Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of: ) ) Comcast Cablevision of Gloucester) CSR-5352-A County, Inc. ) ) For Modification of the Philadelphia,) Pennsylvania ADI Market ) MEMORANDUM OPINION AND ORDER Adopted: July 28, 1999 Released: July 29, 1999 By the Deputy Chief, Cable Services Bureau: I. INTRODUCTION 1. Comcast Cablevision of Gloucester County, Inc. (hereinafter "Comcast"), filed the above- captioned petition for special relief seeking to modify the Philadelphia, Pennsylvania Area of Dominant Influence ("ADI") relative to television broadcast station WTVE (Ch. 51), Reading, Pennsylvania. Specifically, Comcast requests that WTVE be excluded, for purposes of the cable television mandatory broadcast signal carriage rules, from the cable system communities it serves in Gloucester County, New Jersey. An opposition to this petition was filed on behalf of WTVE to which Comcast has replied. 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, Broadcast Signal Carriage Issues ("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 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)(l)(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 1992 Cable 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 new 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 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 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 1992 Cable Act, that a station not be deleted from carriage during the pendency of an ADI change request. III. THE PLEADINGS 8. The cable system in question is located in Gloucester County, New Jersey and is part of the Philadelphia, Pennsylvania ADI. Reading, Pennsylvania, the city of license of WTVE, is also part of the same ADI and is approximately 54.5 miles from the cable system's principal headend. 9. In support of its petition, Comcast states that WTVE has never been carried on its system, despite having been on-the-air since 1980. Comcast argues that this fact demonstrates that its cable communities are not part of WTVE's true market. Secondly, Comcast states that none of the communities it serves fall within WTVE's Grade B contour. Of those communities requested for exclusion, Comcast points out that all are geographically distant from WTVE's city of license at anywhere from 49 to 65 miles. Comcast states that these distances are similar to or exceed those found to justify previous modification requests. Moreover, Comcast states that in a previous decision involving WTVE and similarly-situated communities, the Commission granted the modification request where the average distances were 43 to 75 miles. 10. Third, Comcast argues that WTVE provides little or no local programming to the instant communities and the programming it does provide, primarily religious, home shopping and Spanish- language, does not appear to have any specific nexus to the communities at issue. Comcast states that this lack of nexus is emphasized by the fact that the television listings for the Philadelphia Inquirer and the Gloucester County Times do not include WTVE. In any event, Comcast asserts that its system subscribers are provided with extensive and more focused coverage of local news and events through the numerous other Philadelphia-market stations it does carry. Comcast maintains that even if WTVE were to provide programming of local interest to the system's communities, such programming would be undermined by the coverage the other local stations provide. Finally, Comcast argues that WTVE has no measurable ratings in Gloucester County, in which the communities are located. 11. In opposition, WTVE argues that the case for mandatory carriage of WTVE on Comcast's system is considerably more compelling than that of similarly-situated WFMZ-TV (Ind., Ch. 69), Allentown, Pennsylvania, against which Comcast's arguments were rejected by the Commission less than two years ago. WTVE states that for ten years prior to November 1, 1996, it broadcast Home Shopping Network programming almost exclusively. From November 1996 until June 1, 1998, WTVE states that it aired a mix of approximately 70 hours weekly of informational long-form advertising provided by a subsidiary of Paxson Communications and approximately 98 hours weekly of news, sports, religious programming and entertainment. Since June 1998, however, WTVE states that it has become the only Hispanic television station in the Philadelphia television market which is an affiliate of Telemundo, a national network which provides a broad array of entertainment, sports, news and children's programming in the Spanish language. WTVE points out that the Philadelphia DMA is the 4th largest market and the 18th largest Hispanic market in the United States. 12. WTVE points out that it is carried on virtually every cable system in southeastern Pennsylvania, including all systems serving Philadelphia and Delaware counties and reaches the homes of approximately 1.3 to 1.4 million subscribers in Pennsylvania and Delaware. Moreover, WTVE states that it has entered into an agreement with Suburban Cable Television, operator of cable systems in Pennsylvania, Delaware and New Jersey, that it will be carried on all of Suburban's system on a negotiated roll-out schedule within the next 3 1/2 years. WTVE states that Gloucester County, where Comcast provides cable service, is a suburban county lying along the Delaware River across from central Philadelphia and Delaware County, Pennsylvania, and the communities Comcast serves range from 8 to 20 miles from downtown Philadelphia. Indeed, WTVE indicates that not only is Gloucester County defined by Nielsen as part of the metro area of Philadelphia, but the Commission in its decision in Maranatha Broadcasting stated that "[v]irtually all of the communities in question [which are part of the Comcast system] are situated along the Delaware River, clustered together just across from Philadelphia." 13. WTVE argues that within Comcast's principal system communities, the Hispanic population ranges anywhere from 1.4 percent to 8 percent and current demographic data shows that nearly 2800 of the 104,000 residents are Hispanic. WTVE states that the overall growth of Gloucester County's Hispanic population since 1990 has been comparable to the nation's (i.e., 34.6% county-wide; 36.7% nationwide). Despite this fact, WTVE states that Comcast currently provides no Hispanic television or cable programming. 14. With regard to the modification factors, WTVE states that Comcast correctly points out that it has no historic carriage on Comcast's system or on neighboring systems. However, WTVE argues that this fact has little significance since the Commission has properly taken the view that "historical carriage should not be given great weight in the context of a deletion request. . . To do so would tend to defeat the underlying purposes of the carriage requirements. . .[and] would, in effect, prevent weaker or newer stations that cable systems had previously declined to carry, from ever being carried." Moreover, WTVE states that it should be noted that during the period when it broadcast home shopping, it was considered a more-distant duplicating station to another home shopping station carried by Comcast and therefore could not be carried. 15. While WTVE agrees that it does not provide a Grade B signal to Comcast's system from its present headend site in Reading, it states that it holds a construction permit for a new tower and transmitter facility at Fancy Hill, Pennsylvania, which is about 11 miles east of Reading. From this site, WTVE states that it will be able to provide a Grade B contour over Comcast's system. WTVE indicates that it has already prevailed before the Pennsylvania court of appeals and the state supreme court in its efforts to secure zoning rights for its new transmitter and will soon have a final trial to resolve the issue. In addition, WTVE indicates that by using the more accurate Longley-Rice method of calculating predicted coverage, its coverage currently extends considerably beyond Comcast's communities. WTVE argues that since the Commission generally takes into account a station's plans to upgrade facilities in determining its coverage for market modification matters, WTVE's construction permit to construct a tower at Fancy Hill should be given full credit, despite Comcast's attempts to second guess Pennsylvania zoning laws. In addition, WTVE states that a recently-conducted signal strength test indicates that it can deliver a good quality signal to Comcast's principal headend. 16. Further, WTVE states that it not only provides programming of particular interest to Gloucester County's Hispanic residents, but such programming is unique in the Philadelphia television market. Along with network programs, WTVE states that it also provides Hispanic news, "The Alicia Show" which is the only Hispanic full-length television program produced in the Philadelphia market, special events programming, a non-Hispanic program featuring local African American and Hispanic musicians, artists and poets, gospel programming, and spanish-language versions of Nickelodeon children's programming. WTVE points out that its programming has been praised by the elected officials of Camden County, which lies just north of Gloucester County. 17. While Comcast alleges that its subscribers receive abundant local coverage through the numerous Pennsylvania and New Jersey stations it currently carries, WTVE argues that none of those stations does so in the Spanish language or provides the emphasis on ethnic and Black minorities. Finally, with regard to viewing patterns in Gloucester County, WTVE points out that, despite Comcast's assertions, WTVE is listed in the both the Philadelphia Inquirer and the Philadelphia News. In addition, WTVE maintains that the fact that it can cite no studies showing that it is viewed by non-cable subscribers is hardly probative in a situation where Comcast's cable system enjoys 83% cable penetration in Gloucester County. 18. In reply, Comcast argues that the four-part test for market modification fully supports the instant request and WTVE fails to rebut its demonstration that the cable system communities should be deleted from WTVE's market. Moreover, Comcast maintains that WTVE's reliance on Maranatha Broadcasting is misplaced. In that decision, Comcast points out, the Commission relied on the fact that the station was carried on cable systems serving adjacent cable communities and that the station provided evidence of specifically-targeted programming to the counties in which the communities were located. In this instance, however, Comcast states that WTVE does not provide sufficient local programming and aside from the station's carriage in cable communities located across the Delaware River in Pennsylvania, WTVE does not demonstrate significant carriage in Gloucester County or surrounding communities in New Jersey. 19. Comcast argues that WTVE all but ignores the Commission's decision in Garden State Cable which modified WTVE's market to exclude similarly-situated communities in Burlington, Camden, Gloucester and Salem Counties, New Jersey. Comcast states that it is significant that Garden State Cable was issued after the Maranatha Broadcasting decision and the only changed circumstances from that decision was the change in WTVE's programming from home shopping to spanish-language programming. Comcast maintains, however, that WTVE's new programming format fails to target the specific cable communities herein. Since WTVE has no local nexus with the cable communities, is geographically remote and places no Grade B contour, Comcast asserts that allowing carriage on its cable system would constitute an unwarranted commercial windfall for WTVE by extending its viewership beyond the area it reaches from its off-air transmission. 20. Comcast states further that while WTVE tries to downplay the importance of its lack of historic carriage, the Commission has consistently held that historical carriage will be considered along with the other three factors. Because WTVE also fails to comply with the other modification criteria, Comcast maintains that this factor weighs heavily in favor of deleting the system communities from WTVE's market. In addition, Comcast argues that the fact that WTVE still faces a "trial" to secure its zoning rights for its new transmitter makes it clear that WTVE's claims in this area are still speculative. In any event, Comcast points out that the Commission has rejected attempts in the past by stations attempting to gain credit in advance for pending facilities upgrades. Finally, Comcast asserts that, despite the signal strength test provided by WTVE, it is unlikely that the station is able to provide an adequate off-air signal in individual households within the cable communities, which is the relevant inquiry in market modification cases, since that helps to further define the station's actual market reach. IV. DISCUSSION 21. We grant Comcast's modification request. Based on geography and other relevant information, we believe that the cable system herein is sufficiently removed from WTVE that the communities ought not be deemed part of the station's market for mandatory carriage purposes. 22. As an initial matter, we note that, according to the legislative history of the 1992 Cable Act, the use of ADI market areas is intended "to ensure that television stations be carried in the same areas which they service and which form their economic market." Changes may be sought and granted by the Commission "to better effectuate the purposes" of the mandatory carriage requirements. The market change process incorporated into the Communications Act, however, is not 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 involved is warranted. When viewed against this backdrop and considering all of the relevant factual circumstances in the record, we believe that Comcast's deletion petition appears to be a legitimate request to redraw ADI boundaries to make them congruous under the 1992 Cable Act and the Commission's rules, and do not evidence a pattern of discriminatory conduct against the station. A. Historic Carriage 23. WTVE began operation in 1980. Despite being on-the-air for 19 years, it has no history of carriage on Comcast's Gloucester County system. Given the statutory directive, weight must be given to this factor, but that must be done bearing in mind that the objective of the Section 614(h) process is to "better effectuate the purposes" of the broadcast signal carriage scheme. Thus, with respect to the question of historical carriage patterns, attention must be paid to the circumstances from which such patterns developed. Some stations have not had the opportunity to build a record of historical carriage for specific reasons that do not necessarily reflect a judgment as to the geography of the market. We note here, however, that WTVE has been broadcasting for many years. It is also undisputed that WTVE is not carried by any other nearby cable systems serving Gloucester County. Carriage of the station at issue on nearby cable systems is not a factor specified in the statute, but it does seem likely, depending on the specific circumstances involved, that such carriage could serve as evidence to define the logical scope of a station's market. In the instant case, the fact that WTVE is not carried by other nearby cable systems in Gloucester County is a further indication that there is no market nexus between WTVE and the communities at issue. B. Grade B Coverage/Local Service 24. A station's local service to cable communities is one of the relevant factors to consider that is not influenced by the type or age of the station involved or historical carriage. Service may be measured through geographic means: by examining the distance between the station and the cable communities subject to the deletion request and taking into account natural phenomena such as waterways, mountains and valleys which tend to separate communities. A station's broadcast of local programming, which has a distinct nexus to the cable communities, is also evidence of local service. Finally, a station's Grade A or Grade B contour coverage is an additional indicator of local service and we will weigh the presence or absence of such technical coverage accordingly. In the instant case, we do not find that WTVE, which broadcasts primarily Spanish-language programming, currently provides local programming specifically directed to the subject communities. While the programming that it does offer can be considered to be of general interest to the ADI's Hispanic population as a whole, neither it nor the locally-produced programming WTVE cites in its opposition is claimed to be specifically relevant to the Comcast communities. 25. In addition, the cable communities in question lie outside of WTVE's predicted Grade B contour and are, on average, approximately 54 miles from WTVE's city of license. We note that WTVE has a pending construction permit to relocate its transmitter site from Reading, Pennsylvania to Fancy Hill, Pennsylvania, and that its proposed Grade B contour from the Fancy Hill site would apparently encompass Comcast's system communities. However, due to the fact that WTVE has been unable to finalize its zoning rights with the State of Pennsylvania regarding this relocation, and the pendency of the construction permit with the Commission, the proposed new Grade B contour is only an eventuality. In the past, in deciding ADI modification requests, we have considered the fact that broadcast stations were in the process of upgrading their facilities. In the instant case, however, the completion of the upgrade process is uncertain due to WTVE's inability to state approval for its zoning rights to its new transmitter site. 26. Further, upon review, we do not agree with WTVE that the Longley-Rice propogation study presented justifies its argument that it provides a Grade B or better signal to the communities herein. While there appears to be some Grade B coverage in areas beyond the Gloucester County communities, it appears spotty at best and there is no evidence of any Grade B coverage in the immediate vicinity where Comcast's system is located. Adding this factor to WTVE's lack of historic carriage, lack of programming and lack of viewership, we conclude that it cannot be used to justify a denial of Comcast's request. C. Carriage of Other Stations 27. 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, the Pennsylvania and New Jersey stations carried by Comcast appear to have a closer nexus to the Gloucester County cable system. D. Viewership 28. Comcast also shows that WTVE has no audience in Gloucester County, New Jersey. Moreover, the A.C. Nielsen 1997 County/Coverage Survey for Gloucester County does not even list WTVE. While we note that the Commission has recognized that specialty stations, such as WTVE, typically attract limited audiences, this dearth of viewership is of evidentiary significance when combined with the lack of both historical carriage and Grade B coverage. Summary 29. We have carefully considered each statutory factor in the context of the circumstances presented here. Given the evidence as to the lack of Grade B coverage, the lack of viewership in Gloucester County, the lack of carriage of WTVE by any other cable system in this county, and the minimal local programming, we conclude that it is logical and consistent with the objective of Section 614 of the Communications Act to delete Comcast's cable system from WTVE's market for mandatory carriage purposes. V. ORDERING CLAUSES 30. Accordingly, IT IS ORDERED, pursuant to Section 614(h)(1)(C) of the Communications Act of 1934, as amended (47 U.S.C. 534(h)(1)(C)), and Section 76.59 of the Commission's rules (47 C.F.R. 76.59), that the petition for special relief filed by Comcast Cablevision of Gloucester County, Inc. IS GRANTED. 31. 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