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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: ) ) Complaint of Paxson Los Angeles License, Inc.) against West Valley Cablevision Industries, Inc.,) CSR-5337-M d/b/a Time Warner Communications) ) Channel Positioning Complaint ) MEMORANDUM OPINION AND ORDER Adopted: May 4, 1999 Released: May 5, 1999 By the Chief, Consumer Protection and Competition Division, Cable Services Bureau: INTRODUCTION 1. Paxson Los Angeles License, Inc. ("Paxson"), licensee of commercial television station KPXN(TV) (Channel 30), San Bernardino, California ("KPXN") filed a must carry complaint with the Commission, pursuant to Sections 76.7 and 76.61 of the Commission's rules, asking that the Commission require West Valley Cablevision Industries, Inc. d/b/a Time Warner Communications ("Time Warner") to carry Station KPXN ("the Station") on a uniform cable channel position throughout its cable system serving the area of Chatsworth, California. Time Warner filed an opposition to the petition to which KPXN filed a reply. 2. In an earlier proceeding, West Valley Cablevision Industries, Inc. ("CVI"), filed a petition for special relief seeking the exclusion of KZKI from its television market, and a release from its mandatory obligation to carry the Station. CVI's petition was denied, and CVI was ordered to commence carriage of the KZKI sixty (60) days after the release of the Commission's Order. KZKI was ordered to notify CVI in writing of its carriage and channel position elections within thirty (30) days of the release of the Order. BACKGROUND 3. Pursuant to Section 614 of the Communications Act and implementing rules adopted by the Commission in Implementation of the Cable Television Consumer Protection and Competition Act of 1992, Broadcast Signal Carriage Issues Report and Order ("Must Carry Order"), commercial television broadcast stations are entitled to assert mandatory carriage rights on cable systems located within a 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 exclusively of others, based on measured viewing patterns. 4. With respect to the channel number on which stations asserting must carry rights are to be carried, Section 614 of the Act and Section 76.57 of the Commission's rules provide commercial television stations with three possible options. The station may elect to be carried on: (1) the channel number on which the station is broadcast over the air; (2) the channel number on which the station was carried on July 19, 1985; or (3) the channel number on which the station was carried on January 1, 1992. The Act and the rules also provide that a broadcast station may be carried on any other channel number mutually agreed upon by the station and the cable operator. ARGUMENTS OF THE PARTIES 5. In support of it petition, KPXN asserts that it was originally carried on Time Warner's system on cable channel 16, "an agreed upon channel position." KPXN maintains that sometime towards the end of 1997, Time Warner, without giving Petitioner proper notice, began to carry KPXN on two different cable channels: channel 39 in areas where the upgrade of its system had been completed, and channel 16 on the rest of the system. KPXN states that Time Warner's actions have caused confusion among its viewers in the cable communities in question. KPXN indicates that because it disagreed with Time Warner's unilateral decision to cablecast KPXN on two different channels, it requested that the Station be carried on a single uniform channel (Channel 16) throughout the Chatsworth system. KPXN maintains that even if it never specifically requested carriage on Channel 16, as Time Warner suggests, the Station is entitled to be carried on that channel 16 because the channel was "acceptable to KPXN, and the station is entitled to continued carriage on this channel in a manner consistent with the Commission's must-carry rules." 6. KPXN asserts that the instant complaint was filed in a timely fashion, and contends that the events triggering the statutory deadlines for filing a channel positioning complaint started on October 1, 1998, when Paxson formally requested to be positioned on channel 16. KPXN maintains that the specific event triggering the sixty (60) day period in which to file the instant complaint was the Time Warner letter of October 28, 1998, denying KPXN's uniform channel positioning request. 7. In opposition, Time Warner argues that KPXN's complaint should be dismissed because it was untimely filed. In support, Time Warner states that in October 1997, shortly after the Commission ordered it to carry KPXN's signal, its Chatsworth system began to carry the Station on dual channels on the Basic Reception Service--channels 16 and 39--and that the system's subscribers were notified accordingly. In a letter dated October 28, 1998, Time Warner notes that KPXN had not been switched or moved from channel 16 to channel 39. Rather, Time Warner points out, the Station had been carried on dual-channels "since the launch of our upgraded cable system" in October 1997. Time Warner notes further that the dual-channel arrangement has continued to the present, and points out that it was not until October 1998, about a year after such arrangement began, that KPXN complained about an arrangement it had tacitly accepted. Thus, Time Warner argues, KPXN's December 1998 Complaint was filed a year too late. Time Warner maintains that KPXN's complaint should be barred by laches because even though KPXN was aware of the dual-channel situation from the beginning, it failed to raise the issue or object to the arrangement until a year later. Time Warner also argues that KPXN's tacit acquiescence of the dual channel situation, along with Time Warner's reliance on such channel positioning arrangement while upgrading it system, undermines KPXN's assertion that its complaint was timely in accordance with the Commission's rules. 8. In reply, KPXN reiterates its argument that Time Warner's Chatsworth system has failed to carry the Station's signal on a single, uniform channel as required by the Commission's must carry rules, and maintains that Time Warner's response only confirms that fact. KPXN asserts that Time Warner's laches argument lacks merit because there is nothing equitable barring the Station from filing the instant complaint. KPXN maintains that the laches argument "directly undermines the clear, well-established rules governing the timing of must-carry complaints established by the Commission." KPXN affirms that Time Warner has resorted to the laches argument because it cannot contest that the Station's complaint was filed on a timely fashion. In that regard, KPXN disagrees with Time Warner's conclusion that KPXN "was obliged to take prompt action to pursue its channel positioning rights as soon as it learned that Time Warner was not going to carry KPXN on a single channel throughout its service area." In support, KPXN cites the Commission's Implementation of the Cable Television Consumer Protection and Competition Act of 1992,Broadcast Signal Carriage Issues Clarification Order ("Clarification Order") where the Commission indicated that "broadcast stations may assert their carriage and channel positioning rights at any time so long as they have not elected retransmission consent." KPXN maintains that the instant complaint was timely filed because the statutory deadlines for filing a channel positioning complaint started when the Station made a formal request on October 1, 1998 to be carried on channel 16, and not when Time Warner decided to carry KPXN on dual channels. Finally, KPXN asks that Time Warner be ordered to commence the carriage of KPXN on a single, uniform channel throughout its Chatsworth system immediately. DISCUSSION 9. We grant KPXN's channel positioning complaint in part and deny in part. We conclude that Time Warner is required to carry KPXN on one single, uniform channel throughout the Chatsworth system, and find no merit in Time Warner's argument that KPXN's must carry complaint was not timely filed or that it must be dismissed because of laches. In the Clarification Order, the Commission reiterated that "broadcast stations may assert their carriage and channel rights at any time so long as they have not elected retransmission consent." In addition, KPXN maintains that it did not know of Time Warner's arrangement prior to October 1998. Pursuant to Section 76.61(a), KPXN informed Time Warner that it was not meeting its channel positioning obligations, and requested that Time Warner come into compliance with the statutory channel positioning requirements. Thus, Time Warner's letter of October 28, 1998, denying KPXN's request for carriage on a single, uniform channel triggered the statutory period in which to file a must carry complaint under Section 76.7(4)(iii) of the Commission's rules. 10. The Commission has stated that cable operators must comply with channel positioning requirements absent a compelling technical reason. The Commission specifically held that the need to employ additional traps, reconfigure the basic tier, or make technical changes are generally not sufficient grounds for denying the channel positioning request of a must carry station. The Commission has also noted that "[a] cable system claiming that it cannot meet a channel positioning request for technical reasons will have to provide evidence that clearly demonstrates that the operator cannot meet this requirement." In the instant case, Time Warner has not provided such evidence. 11. Despite Time Warner's arguments, we find that its dual-channel arrangement to carry the KPXN signal during the upgrade of the Chatsworth system is not in accordance with the Commission's rules. In situations similar to the one at hand, the Commission has indicated that the statutory rights of a station entitled to mandatory carriage cannot be delayed until a system rebuild is completed, and has ordered operators to place the stations in question on a single channel that can be received by all subscribers during the upgrade period. Moreover, the fact that Time Warner complied with the Commission's programming changes notification rules when it notified its subscribers of the addition of KZKI to its channel line-up and of its carriage on two different channels does not bring the Chatsworth system into compliance with the Commission's must carry rules. 12. Finally, contrary to what KPXN argues, we find that it is not entitled to carriage on channel 16 as it claims. KPXN's belief that it is entitled to be carried on channel 16 simply because that channel is "acceptable" to the Station is statutorily groundless. As noted above, Section 614(b)(6) of the Communications Act of 1934, as amended, and Section 76.57 of the Commission's rules permit a commercial station to elect as its channel position on a cable system either: a) its over-the-air channel number; b) the channel on which it was carried on July 19, 1985 or January 1, 1992; or c) such other channel number as is mutually agreed upon by the station and the cable operator. Under the statute, because KPXN's carriage on Time Warner's Chatsworth system did not begin until 1997, KPXN could only elect to be carried on its over-the-air channel, or as an alternative, it could have negotiated a channel position with Time Warner. KPXN, however, did not comply with the Commission's directives to select or negotiate a channel position in its initial decision. In doing so, the Station lost its right to elect its over-the-air channel position until the next must carry election period. Consequently, we are ordering that KPXN be carried on any single, uniform, and mutually agreeable channel that can be received by all of the Chatsworth system subscribers. ORDERING CLAUSES 13. Accordingly, IT IS ORDERED, pursuant to Section 614 of the Communications Act of 1934, as amended [47 U.S.C.  534(d)(3)], that the complaint (CSR-5337-M) filed by Paxson Los Angeles License, Inc. against Time Warner Communications, seeking carriage on a single, uniform channel IS GRANTED IN PART AND DENIED IN PART. 14. IT IS FURTHER ORDERED that Time Warner Communications SHALL COMMENCE THE CARRIAGE of KPXN on any single, uniform channel on the basic tier, viewable by all subscribers throughout the Chatsworth system, within (60) sixty days of the release of this Memorandum Opinion and Order. 15. This action is taken pursuant to authority delegated under Section 0.321 of the Commission's rules. FEDERAL COMMUNICATIONS COMMISSION Deborah E. Klein, Chief Consumer Protection and Competition Division Cable Services Bureau