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Waiver Of The Network Nonduplication And Syndicated Exclusivity Rules

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Released: March 18, 2013

Federal Communications Commission

DA 13-455

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)

Barrington Kirksville Licensee LLC
)
KTVO, Kirksville, Missouri
)
CSR-8648-N
)
Docket No. 12-151
Petition For Waiver of Section 76.92(f)
)
of the Commission’s Rules
)

MEMORANDUM OPINION AND ORDER

Adopted: March 18, 2013

Released: March 18, 2013

By the Senior Deputy Chief, Policy Division Media Bureau:

I.

INTRODUCTION

1. Barrington Kirksville License, LLC, licensee of station KTVO-TV, Kirksville, Missouri
(“KTVO”), filed the above captioned petition1 seeking a waiver of the rules that preclude cable operators
from deleting the duplicate programming of “significantly viewed” stations under the network
nonduplication rules (“exclusivity rules”).2 KTVO is affiliated with the ABC broadcast television
network on its primary stream and with the CBS broadcast television network on its digital multicast
stream and the station serves the Ottumwa-Kirksville Designated Market Area (“DMA”).3 KTVO seeks
to enforce its exclusivity rights in Bloomfield, Iowa against KCCI-TV, a CBS affiliate licensed to Des
Moines, Iowa, and against KCRG-TV an ABC affiliate and KGAN a CBS affiliate in Fairfield, Iowa –
the latter two licensed to Cedar Rapids, Iowa.4 Oppositions to this petition have been filed on behalf of
Citizens Mutual Telephone Cooperative (“Citizens”), solely with respect to KCCI’s duplicative
programming in Bloomfield, and on behalf of the Local Internet Service Company, Inc. (“LISCO”) with
respect to KCRG and KGAN in Fairfield, and KTVO replied.5 As discussed below, we grant KTVO’s


1 Petition for Special Relief by KTVO filed May 31, 2012 (“Petition”).
2 47 C.F.R. §§ 76.92(f). Although not expressly requested in KTVO-TV’s petition for waiver of Section 76.92(f)
(significantly viewed exception to cable network nonduplication), the same showing – that a station is no longer
significantly viewed in the relevant community, would also apply to a waiver of Sections 76.122(j) (significantly
viewed exception to satellite network nonduplication) with respect to carriage on DBS systems. See 47 C.F.R. §§
76.92(f), 76.106(a), 76.122(j), and 76.123(k). See 47 U.S.C. §§ 340(a)(2) and 340(c).
3 Petition at 1 & 3.
4 Id. at 1-2
5 Opposition to Petition for Special Relief by Citizens, filed June 28, 2012 (Citizens Opp.); Opposition of LISCO to
Petition for Special Relief, filed July 9, 2012 (“LISCO Opp.”); see also Reply to Citizens Mutual Telephone
Cooperative’s Opposition to Petition for Special Relief, filed July 9, 2012 (“Reply to Citizens”); Reply to Opposition
of LISCO to Petition for Special Relief, filed July 19, 2012 (“Reply to LISCO”).

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DA 13-455

Petition.

II.

BACKGROUND

2. Upon the request of a local television station with exclusive rights to distribute a network or
syndicated program, a cable operator generally may not carry a duplicating program broadcast by a
distant station.6 Under Sections 76.92(f) and 76.106(a) of the Commission’s rules, however, a signal
otherwise subject to deletion is exempt from application of both the network nonduplication and
syndicated exclusivity rules if it is “significantly viewed” in a relevant community (the “significantly
viewed exception”).7 The significantly viewed exception to the exclusivity rules is based on a
demonstration that an otherwise distant station receives a “significant” level of over-the-air viewership in
a subject community. If this viewership level is met, the station is no longer considered distant for
purposes of the application of the network nonduplication rules because it has established that it is
viewed over the air in the subject community. A similar exception is provided in the syndicated
exclusivity rules.8
3. In order to obtain a waiver of Section 76.92(f), the Commission held in KCST-TV, Inc.9 that
petitioners would be required to demonstrate for two consecutive years that a station was no longer
significantly viewed, based either on community-specific or system-specific over-the-air viewing data,
following the methodology set forth in Section 76.54(b). Section 76.5(i) of the Commission’s rules
requires that for network stations to be considered significantly viewed, the survey results should exceed
a 3 percent share of total viewing hours and a net weekly circulation of 25 percent, by at least one
standard error.10 The Commission has found that this type of test is applicable as well for waivers of the
syndicated exclusivity exemption.11
4. Since the Commission’s decision in KCST-TV, the methodology required by Section 76.54(b)
of the rules has evolved pursuant to case law and market realities. Section 76.54(b) states in pertinent
part that significant viewing “may be demonstrated by an independent professional audience survey of
[over-the-air] television homes that covers at least two weekly periods separated by at least thirty (30)
days but no more than one of which shall be a week between the months of April and September.12 Over
time, The Nielsen Company (“Nielsen”) became the primary surveying organization through which a
petitioner could obtain television surveys. Nielsen, which routinely surveys television markets to obtain
television stations’ viewership, conducts four-week audience surveys four times a year (i.e., February,
May, July and November “sweep periods”). The Bureau has found that replacing each week required
under KCST-TV with a sweep period is acceptable and, if anything, adds to the accuracy of the audience
statistics because of the increased sample size.13 Accordingly, a petitioner may submit the results from


6 See 47 C.F.R. §76.92; 47 C.F.R. §76.101.
7 47 C.F.R. §76.92(f); see 47 C.F.R. §§76.5(i) and 76.54.
8 47 C.F.R. §76.106(a).
9 103 FCC 2d 407 (1986).
10 47 C.F.R. §76.5(i).
11 See Chambers Cable of Oregon, Inc., 5 FCC Rcd 5640 (1990).
12 47 C.F.R. § 76.54(b). The criteria set forth in KCST-TV require that two separate surveys be performed pursuant
to Section 76.54(b) in consecutive years. The provisions of Section 76.54(b) therefore apply to each year’s survey.
These types of surveys cannot be done by the affected television station, cable system or satellite operator.
13 Although, in general, petitioners are prohibited from using two surveys between April and September (i.e., May or
(continued…)
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DA 13-455

two sweep periods in each year. For use in exclusivity waivers, a petitioner may purchase survey data
from Nielsen on either a community-specific or system-specific basis.14 If a petitioner is purchasing
survey data on a system-specific basis where two or more communities are involved, the percent of
diaries from each community surveyed must be approximately the same as the percentage of the total
population for each community served by the cable system. 15 In order to produce the data required for
exclusivity waivers, Nielsen re-tabulates the over-the-air data that it collects for its routine audience
sweep periods, selecting in-tab diaries from its database from the area served by a cable system or an
individual cable community.16 It should be noted that, despite the fact that a petitioner is purchasing a re-
tabulation of data that has already been collected, it is still obligated to notify interested parties prior to
the purchase of such data, pursuant to the requirements set forth in Section 76.54(c) of the Commission’s
rules.17 Such notice should indicate the surveying organization, the methodology used to calculate the
viewing shares (e.g., a description of the process used to re-tabulate the information in an existing
database), the manner in which the communities (and/or zip codes) were selected, and the survey periods
used.18 Notification to interested parties before the purchase of Nielsen data allows a petitioner to correct
any errors or clarify issues related to the methodology before the data are purchased and the petition is
actually filed and, perhaps, avoid the filing of oppositions. Finally, we note that the manner in which
surveys based on sweep periods are averaged, remains the same as for weekly surveys.19 A petitioner


(…continued from previous page)
July sweeps), we have not ruled out a petitioner providing all sweeps in a year where more than two are submitted.
See WTNH Broadcasting, Inc. and K-W TV, Inc., 16 FCC Rcd 6781, 6784 (2001), where the Bureau did not reject
the petition because of the inclusion of both May and July data, but only concluded that, in such a case, it would be
necessary to provide individual survey period results so that we could determine the effect of the third and fourth
sweep periods.
14 It should be noted that Nielsen identifies individual communities by zip codes, a process not incompatible with the
surveying process discussed here.
15 47 C.F.R. § 76.54(b). Proportionality based on population demonstrates that more weight is given to larger
communities. While there must be at least one diary from each community in each survey, there is no minimum
sample size since the standard error allows us to be sure that there is a high probability that the reported result meets
or falls below our criteria. Because Nielsen is able to weight its sampling, they can provide such proportionality.
16 We expect petitioners who commission such data to include, along with the survey data itself, a description of the
procedures used to retabulate the data, which database it is using, what communities (or zip codes) are covered, the
station(s) surveyed, and time periods covered. Because Nielsen routinely provides this information in a cover letter
along with its survey data, it is most helpful if this letter is included. That way there is no doubt that the data
provided was obtained from Nielsen. See e.g., Radio Perry, Inc., 11 FCC Rcd 10564, 10568-9 (1996); Gulf-
California Broadcast Company,
21 FCC Rcd 3476, 3479-80 (2006). We further suggest that the petitioner make it
clear that the data they are submitting, along with the description of methodology, are as agreed on between the
petitioner and Nielsen.
17 47 C.F.R. § 76.54(c). Section 76.54(c) states that “[n]otice of a survey to be made pursuant to paragraph (b) of
this section shall be served on all licensees or permittees of television broadcast stations within whose predicted
Grade B contour the cable community or communities are located, in whole or in part, and on all other system
community units, franchisees, and franchise applicants in the cable community or communities at least 30 days prior
to the initial survey period.”
18 Id.
19 Section 76.54(b) states that “[i]f two surveys are taken, they shall include samples sufficient to assure that the
combined surveys result in an average figure at least one standard error above the required viewing levels. If surveys
are taken for more than 2-weekly periods in any 12 months, all such surveys must result in an average figure at least
one standard error above the required viewing level.”
3

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DA 13-455

may therefore submit the average of the two sweep periods for each year. If, however, a petitioner
submits more than two sweep periods, in addition to the average or combined audience shares for the
year, it must also include the separate sweep data for each individual sweep period used. This ensures
that the reported audience results data are not skewed by the choice of sweep periods.
5. As described above, KTVO seeks a waiver of KCCI, KCRG and KGAN’s significantly
viewed statuses which exempts these stations from KTVO’s network nonduplication and syndicated
exclusivity rights in two communities. As part of its waiver petition, KTVO argues KCCI is no longer
significantly viewed in the community of Bloomfield, Iowa, and that KCRG and KGAN are no longer
significantly viewed in Fairfield, Iowa.20 KTVO, operating out of Kirksville, Missouri, carries ABC
affiliated broadcast television network programming on its primary stream and CBS network
programming on its digital multicast stream, whereas KCCI-TV is a CBS affiliate licensed to Des
Moines, Iowa in the Des Moines-Ames DMA, while KCRG-TV is an ABC affiliate and KGAN is a CBS
affiliate, both licensed to Cedar Rapids, Iowa in the Cedar Rapids-Waterloo-Iowa City-Dubuque DMA.21
KMVT argues it would normally be entitled to assert network nonduplication and syndicated exclusivity
protection against other CBS and ABC affiliates such as KCCI, KCRG and KGAN, but because the latter
are considered significantly viewed, cable systems in Bloomfield and Fairfield are not required to delete
the network and syndicated programming offered by KCCI, KCRG and KGAN.22
6. To demonstrate that KCCI, KCRG and KGAN no longer meet the significantly viewed
standard in the communities at issue, KTVO commissioned surveys by Nielsen that measured over-the-
air viewing using diaries from noncable/non-ADS homes based on the zip codes for Bloomfield and
Fairfield.23 As shown in the following tables reproduced from KTVO’s Petition, the submitted data are
averages of two four-week audience sweep periods in each of two years.24 Both for Bloomfield and
Fairfield, the first year’s audience estimates were derived from February 2010 and May 2010 audience
sweep data, combined, and the second year’s estimates from February 2011 and May 2011.25 These
surveys satisfy the requirement that petitioners provide a showing of significantly viewed status for each
station based on two one-week surveys, separated by at least 30 days, of non-cable/non-ADS homes
conducted by an independent audience survey firm for two consecutive years.26
TABLE 1 – KCCI VIEWING IN BLOOMFIELD


20 Petition at 1-2.
21 Id. at 1-2
22 Id. at 3. KCCI, KCRG and KGAN were included in the Commission’s 1972 list of significantly viewed signals.
See id.
23 Id. at Attachment 1, Nielsen Report at 1.
24 See id.
25 Id.
26 47 C.F.R. § 76.54(b). The Bureau previously determined that substituting data from one four-week sweep period
for the one-week period specified in the rules is acceptable.
4

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No. of

Total Viewing Standard

Standard

Survey Dates

Diaries

Hours Share

Error

NWC Share

Error

Feb. 10/May 10
6
0.00
0.00
0.00
0.00
Feb. 11/May 11
3
0.00
0.00
0.00
0.00
TABLE 2 – KCRG VIEWING IN FAIRFIELD

No. of

Total Viewing Standard

Standard

Survey Dates

Diaries

Hours Share

Error

NWC Share

Error

Feb. 10/May 10
5
0.00
0.00
0.00
0.00
Feb. 11/May 11
4
0.00
0.00
0.00
0.00
TABLE 3 – KGAN VIEWING IN FAIRFIELD

No. of

Total Viewing Standard

Standard

Survey Dates

Diaries

Hours Share

Error

NWC Share

Error

Feb. 10/May 10
5
0.00
0.00
0.00
0.00
Feb. 11/May 11
4
0.00
0.00
0.00
0.00
7.
Barrington states that network stations, such as KCCI, KCRG, and KGAN, must achieve
at least a 3 share of total weekly viewing hours and at least a 25 net weekly viewing share to be
considered significantly viewed in a community, pursuant to Section 76.5(i) of the Commission’s rules.27
It observes that the submitted audience surveys show no measurable audience during any the survey
periods. Accordingly, it argues that KCCI, in Bloomfield, and KCRG and KGAN, in Fairfield, are no
longer significantly viewed and the Bureau should grant the requested waiver.28
8.
Opposing only the waiver request for carriage of KCCI in Bloomfield, Citizens argues
that that a very small sample, by itself, should not compel the deletion of programming from a distant
station that has historically been considered significantly viewed and carried in the community.29
Citizens observes that the survey for Bloomfield includes six in-tab households for 2010 and three in-tab
households for 2011 and, based on this small sample of non-cable, non-ADS households, estimated that
the over-the-air audience share for KCCI fall short of the criteria for significantly viewed status.30 It
concedes Barrington’s methodology is consistent with previously accepted showings,31 but, it argues that,
in the absence of a more meaningful survey or other persuasive evidence that KCCI is not available over-
the-air to viewers in Bloomfield, Barrington’s request for waiver should be denied as not in the public
interest.32 Citizens provides its system-specific subscriber information to demonstrate that KCCI


27 Petition at 4.
28 Id. at 6.
29 Citizens Opposition at 1, 4-5.
30 Id. at 4.
31 Id.
32 Id. at 5. LISCO states that it joins with Citizens with respect to the small sample issue. It asserts that it does not
(continued…)
5

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consistently outperforms KTVO in attracting viewers, and argues that with a majority of households
viewing programming through an MVPD, deletion of KCCI would result in significant public
inconvenience, confusion, and dissatisfaction.33
9.
Barrington replies that Citizens’ data regarding KCCI’s cable viewership is irrelevant
given that the significantly viewed exception was designed to ensure access to programming of a distant
station that was significantly viewed over-the-air.34 Furthermore, Barrington argues, allowing MVPDs to
import duplicating portions of distant signals that are no longer significantly viewed distorts the local
broadcast marketplace,35 and the established waiver process ensures that MVPDs cannot artificially
undermine a stations’ ability to enjoy the benefits of their bargained-for exclusivity arrangements.36
10.
Citizens also argues Barrington’s request for waiver is contrary to the public interest
because deletion of KCCI’s signal will abrogate Citizens’ bargained-for contractual rights; it notes it
entered into a retransmission consent agreement with Hearst-Argyle Television, Inc., to carry the primary
and multicast streams of KCCI on the Bloomfield system, a cost ultimately borne by its subscribers who
are entitled to receive its programming without deletions or interruptions.37 LISCO points out that when
KCRG, KGAN, and KTVO doubled their retransmission consent prices in 2012, it began to only transmit
Cedar Rapids stations (i.e., KCRG and KGAN) because of the high cost of offering duplicative
programming on its small system.38 LISCO is concerned that if a waiver is granted, the national ABC
and CBS networks will cause the Cedar Rapids affiliates to terminate their retransmission consent
agreements with LISCO in Fairfield because their affiliation agreements bar them from being carried
outside of their markets in any area where they are not significantly viewed.39 Accordingly, by becoming
the exclusive provider of ABC and CBS programming in Fairfield and Bloomfield, KTVO would force
LISCO to enter a retransmission agreement with it.40 Barrington replies that it is not in a position to
comment on the contractual restrictions to which KCRG or KGAN are subject and that such arguments
are irrelevant to the processing of its request under the Commission’s rules.
11.
In their oppositions, both Citizens and LISCO also argue the Bureau should find that the
small system exemption to the network non-duplication rule contained in Section 76.95(a) applies to their
systems.41 Citizens states it owns and operates a wireline digital video MVPD system providing IPTV
based service to only 500 subscribers in Bloomfield,42 and LISCO states it is a cable service provider


(…continued from previous page)
have the resources to refute the showing, but finds it troubling that a station’s significantly viewed status can be
overcome by the submission of limited data sets consisting of only four or five households. LISCO Opposition at 6
n.15.
33 Id. at 5-6 & n.10 (citing Attachment 1, Exhibit).
34 Reply to Citizens at 3-4 (emphasis in original).
35 Id. at 4.
36 Id. at 6.
37 Citizens Opp. at 5-6.
38 LISCO Opp. at 2.
39 Id. at 8.
40 Id. at 3.
41 Section 76.95(a) exempts cable systems with fewer than 1000 subscribers from the network non-duplication rules.
42 Citizens Opp. at 1, 2-4 & 7.
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serving fewer than 1000 subscribers in Fairfield.43 If the waiver request is granted, both Citizens and
LISCO ask that the Media Bureau delineate the scope of any waiver, and explicitly state that it will not
require the deletion of network programming by video systems which qualify as small systems under
Section 76.95(a).44
12.
In reply to LISCO, Barrington asserts it does not seek a waiver of the small system
exception, it seeks only to assert its non-duplication rights as permitted under the rules;45 however, it
notes that Citizens in particular has not proven that it qualifies for this exemption.46 Barrington argues
that the waiver it seeks would have no effect on the applicability of the small system exemption and the
ability of qualifying systems from availing themselves of this exemption as long as they have fewer than
1,000 subscribers.47
13.
LISCO also asks the Commission to include a special note in its final decision that will
either explicitly exempt small cable companies from any change in KCRG and KGAN’s significantly
viewed status in Fairfield or state that these stations will continue to be considered significantly viewed
in Fairfield with respect to small cable systems.48 However, Barrington responds that a waiver of the
significantly viewed exception with respect to a community does not delete an affected station from the
list of significantly viewed signals.49 Accordingly, a grant of the requested waiver does no more than
allow local stations to assert exclusivity rights against other stations listed as significantly viewed in a
particular area.50

III.

DISCUSSION

14.
With regard to the significantly viewed issue, KTVO has submitted the necessary re-
tabulations of Nielsen data to demonstrate that KCCI in Bloomfield and KCRG and KGAN in Fairfield
are no longer significantly viewed.51 Indeed, Citizens concedes the showing meets all the Commission’s
requirements.52 Citizens also submitted data containing cable subscribers’ viewership information


43 LISCO Opp. at 1-2.
44 Citizens Opp. at 2, 6-7; LISCO Opp. at 8-9.
45 See Reply to LISCO at 5.
46 Reply to Citizens at 6 (noting that Citizens’ assertion that its system serves 500 subscribers in Bloomfield, the
largest community served by its system, does not rule out that there may be more subscribers on Citizens’ system as a
whole). However, Barrington also states it takes no position on the question of whether Citizens qualifies for the
small system exemption. Id. at n.20.
47 Id. at 6-7; Reply to LISCO at 4.
48 LISCO Opp. at 8-9.
49 Reply to LISCO at 6 (also noting that the Commission recognized that deleting a station from the list would have
implications for copyright liability).
50 Id. at 7.
51 As set forth in Section 76.5(i), the significant viewing criteria for a network station are an audience of at least a 3
share of total weekly viewing hours and at least a 25 net weekly viewing share, and the data shows these stations fail
to attain any measurable over-the-air viewing for each community for each year surveyed.
52 See Citizens Opposition at 4. Moreover, neither opposing party submits data that calls into question the results of
Nielsen’s re-tabulated data submitted by Barrington. See WISN Hearst-Argyle Television, Inc., CSR-7764-N, 26
FCC Rcd 4044 (2011).
7

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collected from set-top boxes, but this does not provide relevant information since it fails to reflect over-
the-air viewing.53 With respect to Citizens’ concerns with the small sample size of Barrington’s studies,
as we have stated in the past, there is no requirement to use a specific number of in-tab diaries to
calculate the average audience in a specific community in each survey period.54 The Commission’s rules
for a community-specific survey only require that each community be represented in each survey.55 In
this case, the sample sizes of three and six in-tab diaries for the first and second year respectively for
Bloomfield (and five and four in-tab diaries for Fairfield), while small, exceed the minimum sample of
two in-tab diaries needed to calculate an average and sufficiently represent each survey period.56
Moreover, our rules require that the survey results exceed a 3 percent share of total viewing hours and a
net weekly circulation of 25 percent, by at least one standard error, to ensure that the reported results are
representative of actual viewing, taking sample size into account, which is frequently small for Nielsen’s
retabulations.57
15.
Sections 76.95(a) and 76.106(b) of our rules provide that small cable systems serving
fewer than 1,000 subscribers are exempt from both the network nonduplication and syndicated
exclusivity rules, respectively.58 However, both our network nonduplication and syndicated exclusivity
rules may only be invoked by television stations with respect to programming aired over cable or satellite
systems,59 and it is unclear from this record whether Citizens and LISCO are cable operators as defined
by the Communications Act and the Commission’s rules.60 If they are cable operators, and if these
systems meet the definition of small cable systems having less than 1,000 subscribers, then they would be
subject to the exemption. Therefore, although we waive the significantly viewed status of KCCI, KCRG,
and KGAN with respect to the communities of Fairfield and Bloomfield, we do not take a position on
whether Citizens or LISCO will have to delete the programming of these stations upon KTVO’s assertion
of its network nonduplication and syndicated exclusivity rights. We would expect the parties to resolve
whether Citizens and LISCO are cable systems and, if so, whether the cable systems at issue have
sufficiently few subscribers to qualify for the exemption. If the parties are unable to reach an agreement,
they may raise the issue at the Commission through the normal complaint process.

IV.

ORDERING CLAUSES

16. Accordingly,

IT IS ORDERED

, that the petition filed by Barrington Kirksville License,
LLC, licensee of station KTVO-TV, Kirksville, Missouri

IS GRANTED

for the communities of
Bloomfield and Fairfield, IOWA.
17. This action is taken pursuant to authority delegated under Section 0.283 of the Commission’s


53 See Citizens Opposition at 5 & Exhibits.
54 See, e.g., Gulf-California Broadcasting Company, CSR-7050-N, 23 FCC Rcd 7406, 7411 (2008).
55 Id.
56 Without evidence to the contrary, we assume that at least one in-tab household was included from each survey
period when the average reported values were calculated.
57 47 C.F.R. §76.5(i); 47 C.F.R. § 76.54(b).
58 See 47 C.F.R. § 76.95(a) and 47 C.F.R. § 76.106(b).
59 See, e.g., 47 C.F.R. §§ 76.94(a), 76.105(a), 76.122(c) and 76.123(d).
60 47 U.S.C. § 522(5) (“cable operator”); 47 C.F.R. § 76.5(cc) (“cable system operator”).
8

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rules.61
FEDERAL COMMUNICATIONS COMMISSION
Steven A. Broeckaert
Deputy Chief, Policy Division
Media Bureau


61 47 C.F.R. §0.283.
9

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