******************************************************** 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: ) ) Paxson Boston License, Inc. ) ) vs. ) CSR-5063-M ) Cablevision of Boston, L. P. ) ) Request for Mandatory Carriage ) of Television Station WGOT-TV, ) Merrimack, NH ) ) MEMORANDUM OPINION AND ORDER Adopted: December 16, 1997 Released: December 19, 1997 By the Chief, Consumer Protection and Competition Division, Cable Services Bureau: INTRODUCTION 1. Paxson Boston License, Inc. "("Paxson"), licensee of commercial television station WGOT- TV, Merrimack, New Hampshire, filed a complaint pursuant to Sections 76.7 and 76.1(a) of the Commission's rules, claiming that Cablevision of Boston, L.P. ("Cablevision"), a cable operator serving Boston, Massachusetts and surrounding areas has unlawfully refused to carry the signal of WGOT-TV on its cable television system. Paxson is a subsidiary of Paxson Communications Corporation ("PCC"). Cablevision filed an Opposition to the Petition and Paxson filed a Reply. Cablevision also filed a Motion for Leave to File Response to Reply accompanied by a Response to Reply. Paxson then filed a Motion for Leave to File and a Supplemental Pleading. Cablevision responded with an Opposition to Motion for Leave to File and Supplemental Pleading. SUMMARY OF PLEADINGS 2. In support of its complaint, Paxson argues that WGOT-TV is entitled to mandatory carriage on Cablevision's Boston system because it meets the statutory definition of a "qualified local commercial television station" under the Commission's must carry rules. Paxson states that WGOT-TV and Cablevision are both located within the Boston Area of Dominant Influence ("ADI") and, as such, the carriage of WGOT- TV's signal will not cause increased copyright liability for Cablevision. Paxson further states that tests conducted by Paxson personnel demonstrate that WGOT-TV is delivering a good quality signal to Cablevision's principal headend. Finally, Paxson states that despite WGOT-TV's eligibility for carriage on Cablevision's system, Cablevision has failed to respond to Paxson's May 2, 1997 letter requesting carriage within thirty days of receipt of that request as required by Section 76.61(a)(2) of the Commission's rules. 3. In opposition, Cablevision argues that Paxson's complaint should be dismissed as procedurally defective because the complaint was filed prematurely in violation of the notice requirement set forth in Section 76.61(a)(1) of the Commission's rules. According to Cablevision, Paxson's assertion that Cablevision never replied to Paxson's May 2, 1997 letter requesting carriage for WGOT-TV is false. Cablevision states that following receipt of Paxson's May 2 letter, the parties engaged in ongoing, mutual conversations regarding discrepancies surrounding Paxson's ability to deliver a good quality signal from WGOT-TV to Cablevision's principal headend. Cablevision notes that Paxson sent Cablevision a letter dated July 31, 1997, which culminated in the completion of a re-test of WGOT-TV's receiving equipment on July 29, 1997. Cablevision states that while it was not planning to dispute the July 29 test results, Cablevision had no opportunity to respond to Paxson's July 31 letter because Paxson filed its Complaint on August 1, 1997. Thus, according to Cablevision, not only did Paxson fail to provide notice of the alleged violation pursuant to Section 76.61(a)(1) of the Commission's rules, but Paxson also failed to provide Cablevision any opportunity to respond, as required by Section 76.61(a)(2) of the Commission's rules. 4. Cablevision also argues that Paxson's Complaint should be denied because WGOT-TV is a duplicative network signal and, as such, is not entitled to carriage on Cablevision's Boston system. Cablevision states that pursuant to Section 614(b)(5) of the Communications Act and Section 76.56(b)(5) of the Commission's rules, cable systems are not required to carry the signals of more than one local television station affiliated with a particular broadcast network as defined by Section 76.55(f) of the Commission's rules. Cablevision argues that it is not required to carry WGOT-TV because WGOT-TV is affiliated with the inTV Network (also known as the "InfoMall TV Network") and another station affiliated with that same network -- WHRC, Norwell, Massachusetts -- has also requested carriage on Cablevision's Boston system. Cablevision states that the Commission's rules provide that a cable operator must only carry the signal of the closest network affiliate whose community of license reference point, as defined Section 76.53, is closest to the principal headend of the cable system. Cablevision states that the principal headend for the Boston System is located in West Roxbury, Massachusetts. Cablevision further states that Norwell, Massachusetts, the community of license of WHRC, is located approximately 20 miles from West Roxbury, while Merrimack, New Hampshire, the community of license of WGOT-TV, is located approximately 44 miles from West Roxbury. Thus, according to Cablevision, if its cable system were faced with having to carry the duplicative signals of both WGOT-TV and WHRC, it should only be required to carry the signal of WHRC, which is the station located closest to its principal headend. 5. Cablevision further notes that Paxson is an indirect corporate subsidiary of PCC, which in turn owns and operates the inTV Network. Cablevision also notes that the Commission has previously determined that inTV is a television network for purposes of the must carry requirements. Cablevision also argues that there can be no dispute that WGOT-TV is an affiliate of the inTV Network because the station is owned and operated by an subsidiary of the entity that owns the network, and WGOT-TV consistently has been identified on corporate letterhead and promotional materials as an affiliate of the inTV Network. Cablevision also contends that PCC and inTV, through its subsidiary Paxson, controls almost all of the air time on WHRC. Cablevision reports that Paxson has leased approximately 162 hours per week of the air- time of WHRC pursuant to a Time Brokerage Agreement with WHRC's licensee. In addition, Cablevision reports that PCC, through various subsidiaries, has provided, or may in the future provide, financing and/or financial guarantees in connection with the acquisition of WHRC. 6. In reply, Paxson argues that WGOT-TV's Complaint is timely filed and procedurally sound. Paxson contends that it filed a Complaint because Cablevision failed to respond to Paxson's carriage request in writing within 30 days as required by Section 76.61(a)(2) of the Commission's rules. Paxson notes that Cablevision concedes that it did not respond to Paxson's May 2 letter, in writing, as required. Paxson contends that it sent a follow-up letter on July 31, 1997 in an attempt to forestall the need to file a must carry complaint. According to Paxson, it was under no obligation to send the July 31, 1997, and, as such, the letter is irrelevant to the proceeding. Paxson claims that it simply filed its must carry complaint in order to preserve its rights. 7. Paxson further argues that WGOT-TV and WHRC are not affiliates of a common network. According to Paxson, while WGOT-TV receives a substantial portion of its programming from inTV, WHRC obtains programming from a separate and distance entity -- "Paxnet." Paxson argues that the Commission has previously held in Jovan Broadcasting Corp. that distinct entities owned by a common parent which provide television broadcast stations with programming that is comparable in content do not constitute the same network for purposes of Section 76.56(b)(5) of the Commission's rules. Paxson argues that while inTV and Paxnet may be owned by the same corporate parent, both are separate business entities that provide different programming and utilize different distribution methods. 8. Cablevision responds to Paxson's reply by stating that because the Commission has recently rendered two adverse decisions regarding the inTV Network, requiring affected cable systems to carry the closer of two inTV affiliates under circumstances similar to those in the instant case, Paxson has deliberately created "Paxnet," a new network designed as an artificial vehicle for avoiding the Commission's rules. Cablevision argues that none of the information in PCC's corporate, financial or other promotional materials suggest that WHRC is anything but an inTV Network affiliate. 9. Cablevision also argues that the programming schedules of WGOT-TV and WHRC submitted by Paxson do not demonstrate that Paxnet is a separate and distinct entity from inTV because the schedules highlight three identical programs aired on both stations on the same day. Cablevision argues that the only other programming schedule submitted by Paxson is not dated. Cablevision further argues that this schedule for WHRC only identifies blocks of air time labeled "Paxnet," "Praise TV," and "Children's Programming." 10. Cablevision also disputes that the instant case is controlled by Jovan Broadcasting, Corp., a decision in which it states the Commission held that two unaffiliated, independently owned TV stations that chose to affiliate with two different home shopping networks owned by the same corporate parent were both entitled to carriage. Cablevision argues that unlike Jovan Broadcasting, Corp., the two stations involved are themselves affiliated with the same corporate parent and the stations do not exercise distinct and independent program format decisions. 11. Paxson responds in its supplemental pleading that the manner in which it obtains programming for its stations is completely consistent with Commission rules. Paxson explains that it secures programming for some of its stations by selling producers of long-form advertising airtime on the inTV Network. Paxson then states that stations broadcasting inTV programming block out a fixed number of hours each day for what it terms "inTV time," during which the stations all broadcast the same programming from pre-recorded videotapes. Paxson states that WGOT-TV obtains programming from inTV and allocates a portion of its broadcast day to that programming. The remainder of WGOT-TV's programming, according to Paxson, is devoted to local programming and long-form advertising which is broadcast during airtime purchased on WGOT-TV rather than on all stations airing inTV programming. 12. Paxson also states that it secures programming for other stations, including WHRC, by selling producers of "direct response" long-form advertising airtime on Paxnet, which it maintains is separate and distinct from inTV. Paxson states that those stations receiving Paxnet programming are not obligated to coordinate with other stations or to reserve a fixed number of hours each day for Paxnet programming. Most importantly, Paxson states that because Paxnet programming is run by stations not carrying inTV programming, Paxnet programming generally attracts different programming than inTV, i.e., producers of long form advertising find value in purchasing airtime that is less expensive than inTV time but reaches a different, smaller group of stations than inTV. Paxson also notes that in addition to airing Paxnet programming, WHRC allocates airtime for the broadcast of local programming and long form advertising purchased specifically for broadcast on WHRC. 13. In its opposition to Paxson's supplemental pleading, Cablevision argues that even if WHRC's programming is now different, allowing PCC to alter the programming on its stations after the date on which Cablevision was required to respond to its must carry requests would be contrary to administrative due process. Finally, Cablevision argues that even if Paxnet is now, or becomes in the future, a separate network from inTV, this does not change the fact the programming decisions at both stations are still controlled by the same source -- Paxson's corporate parent, PCC. According to Cablevision, such common control of programming makes this a case of first impression under the Commission's "dual network" policy. DISCUSSION 14. Based on the record before us, we conclude that WGOT-TV satisfies the definition of a "qualified local commercial television station" under the Commission's must carry rules. We also disagree with Cablevision that Paxson's complaint should be dismissed as procedurally defective because the complaint was filed prematurely in violation of our rules. Pursuant to Section 76.61(a)(2) of our rules, Cablevision did not respond to Paxson's request for carriage of WGOT-TV within the requisite 30 day time period in order to notify Paxson that it would commence carriage of its station or state the reasons for its refusal to carry the station. Conversations between the parties regarding signal quality and a follow-up letter sent by Paxson regarding signal quality tests are irrelevant to the instant proceeding, especially in light of the fact that poor signal quality is not the reason Cablevision is refusing to carry the signal of WGOT-TV. Paxson was not in error to file the subject must carry complaint in order to preserve its rights. 15. We also disagree with Cablevision that WGOT-TV is not entitled to carriage on its Boston system because it is a duplicative network signal. Section 76.56(b)(5) of our rules states, in pertinent part: A cable operator is not required to carry the signal of any local commercial television station that substantially duplicates the signal of another local commercial television station that is carried on its cable system, or to carry the signals of more than one local commercial television station affiliated with a particular broadcast network, as defined in 76.55(f). However, if a cable operator declines to carry duplicating signals, such cable operator shall carry the station whose community of license reference point, as defined in 76.53, is closest to the principal headend of the cable system. For purposes of this paragraph, substantially duplicates means that a station regularly simultaneously broadcasts the identical programming as another station for more than 50 percent of the broadcast week. 16. Cablevision has not met its burden with regard to demonstrating that WGOT-TV and WHRC are affiliates of a common network, or that one station substantially duplicates the signal of the other station. While the Commission has previously determined that inTV is a television network for must carry purposes, Cablevision has not shown that the two stations in question are both affiliates of that particular broadcast network as defined by Section 76.55(f) of our rules. Here, WGOT-TV and WHRC, both independently owned stations, receive programming not from the same programming source, but from two separate and distinct entities --inTV and Paxnet, respectively -- which are both owned by the same corporate parent. Paxson has sufficiently demonstrated that both business entities, while owned by the same corporate parent, provide different programming and utilize different distribution methods. In addition to not meeting its burden with regard to network affiliation, Cablevision has not shown that the stations duplicate each other's signals by simultaneously broadcasting identical programming for more than 50 percent of the broadcast week. 17. Finally, we do not agree that Cablevision has been denied administrative due process because it was required to make a carriage decision regarding WGOT-TV based on facts that subsequently changed. In this proceeding, Cablevision has been accorded every opportunity to present its objections to the carriage of WGOT-TV based on current facts and we have considered all of the relevant information presented. ORDERING CLAUSES 18. Accordingly, IT IS ORDERED, pursuant to Section 614 of the Communications Act of 1934, as amended, (47 U.S.C. 534), that the petition filed by Paxson Boston License, Inc. IS GRANTED. Cablevision of Boston, L.P. IS ORDERED to commence carriage of television station WGOT-TV, Merrimack, NH, within sixty (60) days from the release date of this Order on its Boston cable system. 19. This action is taken pursuant to authority delegated under 0.321 of the Commission's Rules. FEDERAL COMMUNICATIONS COMMISSION Gary M. Laden, Chief Consumer Protection and Competition Division Cable Services Bureau