******************************************************** 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 re Petition of: ) ) Venture Technologies Group, Inc. CSR-5094-A) ) For Modification of Market ) of Station WNPA-TV ) MEMORANDUM OPINION AND ORDER Adopted: January 20, 1998 Released: January 23, 1998 By the Deputy Chief, Cable Services Bureau: INTRODUCTION 1. Venture Technologies Group, Inc. ("Venture"), licensee of Station WNPA-TV (Channel 19), Jeannette, Pennsylvania (formerly WTWB-TV, Johnstown, Pennsylvania), has filed a petition to add the communities of Johnstown, Altoona and Clearfield, Pennsylvania to WNPA-TV's area of dominant influence (or "ADI") insofar as mandatory carriage of the station is concerned. TWFanch-One, Co., d/b/a CableComm ("Cable Operator" or "CableComm") and STC License Company ("STC"), licensee of WJAC-TV (Channel 6), Johnstown, Pennsylvania filed oppositions to this petition, to which Venture has not replied. BACKGROUND 2. Pursuant to 614 of the Communications Act and implementing rules adopted by the Commission in its Report and Order in MM Docket 92-259, 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 Report and Order in MM Docket 92-259, 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. MARKET FACTS AND THE PARTIES' ARGUMENTS 7. Station WNPA-TV is currently licensed to Jeannette, Pennsylvania, which is in Westmoreland County and is part of the Pittsburgh, Pennsylvania ADI. Prior to September 2, 1997, WNPA-TV (then operating as WTWB-TV) was licensed to Johnstown, Pennsylvania, which is part of the Johnstown-Altoona ADI. WNPA-TV's community of license was changed pursuant to Venture's Petition for Rulemaking, filed with the Commission on January 31, 1996, and its Petition for Reconsideration, filed with the Commission on May 28, 1996. Venture sought and was granted the change in community of license based in part on its assertion that WTWB-TV had a long history of failing to serve the public interest and that the Johnstown-Altoona market is economically depressed and cannot support WTWB-TV, the fifth television station in that market. Venture specifically sought to move into the allegedly underserved Pittsburgh market. 8. In the instant Petition, Venture seeks to modify its current ADI to include three communities in its former ADI. The specified cable communities of Johnstown (Cambria County), Altoona (Blair County), and Clearfield (Clearfield County) are all assigned to the Johnstown-Altoona, Pennsylvania ADI. Cambria County is adjacent to Westmoreland County, on Westmoreland's eastern border. Adjacent to Cambria County is Blair County, which is on Cambria's eastern border, and Clearfield County is adjacent to Cambria County's northern border. According to Nielsen's 1997 County/Coverage Study, WTWB-TV (now operating as WNPA-TV) had a zero share in Blair, Cambria and Clearfield counties, and only a very small audience in Cambria and Clearfield. WNPA-TV's transmitter is located at the summit of Laurel Ridge in Somerset County, approximately fifteen miles southwest of Johnstown. Its Grade A contour covers the Johnstown cable community, Altoona is just within its predicted Grade B contour, and Clearfield is well outside its predicted Grade B contour. 9. Venture states that prior to WNPA-TV's reallotment from Johnstown to Jeannette, Pennsylvania, it was carried on the three cable systems in question. Just prior to the effective date of the reallotment (September 2, 1997), the Cable Operator informed Venture that it would delete WNPA- TV's carriage from all three communities as a result of the station's change in community of license and consequential loss of must-carry rights in these communities. According to Venture, WNPA-TV satisfies the Commission's first statutory factor, historical carriage, because it had been licensed to Johnstown since 1953, and the cable communities of Johnstown, Altoona and Clearfield have carried the station at some time during this 45 year period. Venture argues that the market modification it requests "would facilitate continuation of the established status quo and would not disrupt existing cable viewership," thus avoiding "the kind of significant viewer disruption that the 1992 Cable Act's market modification provision was expressly designed to prevent." As to the second statutory factor, Venture asserts that WNPA-TV provides a city grade signal to Johnstown, a Grade A signal to Altoona, and "more than a +3.75 dBmV signal to the Clearfield, Pennsylvania cable system," which, Venture contends, "is adequate for must-carry situations." Venture further argues that WNPA-TV receives mail from viewers in each of the three cable communities, receipt of which reflects the station's viewership and popularity. Venture offers as evidence of its coverage of local issues letters from the Johnstown Region American Red Cross acknowledging WTWB-TV's co-sponsorship of a bloodmobile at the Johnstown Galleria Mall in April 1997. Venture also asserts that "a substantial number of businesses advertise on WNPA-TV in order to reach viewers in each of the three cable communities." Finally, Venture asserts that WNPA-TV has a significant audience in Blair, Cambria and Clearfield counties. In support, Venture offers a Declaration from Lawrence H. Rogow, Venture's President, which avers that WTWB-TV is one of nine television broadcast stations reportable in the Johnstown-Altoona Designated Market Area ("DMA"), and that the other eight stations are carried on the cable systems serving Johnstown, Altoona, and Clearfield. 10. In response, the Cable Operator and STC argue that WNPA-TV has affirmatively chosen to distance itself from the Johnstown-Altoona market and associate itself instead with the Pittsburgh market by requesting the modification of its city of license from Johnstown to Jeannette, a suburb of Pittsburgh. They quote Venture's arguments to the Commission, offered in support of Venture's petition to modify WNPA-TV's community of license, that the Johnstown-Altoona region is "extremely economically depressed;" that WNPA-TV's predecessor "WTWB-TV, Channel 19 . . .has had a long history of failing to serve the public interest;" and that the "Johnstown-Altoona market cannot support WTWB-TV [WNPA-TV], the fifth station in the market." The Cable Operator argues that Venture's claims of long-standing cable carriage and significant viewership are undermined by Venture's previous representations of successive bankruptcies and "extended off-air periods." The Cable Operator notes that WNPA-TV was dark from May, 1990 to July, 1996 and was carried for the first time on the Clearfield cable system in September, 1996 pursuant to WNPA-TV's assertion of must-carry rights. The Cable Operator acknowledges that WNPA-TV was carried on the Johnstown and Altoona cable systems prior to going off the air in 1990, but asserts that it has been carried on those cable systems since September 1996 pursuant to its must carry requests. Citing a recent Commission affirmation of a Cable Services Bureau order, the Cable Operator argues that cable carriage for less than two years and only under the mandate of must carry does not constitute historic carriage. The Cable Operator also disputes Venture's assertion that WNPA-TV satisfies the second statutory factor by providing a Grade A signal to Altoona. Relying on the Television & Cable Factbook (1997 Edition) the Cable Operator notes that Altoona lies just within WNPA-TV's predicted Grade B contour. Moreover, both the Cable Operator and STC argue that Venture has admitted to the Commission that WNPA-TV is, in fact, unable to serve the Altoona cable communities. They quote Venture's assertion that "because of terrain limitations, actual signal coverage into Altoona will not effectively serve the public [and] actual coverage in Altoona of a station broadcasting on the Laurel Ridge is substantially less than that shown using standard prediction methods." Likewise, both Oppositions note that the Clearfield cable community is well outside of WNPA-TV's predicted B contour. 11. The Cable Operator argues further that WNPA-TV does not provide local programming and notes that Venture fails to quantify or provide relevant evidence of such programming. The Operator asserts that the evidence proffered by Venture, letters acknowledging co-sponsorship of a blood drive, does not demonstrate that WNPA-TV offers programming tailored to the communities in question. The Operator further notes that Venture offers no support for its assertion that businesses advertise on WNPA- TV to reach viewers in its cable communities. As to the third statutory factor, the Cable Operator notes that its cable systems currently carry two Altoona stations (WTAJ-TV (NBC) and WATM-TV (ABC)) and two Johnstown stations (WWCO-TV (Fox) and WJAC (CBS)) that provide daily local news and other local coverage. Thus, the Operator contends, Venture has not argued or shown that WNPA-TV provides a service that other local stations do not and that would enhance its argument for modification and carriage. Finally, the Cable Operator disputes Venture's claim that WNPA-TV has a significant audience in the cable communities and thus satisfies the fourth statutory factor. CableComm argues that the Nielsen Station Index appended to Venture's petition fails to support its claim and offers, in response, a study it commissioned by Media Strategies. The proffered study shows no viewing in Blair County and a zero share of the audience in Cambria and Clearfield. 12. STC asserts that granting Venture's petition for modification would have an anticompetitive effect on WJAC-TV and the other television broadcast stations in the Johnstown-Altoona ADI. STC agrees with the assertion Venture made in its earlier request to change its community of license that the Johnstown-Altoona market is "economically depressed" and over-burdened by too many television stations. STC notes that Venture is seeking must carry rights in both the Pittsburgh ADI, by virtue of its new community of license, and the Johnstown-Altoona ADI, by virtue of its former presence in Johnstown. STC asserts that it would be "grossly unfair to -- and possibly even endanger -- the television stations that are truly local" to the cable communities in question. STC states that WNPA- TV's new city of license, Jeannette, is 66 miles from Altoona and 78 miles from Clearfield, and asserts that recent Commission decisions refused stations' must carry rights in communities more than 60 miles from the stations' community of license even where the station and cable community were in the same market because the distance made it impossible to consider these as local stations. STC further states that Venture emphasized two public benefits that would result from its change in community of license: an increase in the local stations serving the underserved Pittsburgh ADI and a decrease in the "overtelevisioned" Johnstown-Altoona ADI. STC asserts that both of these public benefits would be compromised by the market modification Venture seeks. STC contends that to justify must carry rights on the Johnstown-Altoona region, WNPA-TV would have to focus local programming on this region, rather than the underserved Pittsburgh suburbs it sought to serve by moving its community of license. Furthermore, STC argues, if WNPA-TV is carried on the Johnstown-Altoona cable systems, it will once again add to the overburdened television market and compete for limited advertising revenues with the local stations. STC asserts that it and the other Johnstown-Altoona televisions stations will be placed at a distinct disadvantage if WNPA-TV can offer advertisers guaranteed access to both the Pittsburgh and Johnstown-Altoona markets, while the truly local Johnstown-Altoona stations have carriage only in that market. STC concludes that the Commission will invite a flood of similar applications and petitions seeking must-carry rights in multiple ADIs if it allows Venture first to change its community of license from a small ADI to a larger one and then to compel carriage in both the small and large markets. ANALYSIS AND DECISION Request to Include Johnstown, Pennsylvania 13. We shall grant Venture's petition to modify WNPA-TV's market to include the community of Johnstown. The evidence submitted, evaluated pursuant to the four statutory and other relevant factors, persuades us that Johnstown is properly considered part of the station's ADI. With regard to the first statutory factor, we note that until recently Johnstown was WNPA-TV's city of license and was carried on the Johnstown cable system prior to going off the air in 1990. We find it most significant that Johnstown is only 37 miles from Jeannette, the new city of license, and remains within WNPA-TV's city grade contour. Despite WNPA-TV's current low viewership levels in Johnstown and its apparent lack of local programming, we believe, based on the geographic proximity and historic connection between the station and the community, that granting the ADI modification as to the Johnstown community will effectuate the purposes of Section 614(h) of the Communications Act, as amended, and minimize disruption to cable subscribers. Request to Include Altoona and Clearfield, Pennsylvania 14. With respect to the communities of Altoona and Clearfield, we shall deny Venture's petition to modify WNPA-TV's market. In evaluating Venture's petition, it is appropriate to consider each statutory factor, but we are not required to give specific weight to any one factor. With respect to application of the first statutory factor, historic carriage, to the Altoona cable community, it appears that the station was carried by the cable system prior to the station going off the air in 1990. However, after a dark period of more than six years, carriage was resumed less than two years ago and only pursuant to its must-carry request. As to Clearfield, there was no historic carriage prior to 1990, and carriage since mid-1996 has only been as a result of the station's exercise of its must-carry rights. Even if the station's historic carriage was more persuasively shown, this factor alone would not outweigh the station's inability to satisfy the other three criteria. 15. In this case we find the second statutory factor, coverage or other local service to the community, is very significant. We note first that in contrast to Johnstown's proximity to Jeannette, Altoona and Clearfield are more than 60 miles from the new city of license. Moreover, Clearfield is outside the station's predicted Grade B Contour, and it appears that Altoona is at best on the fringe of WNPA-TV's predicted Grade B contour despite Venture's current assertion that WNPA-TV provides a Grade A signal to Altoona. We note, too, that the current assertion contradicts Venture's earlier Petition for Rulemaking, which represented to the Commission that although Altoona is within the station's predicted Grade B contour, "actual station signal coverage into Altoona will not effectively serve the public." Moreover, Venture repeatedly emphasized in all of its petitions to the Commission that the reallotment from Johnstown to Jeannette did not involve any technical changes to the station, which might conceivably have altered the signal coverage of Altoona. We further note that Venture did submit a reply to refute the argument raised in the Oppositions to this Petition that WNPA-TV's signal does not, in fact, provide a Grade B signal to the Altoona community. Furthermore, consistent with Venture's earlier assertion, Altoona does appear to be at the outer edge of the station's predicted Grade B contour. 16. In our consideration of the second statutory factor, we find that Venture has offered only unsupported assertions of viewership, popularity, and advertiser interest in each of the cable communities. Venture asserts that it provides substantial public service programming responsive to local concerns of the three communities. But Venture's only support for this assertion consists of correspondence evidencing WNPA-TV's predecessor's co-sponsorship of a bloodmobile in Johnstown and an unexplained note about CRIMESTOPPERS in Johnstown. Neither item even suggests the WNPA-TV or its predecessor WTWB-TV provided local coverage of issues of interest to Altoona or Clearfield. Moreover, both Oppositions to the Petition note that other stations within the Johnstown-Altoona market provide daily local newscasts and other local coverage, in contrast to the apparent lack of such local interest programming by WNPA-TV. 17. As to the final statutory factor, evidence of viewing patterns, Venture has offered no evidence for its unsupported assertion that WNPA-TV, operating as WTWB-TV, has a significant audience in the cable communities in question. In fact, based on the current Nielsen County/Coverage Study, WTWB-TV has no measurable viewing and no audience share in Blair County where Altoona is located, and has a zero share in Clearfield County. 18. Finally, we acknowledge STC's objection that granting Venture's Petition would put WJAC-TV and the other Johnstown-Altoona stations at an unfair competitive disadvantage, and we share its concern that granting this Petition could be an invitation to other stations to first change their community of license and then seek multiple must-carry rights through modification of their new markets. These concerns are additional factors that influence our decision to deny Venture's Petition as to the Altoona and Clearfield communities that are marginal under our traditional market modification analysis. We conclude, however, with respect to Johnstown, that the geographical proximity to both the new community of license and the transmitter is so compelling that it outweighs Venture's previous assertions of interest in distancing itself from what it termed an "economically depressed market." 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-5094-A), filed August 29, 1997, on behalf of Venture Technologies Group, Inc. IS GRANTED with respect to the community of Johnstown, Pennsylvania and IS DENIED with respect to the communities of Altoona and Clearfield, Pennsylvania. WNPA-TV shall notify the relevant cable system in writing of its carriage and channel position elections ( 76.56, 76.57, 76.64(f) of the Commission's Rules), within thirty (30) days of the release date of this Order. The affected cable system shall come into compliance with the applicable rules within sixty (60) days of such notification. 20. This action is taken pursuant to authority delegated by 0.321 of the Commission's Rules. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau