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File pnmc5021 (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ************************************************************************* Before the Federal Communications Commission Washington, D.C. 20554 In re: ) ) Cypress Broadcasting Corporation ) CSR-4412 Monterey, California ) ) For Waiver of  76.92(f) of the ) Commission's Rules ) MEMORANDUM OPINION AND ORDER Adopted: December 2, 1996 Released: December 6, 1996 By the Deputy Chief, Cable Services Bureau: INTRODUCTION 1. Cypress Broadcasting Inc., licensee of Television Broadcast Station KCBA (Fox, Channel 35), Salinas, California has filed the captioned "Petition For Waiver of  76.92(g) of the Commission's Rules." This petition seeks a waiver of the Commission's significantly viewed exemption to the network nonduplication rules. KTVU Partnership, licensee of Television Broadcast Station KTVU (Fox, Channel 2), Oakland, California, filed an opposition to this petition, and KCBA filed a reply to the opposition, after which KTVU filed a response, together with a motion for leave to file it. BACKGROUND 2. Upon the request of a local station which has the exclusive rights to distribute a network program, a cable operator generally may not carry a duplicating network program broadcast by a distant station. However, an otherwise distant station is exempt from the application of the network nonduplication rules if it is considered significantly viewed in a relevant community. KCBA seeks a waiver of the significantly viewed exemption of the Commission's network nonduplication rules so it may assert network nonduplication protection against KTVU, which is currently considered to be significantly viewed in certain communities served by Monterey Peninsula TV Cable ("Monterey"). 3. In KCST-TV, Inc., the Commission held that in order to obtain a waiver of 76.92(f) of the Commission's Rules, which provides for an exemption to the network nonduplication rules for significantly viewed stations, petitioners would be required to demonstrate for two consecutive years that a station was no longer significantly viewed, based either on community, or system specific, noncable viewing data, to one standard error. For each year, the data must be obtained as a result of independent professional surveys taken during two one-week periods which are distributed proportionately between the relevant cable communities, and which are also separated by at least thirty days; not more than one of the surveys may be taken between April and September of each year. THE PARTIES' ARGUMENTS 4. KCBA argues that the data it submits from a survey conducted by VideoProbeIndex, Inc. ("VPI") are sufficient to demonstrate that during the past two years, KTVU has not met the Commission's standard to be considered significantly viewed in the relevant cable communities. Moreover, KCBA maintains that it is operating at a competitive disadvantage, because it cannot assert its network nonduplication rights against KTVU, which carries Fox programs, as does KCBA, so long as KTVU maintains its significantly viewed status. Accordingly, KCBA asks that its waiver petition be granted, and that it be allowed to assert its network nonduplication rights against KTVU on Monterey's cable system. In support of this request, KCBA submits viewing data from the cable communities during four one-week surveys of noncable households, which were conducted by VPI during the weeks of June 23-29 and September 15-21, 1993, and June 22-28 and September 14-20, 1994. According to these surveys, in 1993, KTVU's net weekly circulation was 3.6% (with a standard error of +/- 2.0%), and its audience share was 0.6%; in 1994, KTVU's net weekly circulation was 11.8% (with a standard error of +/- 3.5%), and its audience share was 1.1% (with a standard error of +/-0.7%). Adjusting by the standard error, therefore, KCBA concludes that KTVU failed to meet the Commission's standard for a significantly viewed independent station in the communities noted either in 1993 or in 1994. According to KCBA, the viewing data clearly demonstrates that during the past two years, KTVU has been unable to attract the proportion of noncable viewers necessary to be regarded as significantly viewed by the Commission in the communities listed, pursuant to 76.5(i) of the Commission's Rules. 5. In response, KTVU contends that, since 86,968 homes of a total 93,946 homes in the franchise area subscribe to cable television, or 92.6%, the concept of significant viewing off-air has virtually no meaning, because any survey of noncable homes would be statistically unreliable. KTVU adds that almost 45% of the households in the Salinas-Monterey area have unlisted telephones, but that VPI limited its survey to homes with listed telephones, resulting in a sample which comprised only 3.2% of the homes in the cable communities. KTVU adds that the number of responses in the survey often were not reasonably proportionate to the populations of the various communities included in it. In addition, KTVU argues that its survey figures actually meet the Commission's standard for significant viewing if you round them off after you add the standard error to them (rather than subtract the standard error from them). KTVU states that this rounding procedure, in fact, was utilized when the Commission adopted its initial list of significantly viewed stations in 1972, and that published audience studies are always reported in whole numbers, rather than in figures to the nearest tenth. Finally, KTVU claims that KCBA has failed to demonstrate that it is significantly viewed in the cable communities or that viewers prefer its signal to KTVU's, and that grant of the waiver requested will deprive subscribers of KTVU's substantial news and other local programming, including the Giants' baseball games. 6. In reply, KCBA notes that grant of its waiver request will not preclude cable systems' carriage of KTVU's non-network programming, including its local news and other features. KCBA also notes that  76.54(b) of the Commission's Rules specifies that, unlike county-wide showings, community-specific significantly viewed data is required to be one standard error above the minimum viewing level. KCBA adds that it is unaware of any case in which the Commission has accepted rounding community-specific figures, as opposed to county- wide figures, for the purposes of demonstrating significantly viewed status. KCBA emphasizes that the same surveys which showed that KTVU was no longer significantly viewed in the Salinas/Monterey area also demonstrated that KCBA is still significantly viewed there. According to KCBA, this indicates that the rule, in fact, is functioning as it was originally designed and is preventing local network stations, such as KCBA which was assigned to the Salinas-Monterey, California area of dominant influence (or "ADI"), from having to compete on cable systems in smaller television markets with distant network stations such as KTVU, which was assigned to the San Francisco, California ADI. KCBA adds that KTVU actually had lower viewing levels in areas where KTVU argues that the sample size was too low, such as Monterey, and that the station had higher levels in areas where the sample size was higher than the median. Therefore, if an absolutely proportionate survey were possible to achieve, KTVU's viewing levels would be even lower then than they are now, according to KCBA. 7. KCBA submits a "Declaration" from VPI's President, Robert Schultz, claiming that "VPI is the acknowledged leader in conducting these community--specific surveys--since 1973. * * * * The Monterey/Salinas surveys are based on the same methodology used by VPI for 21 years and accepted by the FCC since that time." KCBA adds that, since its decision in KCST-TV, Inc., supra, the Commission has not held the level of cable penetration in communities to be of decisional significance in significantly viewed decisions. Citing the Commission's prior delegated decision in Outer Banks Cablevision Associates, KCBA notes that it granted significantly viewed status to three stations in that case, even though there were only about 100 noncable homes out of a total of 2,000 homes in the cable community, or about 5%, and only 24 of the noncable homes, or just over 1%, were actually capable of being surveyed during the appropriate time periods. Moreover, according to KCBA, the Commission has always accepted VPI surveys exclusively premised upon households with listed telephones, regardless of the percentage of households with unlisted telephones in the relevant cable communities. Specifically, when it submitted significantly viewed surveys for Oakland and San Diego, California, the percentage of unlisted telephones in these communities was 58% and 52 %, respectively, while that for Detroit, Michigan, during its VPI survey was 44%, and no evidence has been proffered in this case that limiting a survey only to households with listed telephone numbers skews its results in any way. Finally, insofar as the issue of proportionality is concerned, KCBA notes that the Commission previously has accepted surveys of multiple cable communities provided that each community in the initial screening and mailing process is proportionately sampled, since it is not possible to control a survey's response rate. 8. In response, KTVU contends that nothing in the Commission decisions previously cited, one of which was unopposed, indicates that the Commission ever resolved or even considered such issues as the intentional exclusion of homes with unlisted telephones from viewing data or the utilization of off-air viewing in surveys of communities with high cable penetration. KTVU concludes that the reservations the Commission expressed in its prior decision in KCST-TV, Inc., concerning cases with high cable penetration have yet to be addressed. KTVU also maintains that, since no valid conclusions can be drawn concerning the off-air viewing patterns of homes with unlisted telephones compared to homes with listed telephones, the only way to conduct a valid study with accurate viewing data is to utilize "blanket sampling," even though this type of survey may be less efficient and more costly. DISCUSSION 9. We find that VPI conducted its surveys according to approved and reasonable statistical methodology, and that they fully comply with the requirements of 76.54(b) of the Commission's Rules, which permit the submission of a single survey in situations where cable systems serve more than one community and allows the results to be applied to each relevant cable community for the purpose of determining significantly viewed status. While this rule does require that samples contain noncable households for each community, it does not require that a minimum number of households be sampled in each community. Simmons Communications Co., L.P. The survey data submitted, including the test dates, meet both the criteria provided in the Commission's rules and the evidentiary standards explained in KCST-TV, Inc., supra, neither of which has ever prohibited the use of off-air viewing surveys which include only households with listed telephone numbers. However, since combined surveys were taken for the communities served by Monterey, the rules do require that each community be proportionally represented on the basis of its relative population in the sample, which VPI did. In terms of proportionality, the greatest difference between population distribution and sample distribution in this case is 7% (in the viewing survey for 1993 in Salinas), which is less than the difference between these groups and that previously approved by the Commission on delegated authority in Simmons Communications Company, L.P. (8.7% in Kent County, Maryland). During the first year, 1993, the surveys were taken during the weeks of June 23-29 and September 15-21. In the second year, 1994, the surveys were taken during the weeks of June 22-28 and September 14-20. The 1993 data showed that KTVU had an average 0.6% share of total weekly viewing hours and an average 3.6% net weekly circulation share in the noncable homes in the relevant cable communities. In 1994, the data submitted showed that KTVU had an average share of 1.1% of total weekly viewing hours and an average 11.8% net weekly circulation. Because the reported total weekly audience viewing shares noted above do not reach the required 2% viewing level even when considering the standard error, we find that KTVU is not significantly viewed in the relevant cable communities, and we need not consider the net weekly circulation calculations in this instance. ORDERING CLAUSES 10. Accordingly, IT IS ORDERED, That the petition (CSR-4412), filed November 9, 1994, by Cypress Broadcasting, Inc. IS GRANTED. 11. 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