WPCa# 2MB%RK Z3|XTimes New RomanTimes New Roman Bold P6G;P"i~'^09CSS999S]+9+/SSSSSSSSSS//]]]Ixnnxg]xx9?xgxx]xn]gxxxxg9/9MS9ISISI9SS//S/SSSS9?/SSxSSIP!PZ9+ZM999+99999999S/xIxIxIxIxIlnIgIgIgIgI9/9/9/9/xSxSxSxSxSxSxSxSxSxSxIxSxRxSxSxS]SxIxIxInInInZnIxigIgIgIgIxSxSxSxZxSxZxS9/9S999Su]ZZxSg/gCg9g9g/xSbxSxSxSxSxn9n9n9]?]?]?]ZgFg/gMxSxSxSxSxSxSxxZgIgIgIxSg9xS]?g9xSi+SS88WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN/>/>/>/x]SSSSx]x]x]x]xSxSx]SSxSxSf]xSxSxSxIxIxWxIx{nInInInISSSWS]a?/?]?9?]]WW]n/nKn9nCn/x]xx]x]SSxxIxIxI]?]?]?]WnUn9nax]x]x]x]x]x]xxWnInInIx]n9x]]?n9xSz+SS8-8WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN8HH"&H>XHH8HB8>HH^HH>"".2",2,2,"222N2222"&22H22,006"6."""""""""""2H,H,H,H,H,XAB,>,>,>,>,""""H2H2H2H2H2H2H2H2H2H2H,H2H1H2H2H282H,H,H,B,B,B6B,H?>,>,>,>,H2H2H2H6H2H6H2""2"""2F866H2>>(>">">H2;H2H2H2H2XHB"B"B"8&8&8&86>*>>.H2H2H2H2H2H2^HH6>,>,>,H2>"H28&>"H2?22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN$<<$.2",2222`2 LL2 LL2L"",,2d""of television station KRTW(TV), Channel 57 (presently KVVV),= X- xzԍ The sale of Pray, Inc. to VVI Baytown Inc. was approved by the Commission on January 27, 1994. Baytown, Texas, to amend  X&- xSection 76.51 of the Commission's Rules?&b X9-ԍ 47 C.F.R. 76.51.? to add the community of Baytown, Texas to the  X-Houston, Texas television market. X- xjԍ See Report and Order in MM Docket 92259 (Broadcast Signal Carriage Issues), 8 FCC Rcd 2965, 297778, n. 150 (1993).  X-  X-"BACKGROUND ă   x2. Section 76.51 of the Commission's Rules enumerates the top 100 television markets  xand the designated communities within those markets. Among other things, this market list is  x<used to determine territorial exclusivity rights under Section 73.658(m) and helps define the scope",))ZZ"  X- xKof compulsory copyright license liability for cable operators.3a Xy- xԍ See 47 C.F.R. 76.658(m) and 17 U.S.C. 111(f). With passage of the Satellite Home  x Viewer Act of 1994, P.L. 103369, 108 Stat. 3477 (1994) local signal copyright liability is now  xZaccorded stations throughout their mandatory cable carriage area, that is, throughout the "area of  xdominant influence" or ADI of the market to which the station is assigned. Although this  xygenerally reduces the importance of the Section 76.51 market list as a determinator of copyright  xliability, there remain situations where the list determines liability, i.e., where the 35mile zones associated with the Section 76.51 list extend outside of the ADI of the market.3 Certain cable television syndicated  xexclusivity and network nonduplication rights are also determined by the presence of broadcast  X- xstation communities of license on this list.K Xt -ԍ See 47 C.F.R. Part 76, Subpart F.K Some markets consist of more than one named  x[community (a "hyphenated market"). Such "hyphenation" of a market is based on the premise  xthat stations licensed to any of the named communities in the hyphenated market do, in fact,  X- x=compete with all stations licensed to such communities.rq {O -ԍ See CATVNon Network Agreements, 46 FCC 2d 892, 898 (1974). r Market hyphenation "helps equalize  xcompetition" where portions of the market are located beyond the Grade B contours of some  Xv-stations in the area yet the stations compete for economic support.vvBq {Oi -ԍ See Cable Television Report & Order, 36 FCC 2d 143, 176 (1972). v   x3. In evaluating past requests for hyphenation of a market, the Commission has  xconsidered the following factors as relevant to its examination: (1) the distance between the  xiexisting designated communities and the community proposed to be added to the designation; (2)  xwhether cable carriage, if afforded to the subject station, would extend to areas beyond its Grade  x-B signal coverage area; (3) the presence of a clear showing of a particularized need by the station  xrequesting the change of market designation; and (4) an indication of benefit to the public from  X - xthe proposed change. Each of these factors helps the Commission to evaluate individual market  xconditions consistent "with the underlying competitive purpose of the market hyphenation rule  X-to delineate areas where stations can and do, both actually and logically, compete."