Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of: ) ) Complaint of SAH Acquisition Corporation II,) CSR-5339-M a wholly-owned subsidiary of Shop At Home,) Inc., against Cable One, Inc. ) ) Request for Carriage ) MEMORANDUM OPINION AND ORDER Adopted: May 28, 1999 Released: June 3, 1999 By the Chief, Consumer Protection and Competition Division, Cable Services Bureau: I. INTRODUCTION 1. SAH Acquisition Corporation II, a wholly-owned subsidiary of Shop At Home, Inc., licensee of Television Broadcast Station KCNS (Ind., Ch. 38), San Francisco, California, has filed a must carry complaint against Cable One, Inc. ("Cable One") for that cable operator's failure to carry KCNS on its system serving the City of Santa Rosa, California and surrounding unincorporated Sonoma County. An opposition to this complaint was filed on behalf of Cable One. No reply from KCNS has been received. II. 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, Report and Order ("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 research organization. III. SUMMARY OF ARGUMENTS 3. In support of its complaint, KCNS states that by letter dated October 5, 1998, it informed Cable One that Shop At Home had acquired its license and had completed technical upgrades that restored the station to full power. KCNS states that, at the same time, it requested carriage on Cable One's system. KCNS asserts that Cable One's response did not properly agree to or deny KCNS carriage, but instead discussed the station's poor signal quality and possible copyright liability. KCNS indicates that Cable One requested "a written agreement for indemnification" and committed to "work with [KCNS'] engineer" in its efforts to augment the signal. In a followup letter, KCNS states that it requested verification from Cable One as to whether its earlier letter was a rejection or an invitation to work with the station regarding signal quality. At the same time, KCNS states that it provided a written indemnification agreement which, upon signing, would commit Cable One to cooperate with KCNS' efforts to provide a good quality signal and grant carriage upon successfully delivering a signal that met the Commission's signal strength criteria. When no response was forthcoming from Cable One, KCNS states that it contacted the system by phone explaining that it wanted to test its signal and requesting that Cable One sign the agreement it had previously sent in order to avoid the filing of a must carry complaint. KCNS argues that although Cable One's general manager agreed to sign the agreement, no copy was ever received. 4. KCNS maintains that it satisfies the statutory definition of a qualified local commercial television station under the must carry rules as it is licensed to a community located within the ADI market as Cable One's system. KCNS points out that since it is located within the same market as Cable One's communities, no increased copyright liability should occur. However, it asserts that it has agreed to compensate Cable One in the event that there is any copyright liability and has also committed to acquiring and installing any and all necessary improvements and equipment, at its own expense, to ensure the delivery of a good quality signal. Therefore, KCNS requests that the Commission order Cable One to commence carriage of its signal on channel 38 upon the station's delivery of a good quality signal to cable system's principal headend. 5. In opposition, Cable One states that Section 615(h)(1)(B)(iii) of the 1992 Cable Act specifically excludes from the definition of stations eligible for must status any station "that does not deliver to the principal headend of a cable system a signal level of -45 dBm for UHF signals . . . at the input terminals of the signal processing equipment. . . ." Cable One states that the signal quality test results it submits herein establish that KCNS's signal does not meet this threshold. Indeed, in four different test measurements, Cable One indicates that the strongest signal KCNS demonstrated was -16.1 dBmV, which is well below the requisite minimum. While Cable One states that it stands ready to work with KCNS in the delivery of an acceptable signal, it objects to KCNS's tactics in demanding that it sign a document that could be construed to bind Cable One to carriage of KCNS. Cable One argues that there is no provision in the Commission's rules requiring that such an endorsement is necessary, particularly in an instance where the signal is so obviously below adequate signal strength. Moreover, Cable One points out that, to date, KCNS still has not demonstrated a capability of delivering an acceptable quality signal. IV. DISCUSSION 6. According to 76.55(e) of the Commission's rules, commercial television broadcast stations, such as KCNS, are entitled to carriage on cable systems located in the same ADI. KCNS is located in the San Francisco, California ADI, which is also where the communities served by Cable One are located. However, Cable One maintains that KCNS is not entitled to such carriage because the station does not provide a good quality signal to the system's principal headend. 7. Cable One has provided signal strength tests which comply with our engineering criteria and indicate that KCNS does not provide a good quality signal. We note, however, that KCNS has offered to provide, at its own expense, specialized equipment to Cable One to ensure the receipt of a good quality signal at the system's headend. KCNS maintains that with the use of specialized equipment it will be able to provide a signal to Cable One's headend that is consistent with Commission criteria. The Commission has stated that amplifiers and other 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 . . . . KCNS, by committing to provide specialized equipment, satisfies its obligation to bear the costs associated with delivering a good signal to Cable One's headend. Consequently, we order Cable One to carry KCNS's signal in the event that KCNS provides a good quality signal employing the specialized equipment it has offered to install at Cable One's principal headend. V. ORDERING CLAUSES 8. Accordingly, IT IS ORDERED that the petition filed by SAH Acquisition Corporation II IS GRANTED pursuant to 614(d)(3) of the Communications Act of 1934, as amended (47 U.S.C. 534). Cable One, Inc. IS ORDERED to commence carriage of KCNS on its Santa Rosa, California cable system sixty (60) days from the date that KCNS provides a good quality signal at Cable One's principal headend. KCNS shall notify Cable One in writing of its carriage and channel position elections (76.56, 76.57, and 76.64(f) of the Commission's Rules) within thirty (30) days of providing a good quality signal. 9. This action is taken pursuant to authority delegated by 0.321 of the Commission's rules. FEDERAL COMMUNICATIONS COMMISSION Deborah Klein, Chief Consumer Protection and Competition Division Cable Services Bureau