to be part of the Washington, D.C. DMA. WBDC-TV points out that in previous modification cases the Bureau has taken into account current Nielsen DMA information in adding communities to a station's market. 10. WBDC-TV maintains that adding Hagerstown to its market would allow it to serve an important segment of its natural economic market consistent with the intent of Section 614(h)(1)(C). WBDC- TV indicates that Hagerstown is geographically contiguous with the Washington, D.C. market and there are no intervening disruptive geographic features such as rivers or mountains. Moreover, WBDC-TV states, the sole Hagerstown ADI county is largely surrounded by the existing Washington, D.C. market and two major interstate highways directly connect Washington, D.C. and Hagerstown. In addition, WBDC-TV states that Hagerstown is included in the U.S. Census Bureau's Washington-Baltimore Consolidated Metropolitan Statistical Area ("CMSA") and areas consolidated into one CMSA are those "considered as a single unit for statistical purposes due to their economic and social integration. . . ." WBDC-TV argues that the Bureau has previously recognized that the presence of a community in the same MSA as a station's city of license is evidence that the community is in that station's market area. 11. With regard to the four market criteria, WBDC-TV argues that while it has not previously been carried on the Hagerstown cable system, many other Washington, D.C. stations have been carried for years. Accordingly, WBDC-TV states that it is entitled to credit under this criterion. Second, WBDC-TV states that although its Grade B contour does not quite cover Hagerstown, it should be noted that the geographic distance of 74 miles between the cable communities and the station's city of license is well within the range of distances previously approved by the Bureau. Third, while WBDC-TV does not contest the fact that stations licensed to Hagerstown provide some local programming of interest to the Hagerstown community, it maintains that the cable system currently carries no affiliate of the WB Network and this fact entitles it to credit under the third criterion. Finally, WBDC-TV admits that it does not have significant viewership in Washington County, but maintains that it would be illogical to deny its petition based on that fact. IV. DISCUSSION 12. We grant WBDC-TV's petition. The cable television mandatory broadcast signal carriage rules were adopted as part of the 1992 Cable Act. According to the legislative history of that Act, the use of ADI market areas is intended "to ensure that television stations be carried in the areas which they serve and which form their economic market." The Act specifically provided that the Commission was to consider adding additional communities or excluding communities from the markets of television stations "to better effectuate the purposes" of the mandatory carriage requirements. These factors, however, were "not intended to be exclusive." In acting on such requests, the Commission was instructed to "afford particular attention to the value of localism, taking into account four specified statutory factors." We believe that the addition of the communities herein to WBDC-TV's television market will better effectuate the purposes of the must carry statutory provisions. 13. In an analysis of the four statutory factors for market modification we find that WBDC-TV meets the historic carriage factor because other stations licensed to Washington, D.C., and with which WBDC- TV competes, have been historically carried on the Hagerstown system. With regard to the other modification factors, we note that the subject communities are not encompassed by WBDC-TV's predicted Grade B contour and WBDC-TV has minimal viewership in Washington County. However, other factors override these deficiencies. WBDC-TV is carried on cable systems surrounding the Hagerstown system, including communities more distant from Washington, D,C., and numerous other "stations located in the same area" as WBDC-TV are being carried on the system. This evidence demonstrates that Hagerstown cable subscribers have a commonality of interest with the Washington, D.C. area and provides evidence of the scope of WBDC- TV's market. WBDC-TV appears to be one of the "hub" stations in the market with its programming and advertising being of widespread interest across the area. V. ORDERING CLAUSES 14. Accordingly, IT IS ORDERED, pursuant to Section 614(h) of the Communications Act of 1934, as amended, and Section 76.59 of the Commission's rules that the petition for special relief filed on behalf of Jasas Corporation IS GRANTED. 15. 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