[\q {O- xԍ See, e.g., TV 14, Inc. (Rome, Ga.), 7 FCC Rcd 8591, 8592 (1992), citing Major Television Markets (Fresno {O- xiVisalia, California), 57 RR 2d 1122, 1124 (1985). See, also, Press Broadcasting Company, Inc., 8 FCC Rcd 94, 95 (1993).[  Xb-  lx4. Section 4 of the Cable Television Consumer Protection and Competition Act of 1992, b q yO -ԍ Cable Television Consumer Protection and Competition Act, Pub. L. No. 102385, 106 Stat. 1460 (1992).  XK- xwhich added Section 614 to the Communications Act of 1934,< K q yO-ԍ 47 U.S.C. 614.< requires the Commission to make  xrevisions needed to update the list of top 100 television markets and their designated communities  xin Section 76.51 of the Commission's Rules. The Commission stated that where sufficient  xevidence has been presented tending to demonstrate commonality between the proposed  xcommunity to be added to a market designation and the market as a whole, such cases will be" ,N(N(ZZ"  x=considered under an expedited rulemaking procedure consisting of the issuance of a Notice of  X-Proposed Rule Making based on the submitted petition.i Zq yOb- xԍ "Requests for specific hyphenated market changes that appear worthy of consideration will be routinely  {O*- xdocketed and issued as rulemaking proposals." See Report and Order in MM Docket 92259 (Broadcast Signal Carriage Issues), 8 FCC Rcd at 297778, n. 150 (1993).i  X-  X-#THE PETITION ă   ?x5. According to the petitioner, Baytown is located on the northwest coast of Galveston  xBay, approximately 24 miles east of Houston. Baytown, like Houston, is located in Harris  xCounty. Houston is the largest and Baytown is the third largest city. KVVV(TV) attaches maps  xof its city grade and Grade A and Grade B contours, on which has been superimposed the 35 xmile zones of Baytown, Houston, Galveston, Rosenberg, Alvin and Katy. These show that 98%  xMof the Houston 35mile zone lies within KVVV's Grade B contour and the signal contours of  xAlvin, Rosenberg, Katy and Galveston substantially overlap. Galveston and Conroe lie just  xoutside the Houston 35mile zone, but their respective 35mile zones each include portions of  x.Houston. Petitioner states that inclusion of Baytown, Galveston, Alvin, Rosenberg, Katy and  xyConroe in the Houston television market on a hyphenated basis would not significantly extend  xKVVV's mandatory carriage rights beyond its Grade B contour. All of the stations licensed to  xthe several communities in the Houston ADI (with the possible exception of the Conroe station)  xserve substantial areas in common and compete throughout the market for programming, viewers and advertising revenues.   x6. Petitioner contends that although KVVV(TV) is competitive with the other marketarea  xstations, it is disadvantaged in this competition by having to compete with other stations in the  xmarket without comparable cable television carriage rights. Although it is entitled to carriage on  X- xarea cable systems by virtue of its inclusion in the Houston ADI,e q {O-ԍ See Section 76.56(b) of the Commission's Rules.e because Baytown, along with  xthe other named communities are not designated communities in the Section 76.51 market  xlistings, they are considered a "distant signal" for purposes of compulsory copyright license  X- xyliability if carried on certain cable systems in the ADI. @|q yO- xԍ Stations licensed to communities specifically designated in Section 76.51 are considered local for all cable  xwsystems within the 35mile zones of all listed communities in a given hyphenated market. The absence of Baytown,  xGalveston, Alvin, Rosenberg, Katy and Conroe as designated communities in this market list generally results in  xiKVVV(TV)'s classification as a "distant signal" for marketarea cable systems more than 35 miles from Houston,  xTexas and outside of the Houston ADI. By amending Section 76.51 of the Rules to include the communities of  xxBaytown, Galveston, Alvin, Rosenberg, Katy and Conroe in the market as proposed, cable systems will be able to  x,carry the signals of stations from Baytown, along with the other named communities and Houston on an equal basis in terms of copyright liability. As a result, petitioner states, they face  xadditional copyright fees attendant to its carriage as a "distant signal." It also states that because  xof the Commission's syndicated exclusivity rule, KVVV(TV) cannot purchase nonnetwork  xzprogramming sold to Houston television stations. Petitioner alleges that it cannot both pay"e ,N(N(ZZ"  xHouston prices for nonnetwork programming and afford to indemnify cable systems for the  xadded copyright fees that its carriage as a distant signal would trigger. The principal benefits of  xthe requested change, however, is said to be parity among market stations under Section  x73.658(m) of the Commission's rules (territorial exclusivity rules) and to benefit the public "by  xaccess to all stations licensed to communities within the television market, KVVV(TV)'s  xindependent religious station and home shopping programming service, seeking to promote competition and consumer choice."  XH- ( DISCUSSION ă  X -  x8. Based on the facts presented, we believe that a sufficient case for redesignation of the  xsubject market has been set forth so that this proposal should be tested through the rule making  xprocess, including the comments of interested parties. It appears from the information before us  xthat the television stations licensed to Houston, Baytown, Galveston, Alvin, Rosenberg, Katy and  xyConroe do compete for audiences and advertisers throughout much of the proposed combined  x<market area and that sufficient evidence has been presented tending to demonstrate commonality  x.between the proposed communities to be added to the market designation and the market as a  xkwhole. Moreover, the petitioner's proposal appears to be consistent with the Commission's  xpolicies regarding redesignation of a hyphenated television market. Accordingly, comment is  xrequested on the proposed addition of Baytown, Galveston, Alvin, Rosenberg, Katy and Conroe to the Houston television market.  X-a ADMINISTRATIVE MATTERS ă  X-Ex Parte Rules NonRestricted Proceeding  X-  x10. This is a nonrestricted notice and comment rule making proceeding. Ex parte  X- xpresentations are permitted, provided they are disclosed as provided in the Commission's Rules.   X~-See generally 47 C.F.R.  1.1202, 1.1203 and 1.1206(a).  XR-Comment Information   Rx11. Pursuant to applicable procedures set forth in  1.415 and 1.419 of the  X - xCommission's Rules, interested parties may file comments on or before August 26, 1996 and  X- xreply comments on or before September 16, 1996. All relevant and timely comments will be  xconsidered before final action is taken in this proceeding. To file formally in this proceeding,  xparticipants must file an original and four copies of all comments, reply comments, and  xZsupporting comments. If participants want each Commissioner to receive a personal copy of their  xcomments, an original plus nine copies must be filed. Comments and reply comments should be  xzsent to the Office of the Secretary, Federal Communications Commission, Washington, D.C.  xM20554. Comments and reply comments will be available for public inspection during regular  xNbusiness hours in the FCC Reference Center (Room 239) of the Federal Communications Commission, 1919 M Street, N.W., Washington, D.C. 20554. "'' ,N(N(ZZ%"Ԍ X-Initial Regulatory Flexibility Analysis   ~x12. We certify that the Regulatory Flexibility Act of 1980 does not apply to this  xrulemaking proceeding because if the proposed rule amendment is promulgated, there will not  xjbe a significant economic impact on a substantial number of small business entities, as defined  xby Section 601(3) of the Regulatory Flexibility Act. A few cable television system operators will  Xv- xbe affected by the proposed rule amendment. The Secretary shall send a copy of this Notice of  Xa- xProposed Rule Making, including the certification, to the Chief Counsel for Advocacy of the  xSmall Business Administration in accordance with paragraph 603(a) of the Regulatory Flexibility  X5-Act. Pub. L. No. 96354, 94 Stat. 1164, 5 U.S.C. Section 601 et seq. (1981).  X -  X -Additional Information   x13. This action is taken pursuant to authority delegated by Section 0.321 of the  xCommission's rules. For additional information on this proceeding, contact Vanessa Stallings  X -(202) 4187200.     X-X` hp x (#%'0*,.8135@8: