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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 the Matter of Petition of ) ) Independence Television Company ) for Modification of Market of ) CSR 4849-A Station WDRB-TV, Louisville, Kentucky) ) MEMORANDUM OPINION AND ORDER Adopted: February 20, 1997 Released: February 26, 1997 By the Deputy Chief, Cable Services Bureau: INTRODUCTION 1. Independence Television Company ("Independence") filed the captioned petition pursuant to Sections 76.7(a) and 76.59(a) of the Commission's rules requesting that the towns of Jasper and Huntingburg, Indiana and the surrounding portions of Dubois County, Indiana (the Dubois Communities") currently served by TCI of Indiana, Inc. ("TCI-I") be included in the market of station WDRB-TV (Ch. 41-FOX), Louisville, Kentucky. TCI-I filed an opposition to the petition, and Independence filed a reply. BACKGROUND 2. Pursuant to 614 of the Communications Act and implementing rules adopted by the Commission in its Report and Order in MM Docket 92-25, 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 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 1992 Cable Act, that a station not be deleted from carriage during the pendency of an ADI change request. 7. Adding communities to a station's market generally entitles that station to insist on cable carriage in those communities. However, this right is subject to several conditions: 1) a cable system operator is generally required to devote no more than one-third of the system's activated channel capacity to compliance with the mandatory signal carriage obligations, 2) the station is responsible for delivering a good quality signal to the principal headend of the system, and 3) the system operator is not required to carry the signal of any station whose signal substantially duplicates the signal of any other local signal carried, or the signals of more than one local station affiliated with a particular broadcast network. If, pursuant to these requirements, a system operator elects to carry only one such duplicating signal, the operator is obliged to carry the station from the ADI whose city of license is closest to the principal headend of the cable system. Accordingly, depending upon the circumstances involved, the addition of communities to a station's market may have the following consequences. It may guarantee that station's carriage in the subject communities. Should there be more must-carry stations that one-third of the system's channel capacity, it would provide the system operator with an expanded list of must-carry signals from which to choose. Should the station be a duplicating network station, it will determine which station has priority carriage in the subject communities added. MARKET FACTS AND ARGUMENT 8. Independence Television Company is licensed to operate WDRB-TV in Louisville, Kentucky, which, in turn, is located in the Louisville, KY ADI. TCI-I provides cable service to Jasper and Huntingburg, Indiana and surrounding portions of Dubois County, which are in the Evansville, Indiana ADI. Independence requests modification of WDRB-TV's television market to include the Dubois Communities served by TCI-I. 9. In support if its request, Independence presents evidence allegedly showing that the Dubois Communities should be included within WDRB-TV's market, when considered under the four factor test set forth in Section 614(h)(1)(C)(ii) of the Communications Act. First, Independence asserts the WDRB-TV has been carried on TCI-I's cable system since 1976, and thus satisfies the historical carriage factor. Independence argues that this history of carriage is entitled to substantial weight and demonstrates that the cable system and its subscribers value WDRB-TV and the services WDRB-TV provides. Independence further contends that the requested market modification would facilitate continuation of the status quo which would benefit subscribers; loss of cable viewer access to WDRB-TV, on the other hand, would cause the kind of viewer disruption that the statutory market modification provisions were designed to prevent. 10. Independence asserts that WDRB-TV viewership in Dubois County is demonstrated by the station's 3 total share, 4 cable share and 15 cume reported for Dubois County. These data, argues Independence, demonstrate that WDRB-TV's programming appeals to, and is watched by, viewers in the Dubois Communities. Independence also asserts that WDRB-TV places a Grade B signal contour over a large portion of Dubois County, and that the Dubois Communities lie just outside WDRB-TV's predicted Grade B signal contour. Independence claims that, since the Dubois Communities are on the fringe of WDRB-TV's Grade B signal contour, they should be considered a part of WDRB-TV's market. 11. TCI-I opposes the petition arguing that cable operators are not required to carry more than one station that is affiliated with a national network. TCI-I states that it already carries station WTVW-TV, another Fox network affiliate that is located closer to its cable system headend than is WDRB-TV. TCI-I states that WTVW-TV is licensed to Evansville, Indiana, less that forty miles from TCI-I's headend, and in the Evansville ADI. On the other hand, WDRB-TV, also affiliated with the Fox Network, is located more than sixty miles away in Louisville and in the Louisville ADI. TCI-I argues that, given these facts and the cited must- carry statutory provisions, its cable system would not have to carry WDRB-TV. 12. TCI-I also contends that the statutory factors militate against the requested market modification in that Independence has failed to show that the statutory criteria are met in this case. TCI-I disputes Independence's argument that loss of access to WDRB-TV on the cable system would cause viewer disruption. First, TCI-I states that it discontinued carriage of WDRB-TV at noon on October 7, 1996, prior to receiving a copy of Independence's petition later that afternoon. With WDRB-TV thus deleted from its channel line-up, TCI-I argues that viewer disruption would indeed occur, if it were now required to re-instate carriage. Secondly, with Fox Network programming already available on its cable system through carriage of Evansville station WTVW-TV, TCI-I argues that any significant viewer disruption from the decision to discontinue carriage of WDRB-TV is precluded. 13. TCI-I, pointing to the distance of approximately sixty miles between the Dubois Communities and WDRB-TV, asserts that WDRB-TV is not generally available off the air in the Dubois Communities. For these reasons, TCI-I argues that a decision to modify WDRB- TV's market would result in giving WDRB-TV carriage beyond where it would normally expect to reach, resulting in a commercial windfall for the station. TCI-I argues therefore that this is not the case of a cable operator serving as a bottleneck to broadcast distribution. TCI-I argues further that Independence has failed to demonstrate that WDRB-TV offers any programming truly local to the Dubois Communities. For that reason, TCI-I contends that the public interest would not be served by granting the petition. TCI-I also asserts that the carriage of other stations licensed to Evansville and Bloomington, Indiana, with their coverage of local news and sporting events, and WTVW-TV's Fox Network programming preclude any credit to WDRB-TV under the third statutory factor. TCI-I contends that Independence did not address whether other stations meet the needs of the Dubois Communities and thus failed to carry its burden under this criterion. 14. Finally, TCI-I asserts that the station viewing data presented by Independence shows negligible viewing of WDRB-TV in the Dubois County. TCI-I also presented a study of the relative viewing strengths of WDRB-TV and WTVW-TV in Dubois County, which, according to TCI-I, shows that WDRB-TV viewing is low. 15. Independence asserts in reply that the Commission routinely grants market modification requests resulting in more than one network affiliate having must-carry rights on a cable system. Independence argues that it is irrelevant that another Fox network station in Evansville, Indiana is located closer to TCI-I's cable system than is WDRB-TV. Independence asserts that historic carriage is considered an important factor supporting grant of market modification petitions. Independence also claims that TCI-I failed to rebut its demonstration that historic carriage of WDRB-TV mandates a grant of the petition. Arguing that Grade B signal contours are only predictions, not boundaries, Independence further contends that the Commission has modified stations' markets to include communities beyond their Grade B signal contours. 16. Independence asserts that WDRB-TV service in Dubois County is made evident not only from the Nielsen figures submitted with its petition, but also from the study presented by TCI-I. Independence contends that TCI-I's data shows that non-cable Dubois County households watching WDRB-TV range from 31.1% of total households for the Sunday - Saturday, 7 a.m. -1 a. m. daypart to 74.6% of total households for the Monday - Friday 4 - 6 p.m. daypart; this, it argues, disproves TCI-I's claim that WDRB-TV is not generally available off-the-air in the Dubois Communities. The distance from WDRB-TV in Louisville to the Dubois Communities must be disregarded, Independence contends, because TCI-I carries other stations from Louisville as well as from the more distant Bloomington-Indianapolis, Indiana market. Independence also contends that TCI-I failed to provide any information showing that programming of other carried stations provide coverage to the Dubois Communities, and furthermore that carriage of other stations is an enhancement factor that is pertinent only where other stations do not serve the community at issue. ANALYSIS AND DECISION 17. We will deny Independence's petition. In instances such as these where an affiliate of a network has asked that its market be modified, we are especially concerned that our decision not unduly upset the economic market place expectations underlying the affiliation concept. In this instance we note that WTVW-TV, the current local Fox affiliate serving the Communities, garners an average audience share of 8 which is more than twice that of WDRB- TV who only garners an average audience share of 3 in the communities at issue. This clearly demonstrates a preference for station WTVW-TV in the subject Communities. In this regard, we note that Independence has failed to show that WDRB-TV provides any programming that is directed to the needs and interests of the Dubois Communities Further we note that WTVW-TV places a Grade A contour over a portion of the Communities and a Grade B contour over all of the systems serving the Communities in question, while at the same time the more distant Fox affiliate WDRB-TV fails to place a Grade B contour over any of the subject communities. We also note that WDRB-TV is distant from the cable Communities with some being at least sixty miles away. This is consistent with the disparity in viewership between the two stations. While the record demonstrates that WDRB-TV's has some audience share and a history of carriage on TCI-I's cable system serving the Dubois Communities, these factors are insufficient in view of the above to upset the present economic structure of the relevant ADI. The above factors reveal that the market structure as presently configured accurately reflect market conditions. ORDER 19. 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 Independence Television Co. in File No. CSR-4849-A IS DENIED. 20. This action is taken pursuant to authority delegated by Section 0.321 of the Commission's Rules, 47 C.F.R. Section 0.321. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau