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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: ) ) Cable Satellite of South Miami, Inc. ) CSR-5121-A ) For Modification of the Miami-Ft. ) Lauderdale, Florida ADI ) ) Complaint of Hispanic Keys Broad- ) CSR-5080-M casting Corp. ) ) Request for Carriage ) MEMORANDUM OPINION AND ORDER Adopted: January 6, 1998 Released: January 9, 1998 By the Deputy Chief, Cable Services Bureau: INTRODUCTION 1. Cable Satellite of South Miami, Inc. ("Cable Satellite"), filed the above-captioned petition seeking to modify the Miami-Ft. Lauderdale, Florida Area of Dominant Influence ("Miami ADI") of Station WWFD-TV (Channel 8), Key West, Florida. Specifically, Cable Satellite requests that WWFD- TV be excluded from the Miami ADI relative to the community of South Miami, Florida, and the adjacent unincorporated areas of Dade County, Florida, for the purposes of the cable television mandatory broadcast signal carriage rules. WWFD-TV has filed an opposition to this petition to which Cable Satellite has replied. In a separate but related proceeding, WWFD-TV filed a must carry complaint against Cable Satellite for carriage on the operator's South Miami cable system. We will jointly consider these cases to resolve the signal carriage rights of WWFD-TV on Cable Satellite's cable system. BACKGROUND 2. Pursuant to 614 of the Communications Act and implementing rules adopted by the Commission in its Report and Order in MM Docket 92-259, a commercial television broadcast station is 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 in 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 demon- strated 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. As for deletions of communities from a station's market, the legislative history of this provision indicates that: The provisions of [this subsection] reflect a recognition that the Commission may conclude that a community within a station's ADI may be so far removed from the station that it cannot be deemed part of the station's market. It is not the Committee's intention that these provisions be used by cable systems to manipulate their carriage obligations to avoid compliance with the objectives of this section. Further, this section is not intended to permit a cable system to discriminate among several stations licensed to the same community. Unless a cable system can point to particularized evidence that its community is not part of one station's market, it should not be permitted to single out individual stations serving the same area and request that the cable system's community be deleted from the station's television market. 7. In adopting rules to implement this provision, the Commission indicated that changes requested 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 Act, that a station not be deleted from carriage during the pendency of an ADI change request. MODIFICATION ARGUMENTS 8. Cable Satellite's system is located in Dade County, Florida and is part of the Miami-Ft. Lauderdale, Florida ADI. Key West, the city of license of WWFD-TV is also part of the same ADI and is approximately 125 miles from the cable system's headend. 9. In support of its modification request, Cable Satellite argues that WWFD-TV should be excluded from carriage on its system because the station does not satisfy any of the four statutory market modification factors. First, the station has no record of historic carriage. Cable Satellite states that since it has never carried the station, there would be no disruption of established viewing patterns nor would the station be deprived of any existing audience. Secondly, Cable Satellite maintains that WWFD-TV does not provide local coverage for its system due to the following: a) WWFD-TV is geographically remote; Cable Satellite's cable system is in the northeastern part of the Miami ADI while WWFD-TV is in the southwestern most tip; b) WWFD-TV's Grade B contour is more than 100 miles from Dade County, and more than 125 miles from Cable Satellite's headend site, and c) WWFD-TV does not carry any programming providing "local coverage" of the system's communities. Third, Cable Satellite asserts that local programming is already being provided by the Miami market stations it currently carries, all of which provide local news, sports and community programming. Finally, Cable Satellite argues that the station has no audience in Dade County. The fact that the station's viewership is too low to be reported is buttressed by its absence in the listings of The Miami Herald, a local newspaper. In addition, Cable Satellite points to multiple decisions in which the Cable Bureau granted exclusion of WWFD-TV in situations where the individual cable communities involved were even closer to Key West than the communities herein. In conclusion, Cable Satellite requests that it be relieved of its obligation to carry WWFD-TV on its system. 10. In opposition, WWFD-TV states that pursuant to the Cable Television Consumer Protection and Competition Act of 1992 and the Commission's Report and Order, supra, it is entitled to assert mandatory carriage rights on every cable system located within the Miami ADI. Also, Section 614 of the Act creates an affirmative duty for every cable operator in an ADI to carry the signals of the local commercial television stations in its market. Stations such as WWFD-TV, it continues, represent precisely the kind of station Congress intended to have must carry rights. While modification of ADI markets are allowed, WWFD-TV argues that there is a heavy burden of proof on petitioners who move to exclude communities from a station's market. In the instant case, WWFD-TV maintains that Cable Satellite has not met this burden. WWFD-TV states that it provides a valuable program service which caters specifically to the communities served by Cable Satellite. It points out programming such as "This Morning in South Florida," which covers events in Dade County as well as the entire ADI, and coverage of local news, weather and sports (professional, college and high school). WWFD-TV maintains that Cable Satellite's attempts to limit must carry rights to specific coverage areas is misplaced given that Congress adopted an economic market approach, as designated by the ADI, rather than using distance or Grade B coverage to determine carriage rights. In addition, WWFD-TV argues that its station can scarcely have ratings or carriage history since it only began service in May, 1996. In any event, it maintains, the Commission has held that low ratings and lack of historic carriage are of limited relevance in petitions seeking exclusion. While WWFD-TV admits that it does not provide Grade B service to the system's community, it states that the Commission has specified that Grade B contours are "not to be used as any absolute measure of the scope of a station's market." Further, the carriage of other local stations by Cable Satellite does not lessen the community's need of WWFD-TV's programming or obviate Cable Satellite's statutory obligations. Finally, WWFD-TV maintains that geographical remoteness is not a recognized basis for modification and is an argument that is undercut by the fact that WWFD-TV is currently carried on cable systems throughout the ADI with communities which are equally distant to those of Cable Satellite's system. WWFD-TV concludes, therefore, that Cable Satellite's petition should be denied. 11. In reply, Cable Satellite states that WWFD-TV offers little evidence to counter its petition's arguments. Cable Satellite states that WWFD-TV ignores the legislative history with regard to the market modification provisions which "reflect a recognition that . . . a community within a station's ADI may be so far removed from the station that it cannot be deemed part of the station's market." Cable Satellite states that the Commission has specifically rejected WWFD-TV's argument that requires a petitioner to show that a "local" station would have to be dropped if the market modification is not granted. Cable Satellite re-states that WWFD-TV fares poorly under the four statutory criteria, the primary reason being that the station fails to establish any nexus with the communities served by the system. Cable Satellite states that the programming examples offered by WWFD-TV to establish a local nexus are general in nature and lack details to indicate that they specifically target Cable Satellite's system communities. Indeed, it maintains, WWFD-TV's arguments in this regard only serve to highlight its misunderstanding of the underlying goals of the must carry rules where the relevant question is not whether programming is of general interest, but whether it covers local matters. Cable Satellite points out that in Time Warner Cable, the Commission found that anecdotal evidence of programming insufficient to satisfy the local coverage factor in situations where the station otherwise failed to meet any of the other statutory factors. Finally, Cable Satellite concludes that WWFD-TV's carriage on other cable systems within the ADI says nothing about the station's coverage of the specific communities herein. MUST CARRY ARGUMENTS 12. WWFD-TV's must carry complaint requests that the Commission order the Cable Satellite system to carry its signal for the following reasons: a) Its complaint was timely filed. WWFD-TV states that it requested carriage on Cable Satellite's cable system by letter dated July 1, 1997. Cable Satellite failed to respond to this letter and WWFD-TV states that it filed its complaint within 60 days of Cable Satellite's failure to respond. b) As a commercial television station operating within the same ADI market as Cable Satellite's system, WWFD-TV is entitled to carriage pursuant to Section 614 of the Communications Act and the Commission's Rules. c) WWFD-TV has fully complied with all of the requirements for mandatory carriage of its signal on the system -- Cable Satellite's system is devoting less than one-third of its channel capacities to mandatory signal carriage, WWFD-TV will deliver a good quality signal to the cable system's principal headend via fiber optic cable, and no other currently-carried television stations substantially duplicates its programming. 13. In its opposition, Cable Satellite states that although as early as 1996 it discussed with WWFD-TV the possibility of the station's carriage, it advised WWFD-TV at the time that its signal was not available at the system's headend. Despite this fact, Cable Satellite states that WWFD-TV requested carriage on its system in a letter dated September 27, 1996. In a response dated October 3, 1996, Cable Satellite states that it informed WWFD-TV that while it was impossible to receive the station's signal at the headend, it was willing for its system engineer to discuss whether carriage of the station would be possible in the future. Other than an acknowledgement via telephone by WWFD-TV to the cable system's engineer that the station's signal was not available at the system headend, Cable Satellite indicates that no further action took place until WWFD-TV submitted a second, redundant, request for carriage on July 1, 1997. Cable Satellite states that on August 26, 1997, it conducted a signal strength survey which yielded no perceptible signal from WWFD-TV at the cable system's headend. Moreover, Cable Satellite argues that WWFD-TV's claim that its signal is available via fiber optic cable is false and a misrepresentation of the facts. Indeed, Cable Satellite states that there is no fiber optic or other medium by which it can receive WWFD-TV's signal at its headend. 14. Cable Satellite argues further that WWFD-TV's complaint is untimely. Since the circumstances regarding receipt of WWFD-TV's signal did not change from the receipt of the station's first must carry request in September 1996, Cable Satellite maintains that WWFD-TV would only have been entitled to file a must carry complaint within sixty days of the original October 3, 1996 refusal of carriage. Cable Satellite states that WWFD-TV cannot contrive to create a new triggering date for the filing of a complaint simply by submitting a second request for carriage to the cable system. Finally, Cable Satellite argues that WWFD-TV showed bad faith in filing its complaint since it was aware that the Commission had specifically deleted WWFD-TV from the Miami-area ADI on at least two previous occasions due to the recognition that WWFD-TV failed to satisfy any of the four factors for inclusion in the market. As a result, Cable Satellite maintains that WWFD-TV's complaint should be dismissed. 15. In reply, WWFD-TV states that Cable Satellite's premise that WWFD-TV fails to provide a good quality signal and that its complaint is untimely are both incorrect. WWFD-TV points out that while it admits that, at this time, it does not provide a good quality signal to Cable Satellite's principal headend, it is fully capable of doing so. It indicates that it currently provides a good quality signal, via fiber optic cable, to a nearby TCI cable system and is fully prepared to extend that cable to include Cable Satellite's system. WWFD-TV states that the use of fiber optic cable has been specifically authorized by the Commission for the purposes of delivery of a good quality signal to cable headends. WWFD-TV argues that its commitment to provide and install the necessary equipment to deliver a good quality signal to Cable Satellite's headend full satisfies its criteria for carriage. With regard to the timeliness of its complaint, WWFD-TV states that its September 27, 1996 was merely an election of must carry status over that of retransmission consent prior to the October 1, 1996 deadline and was not a request for carriage. Moreover, as Cable Satellite's October 3rd letter invited further negotiations, WWFD-TV argues that it cannot be construed as an outright denial of carriage. 16. In a separate, related pleading, Cable Satellite alleges that WWFD-TV violated Sections 1.17 and 76.7 of the Rules in connection with the filing of its must carry complaint and requests that a forfeiture be issued against the station. Cable Satellite points that in its August 20, 1997 must carry complaint, WWFD-TV states that it ". . . delivers a good quality signal to [Cable Satellite's] principal headend via fiber optic cable which meets or supersedes the Commission's signal strength requirement." However, in a subsequent September 2, 1997 letter from WWFD-TV's counsel to the cable system, Cable Satellite indicates that it was advised that ". . . Station WWFD-TV . . . intends to deliver a broadcast quality signal at the [Cable Satellite] headend by fiber on or before November 1, 1997." Cable Satellite argues that not only does the September 2nd statement verify the obviously false allegation made in WWFD-TV's complaint, but WWFD-TV's failure to file this letter as a supplement to its complaint was a "willful material omission" in violation of Sections 1.17 of the Commission's Rules and Section 312(a)(4) of the Act. Moreover, this omission violated Section 76.7 of the Rules which requires that the petitioner ". . . is responsible for the continuing accuracy and completeness of all information in such document." As a result, Cable Satellite maintains that the Commission should institute forfeiture proceedings against WWFD-TV, including a revocation of its construction permit and/or any license granted pursuant thereto. DISCUSSION 17. We will grant Cable Satellite's modification request. Based on geography and other relevant information, we believe that the cable system herein is sufficiently removed from WWFD-TV that its community ought not be deemed part of the station's market for mandatory carriage purposes. 18. As an initial matter, we note that, according to the legislative history of the 1992 Cable Act, the use of ADI market areas is intended "to ensure that television stations be carried in the areas which they service and which form their economic market." Changes may be sought and granted by the Commission "to better effectuate the purposes" of the mandatory carriage requirements. The market change process incorporated into the Communications Act, however, is not intended to be a process whereby cable operators may seek relief from the mandatory signal carriage obligations apart from the question of whether a change in the market area involved is warranted. When viewed against this backdrop, and considering all of the relevant factual circumstances in the record, we believe that Cable Satellite's deletion petition appears to be a legitimate request to redraw ADI boundaries to make them congruous with market realities. Cable Satellite's actions do not reflect an intention to skirt its signal carriage responsibilities under the 1992 Cable Act and the Commission's Rules, nor do they evidence a pattern of discriminatory conduct against the station. 19. The task in this proceeding is how to reflect the statutory factors in our decision while at the same time recognizing the difficulties of applying these factors to stations of recent origin or more specialized formats. A decision based strictly on the four statutory modification factors -- historical carriage, service, other stations' presence, and audience data -- would simply exclude Cable Satellite's community from WWFD-TV's market. However, even taking into account the difficulties of applying these factors to new stations and those with specialized formats, there is no supporting evidence demonstrating that Cable Satellite's communities warrant inclusion. The fact that a station is new or of specialized appeal does not mean that its logical market area is without limits or that it should be exempt from the Section 614(h) market modification process. Given the difficulty of direct reliance on the statutory factors (which demonstrate only limited connections between the cable communities and WWFD-TV), we focus here more heavily on basic geographic and technical features, mileage and Grade B contour, that provide the best available alternative evidence of the market boundaries of the station subject to deletion here. 20. WWFD-TV, which signed on-the-air in May 1996, now apparently broadcasts English- language syndicated programming. The station's city of license is Key West, Florida. As a new station, it lacks measured audience (cable and non-cable) and historic carriage in South Miami and surrounding Dade County, the cable communities that Cable Satellite has requested be deleted. These communities are outside of WWFD-TV's Grade B contour. The communities served by Cable Satellite's system are also more than 125 miles outside of WWFD-TV's predicted Grade B contour. While the programming offered by WWFD-TV can be considered to be of general interest to the ADI as a whole, neither it nor the locally-produced programming WWFD-TV cites in its opposition, can be considered to be specifically relevant to the instant communities. It is also generally undisputed that the South Miami area receives an abundance of local news, sports, and public affairs broadcasts from other closer stations. Moreover, although WWFD-TV claims carriage in several cable systems throughout the ADI with communities farther in distance than South Miami, we are unable to verify either the carriage or the specific distances involved as WWFD-TV failed to provide the relevant cable communities and their locations. 21. Nevertheless, we are aware that as a newer station, WWFD-TV has not had the opportunity to build a record of historical carriage. While some stations fail the historic carriage criteria for specific reasons which do not necessarily reflect a judgment as to the geography of the market involved, we cannot overlook the fact that, in this instance, geographic distance plays a major role. As such, the evidence relating to this statutory factor does weigh in favor of excluding Cable Satellite's cable system community from WWFD-TV's market but is not outcome determinative by itself. With regard to viewership, we recognize that again, as a newer station, WWFD-TV has not had as much time as other stations to build an audience. Indeed, stations can take up to three years to establish their viewing patterns. Congress could not have intended for such stations to have cable communities deleted from their market solely because their audience shares are not as significant as those of several other stations with which they compete. If this were the case, the 1992 Cable Act would have designated a ratings mechanism, rather than ADIs, as the primary determinant for broadcast signal carriage. 22. Given the evidence as to the statutory factors, the obvious lack of evidence concerning technical service to the communities in question, and the lack of specific programming service to these communities, we conclude that it is logical and consistent with the objective of Section 614 of the Communications Act to delete Cable Satellite's system from the WWFD-TV market for mandatory carriage purposes. 23. With regard to the issue of the timeliness of WWFD-TV's must carry complaint, we do not agree with Cable Satellite that the station's September 27, 1996 letter constituted a request for carriage. Upon review it appears to be a letter notifying Cable Satellite of WWFD-TV's election of must carry status in lieu of retransmission consent, pursuant to Section 76.64(f)(2) of the Commission's Rules. ORDERING CLAUSES 24. Accordingly, IT IS ORDERED, pursuant to 614(h) of the Communications Act of 1934, as amended, 47 U.S.C. 534, and 76.59 of the Commission's Rules, 47 C.F.R. 76.59, that the petition for special relief (CSR-5121-A) filed on behalf of Cable Satellite of South Miami, Inc. IS GRANTED. 25. IT IS FURTHER ORDERED, that WWFD-TV's complaint filed August 20, 1997, (CSR-5080-M) against the above-listed cable system IS DISMISSED as moot. 26. This action is taken pursuant to authority delegated by 0.321 of the Commission's Rules, 47 C.F.R. 0.321. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau