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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 re Complaints of ) CSR-4495-M Costa De Oro Television, Inc. ) CSR 4505-M ) CSR-4513-M Requests for Cable Television Carriage ) ) MEMORANDUM OPINION AND ORDER Adopted: December 11, 1997 Released: December 17, 1997 By the Commission: INTRODUCTION 1. The Commission has before it an application for reconsideration of the decision in Costa De Oro Television, 10 FCC Rcd 9468 (Cable Services Bur., 1995), filed by Costa De Oro Television, Inc., permittee of station KSTV-TV (channel 57), Ventura, California (KSTV-TV). Petitioner is seeking reconsideration of the Cable Services Bureau's denial of must carry complaints filed by KSTV-TV against Continental Cablevision, Cencom Cable Television, Inc. d/b/a Charter Communications, and Century Southwest Cable Television, Inc., all of which operate cable television systems in Los Angeles County, California (collectively the cable operators). The Bureau dismissed KSTV-TV's complaints after determining that KSTV-TV was not entitled to carriage on the cable operators' Los Angeles cable systems because under Arbitron's l991-l992 Television ADI Market Guide (ADI Market Guide), KSTV-TV was not considered a "local station" entitled to must carry rights in the Los Angeles Area of Dominant Influence (ADI). KSTV's petition is opposed in a joint filing by the cable operators involved. KSTV-TV has filed a reply. 2. 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. Generally, a station is considered local in the ADI to which it is assigned by the ADI Market Guide, and thereby entitled to carriage rights on cable television systems located in that ADI. However, there are certain instances where a station is assigned to an ADI other than the one in which the station's community of license is physically located. In this circumstance, the station may assert signal carriage rights in its county of license and in the ADI to which it has been assigned by Arbitron. This has become known as the Commission's "home county" exception to the standard ADI designation. In its decision, the Cable Services Bureau ruled that Arbitron had assigned KSTV-TV to the Santa Barbara-Santa Maria- San Luis Obispo ADI (Santa Barbara ADI). Consequently, the Bureau found that KSTV-TV had must carry rights in its "home county" of Ventura, along with the communities located in the Santa Barbara ADI to which it was assigned but did not otherwise have such rights in the Los Angeles ADI of which Ventura is a part. ARGUMENTS OF THE PARTIES 3. KSTV-TV contends that in determining that the station was assigned to the Santa Barbara ADI and not to the Los Angeles ADI, the Bureau failed to correctly weigh the evidence that KSTV-TV presented. Petitioner argues that the Bureau's decision is not supported by the terms of the Cable Television Consumer Protection and Competition Act of l992 nor by the Commission's rules. In support of its contentions, KSTV-TV offers letters from Arbitron which it contends confirm that the station is located within the Los Angeles ADI. KSTV-TV notes that the Arbitron letters also mention that "KSTV chose to be reported in the Santa Barbara-Santa Maria-San Luis Obispo market," but petitioner contends that the station did not request such a reporting, nor could petitioner find any documentation in its files to that effect. 4. KSTV-TV states that as an independent foreign-language broadcaster, it has no interest in the Santa Barbara market, and that its programming is geared to the Los Angeles market. Petitioner contends that the Bureau has failed to consider the practical implications of its decision. KSTV-TV argues that it will need to increase its viewership and ratings in order to be reported in the Nielsen ratings book for Los Angeles, and that this will not be possible without cable carriage in the Los Angeles market. Arbitron no longer issues audience measurement data for television. Nielsen Media Research (Nielsen), the current service for measuring such data, considers the station to be located in the Los Angeles market and provides ratings information for the station based on it being part of the Los Angeles and not the Santa Barbara market. 5. In their opposition, the cable operators state that KSTV-TV was assigned to the Santa Barbara ADI in both the l991-l992 and the l992-l993 Television ADI Market Guides, and that such placement for two consecutive years is not based on an error. In addition, the fact that Nielsen assigned KSTV-TV to the Los Angeles market does not negate Arbitron's previous assignment of the station to the Santa Barbara ADI. The cable operators contend that the station consistently has focused its service solely on Ventura County and the Santa Barbara market and not Los Angeles. In support, the operators contend that KSTV's Annual Ownership report, filed with the Commission on June 21, l994, lists four low power television stations licensed to Costa De Oro, three located in the Santa Barbara ADI, and one in northern Ventura County. The operators contend that these broadcast interests throughout the Santa Barbara market undercut petitioner's position regarding the Santa Barbara market. The cable operators further note that KSTV-TV's application, filed with the Commission on January 3, l994, seeks to extend its then construction permit. The operators contend that KSTV-TV is clear in that application regarding its intent to serve Ventura County, and that petitioner does not make any reference to an attempt or desire to serve Los Angeles. 6. The cable operators argue that KSTV-TV began operation with significantly reduced power in l990, prior to the inception of the current must carry rules, and therefore could not have had any reasonable expectation of viewers in the Los Angeles area or carriage on Los Angeles cable systems. The operators state that it is clear that the station has operated for more than five years as a foreign- language station without any Los Angeles cable carriage or expectation of carriage, and conclude that the station's choice to operate as a foreign-language station cannot have been based upon any assumption of cable carriage in the Los Angeles area. Accordingly, the cable operators state that the Commission's decision in this matter not only reflects existing law, with reference to Arbitron's ADI Market Guide, but also reflects market realities. 7. In its reply, KSTV-TV argues that Arbitron had never undertaken any research or established a factual basis for the "assignment" of KSTV-TV to the Santa Barbara ADI. KSTV-TV states that its ownership of three low power stations in the Santa Barbara ADI is not relevant to the issue of its orientation to a particular market. Additionally, petitioner states that its station SK44DT is in the Los Angeles ADI, and that it plans on relocating the facility to the San Fernando Valley in Los Angeles County. KSTV-TV also states that it is planning on relocating its full power station to a location closer to Los Angeles County, with the intent to provide increased service to the Los Angeles ADI. Petitioner reiterates its claim that the Bureau's decision is wrong and that it will cause the station grave economic harm. 8. In supplements to its petition, KSTV-TV informs the Commission that it has changed its format to English-language broadcasts. The station states that because of the Bureau's decision, and the subsequent lack of carriage on Los Angeles area cable systems, it no longer can economically justify continuing as a foreign-language broadcaster. The station also states that it has received confirmation that Arbitron has no documentation that KSTV-TV ever requested that the station be reported in any ADI other than the Los Angeles ADI. KSTV-TV contends that it never made such a request, and concludes that these facts are central to its argument that the Bureau erred in finding that the station is not entitled to must carry status on cable television systems in the Los Angeles ADI. Petitioner submits a declaration from a former Arbitron employee, who states that a "special notice" is included in separate Arbitron publications, the Television Market Reports for February l991 through November l993 for the Santa Barbara ADI. This notice states that KSTV-TV is located in the Los Angeles ADI and that the station has "chosen to be reported" in the Santa Barbara market "for reporting purposes only." The declaration notes that since Arbitron has not retained its television files since closing its television service, it is "unable to locate any documentation in connection with the reporting of KSTV-TV to the [Santa Barbara] market for the 1991-1992 Arbitron ADI Market Guide." In addition, KSTV-TV contends that Section 301(d) of the Telecommunications Act of l996, which amends Section 614(h)(1)(C) of the Communications Act of l934, as amended, directs the Commission to adopt, where available, a "viewing patterns" based system for determining a television station's market. Petitioner argues that adoption of current Nielsen publications would establish that the station be included in the Los Angeles ADI. 9. In oppositions to KSTV-TV's supplements, the cable operators state that the station's claim that it has dropped its foreign-language format for lack of carriage is "disingenuous," since the station was never entitled to carriage. The operators also emphasize that the Commission cannot mandate program formats, and cannot base any cable carriage decisions on such formats. In regards to KSTV-TV's contention concerning its placement in Arbitron, the cable operators argue that the declaration submitted does not state that the station's placement in the Santa Barbara market was incorrect, but only that Arbitron cannot "locate any documentation" relating to that placement. The operators conclude that since Arbitron is no longer in the business of placing stations in television markets, the only evidence that currently can be found supporting KSTV-TV's market placement is in the ADI Market Guide. The operators also contend that the record shows that the station did not question its market placement until February, l995, after it realized that its placement in the Santa Barbara ADI would adversely affect its ability to obtain cable carriage in the Los Angeles area. Finally, the operators dispute KSTV-TV's interpretation regarding the amendment of Section 614(h)(1)(C) of the Communications Act, arguing that nothing in the statute requires the Commission to use Nielsen rather than Arbitron to determine a station's market, nor has the Commission determined that it should or will use Nielsen in lieu of Arbitron for this purpose. In any event, the operators continue, any change made by the Commission to this effect would not be effective until the next must carry election and that KSTV- TV's argument on this point is irrelevant insofar as this proceeding is concerned. ANALYSIS AND DECISION 10. Having reviewed the arguments set forth in its petition, we conclude that the arguments presented by KSTV-TV were addressed and properly resolved by the Bureau in the first instance. Accordingly, we affirm the Bureau's decision and deny the petition. In this proceeding, as in the Bureau's earlier order, the crucial question presented is to what extent a station is entitled to carriage in the ADI in which its community of license is located when it is assigned to a different ADI in the Arbitron l991-92 Television ADI Market Guide. As the Bureau stated in its order: KSTV-TV is not entitled to carriage on the cable operators' Los Angeles cable systems because the 1991-1992 Television ADI Market Guide, the controlling text in market designations, assigned the station to the Santa Barbara-Santa Maria-San Luis Obispo ADI and not to the Los Angeles ADI. KSTV-TV therefore is not a "local station" under the Commission's definition of the term since it is not within the same television market with respect to the Los Angeles cable systems.*/ . . . Under Section 76.55(e)(3), the relevant rule provision, stations are entitled to treat "the county in which a station's community of license is located" as within its market regardless of the ADI to which the station is assigned. If KSTV-TV were correct in its reading of the rules, the "home county" exception would have been completely unnecessary. In the present case, the "home county" provision affords KSTV-TV must carry rights in Ventura County along with the communities located in the Santa Barbara ADI but not in the Los Angeles ADI. ______________________ */ See 47 C.F.R. 76.55(c). 11. We do not believe that petitioner has presented any new argument or evidence upon which to reverse the Bureau's decision. We do not agree with petitioner's contention that correspondence from Arbitron establishes a basis for determining that KSTV-TV should be assigned to the Los Angeles ADI. Section 76.55(e) of the Commission's rules, provides that: (1) Until January 1, 2000, a commercial broadcast television station's market, unless amended pursuant to 76.59, shall be defined as its Area of Dominant influence (ADI) as determined by Arbitron and published in the Arbitron 1991- 1992 Television ADI Market Guide . . . . There is basically no disagreement that the system operators relied on the correct ADI market guide and that the guide in question assigned KSTV-TV to the Santa Barbara rather than the Los Angeles ADI. Parties are entitled to rely on this information as is provided for by the rules. 12. As to the issue of whether Arbitron erred in including a "special notice" in its Television Market Reports (assuming its relevance), we believe that the evidence submitted does not suggest that the assignment was improper or erroneous. Petitioner contends that it never requested the assignment and that Arbitron cannot find any evidence to that effect. It then concludes that since there is no record of such a request, the assignment to the Los Angeles ADI was made in error. We find, however, no basis for assuming that the absence of information as to a specific request suggests an error. In this regard, the station's January 3, 1994 application to extend its construction permit and its three commonly owned low power stations in the Santa Barbara market demonstrate a specific connection to the Santa Barbara market and the station had not shown that it provided service to the Los Angeles market outside of Ventura County to any appreciable extent. We note also, in this regard, that there is another station licensed to Ventura County (KADY-TV, Oxnard) which was also assigned by Arbitron to the Santa Barbara market. Arbitron has not conceded any error or irregularity in the process but has merely stated that because it has shut down its television service it "has not retained any of the files requested by Costa de Oro." The issue of which market a station is assigned to, a matter that is of critical importance to the broadcasting community, is not something that would be easily overlooked or ignored. Finally, to the extent KSTV-TV believed an error was made by Arbitron, it was not without recourse. Section 614(h) of the Communications Act contains a specific mechanism for revising Arbitron ADI assignments for Commission purposes where the propriety of a station's television market is called into question. KSTV-TV has not sought market redefinition under Section 614(h). 13. We also do not agree with petitioner's argument that the Commission must use Nielsen's DMA publications to establish KSTV-TV's market area, based on petitioner's interpretation of the Telecommunications Act of l996. Although the Commission has concluded that DMA publications are ultimately preferable, we have also concluded not to use them until the next must carry election cycle in order to permit consideration of transitional procedures to minimize any burdens, costs, or disruptions that might be caused by the shift in market designation standards. In the interim, market modifications determined pursuant to Section 614(h) would be used to refine market boundaries. Our Report and Order and Further Notice of Proposed Rulemaking, which amended Section 76.55(e), states: We find nothing in the revised statutory language defining a local market nor in the associated legislative history that would require the Commission to substitute DMAs for ADIs. [footnote omitted] The revised language simply directs the Commission to use a commercially available publication. We conclude that the existing ADI list meets this test. The DMA market listings or any other widely available commercially published source also could satisfy this requirement. Accordingly, we conclude that our decision to continue to use Arbitron's ADIs for the 1996 election and adopt Nielsen's DMAs for future election cycles is fully consistent with the requirements of the Act. This Report and Order also specifically recognized the continued validity of the "home county" exception to "ensure that a station is carried in its home county in the limited instances where the station is assigned to a market that does not include its home county." 14. Finally, we do not believe arguments regarding the type of programming the station has chosen to broadcast to be relevant to this proceeding. Consequently, as our rules provide, we shall rely upon Arbitron's l991-l992 Television ADI Market Guide to determine a station's assignment to its ADI, which, in the instant matter, places KSTV-TV in the Santa Barbara ADI. ORDERING CLAUSES 15. Accordingly, IT IS ORDERED, that the captioned petition for reconsideration IS DENIED. 16. This action is taken pursuant to statutory authority found in Sections 1, 4(i), 5(c), 405, 614(a), and 614(h)(1)(C) of the Communications Act of 1934, as amended, 47 U.S.C.  151, 154(i), 155(c), 405, 534(a), and 534(h)(1)(C). FEDERAL COMMUNICATIONS COMMISSION Magalie Roman Salas Secretary