$//MO&O Denying KRCA carriage on Dimension Cable, DA-95-79//$ $/300.534 Carriage of local commercial television signals/$ $/76.61 Disputes concerning carriage/$ ///newjob/// $///DA 95-79,1/27/95///$ Before the Federal Communications Commission Washington,D.C. 20554 DA-95-79 In re: ) Complaint of Fouce Amusement ) CSR-4135-M Enterprises, Inc. against ) CA0060 Community Cablevision Company ) ) Request for Carriage ) MEMORANDUM OPINION AND ORDER Adopted: January 19, 1995 Released: February 1, 1995 By the Chief, Cable Services Bureau: INTRODUCTION 1. On October 5, 1992, the Cable Television Consumer Protection and Competition Act of 1992 (1992 Cable Act) became law. On March 11, 1993, the Commission adopted a Report and Order to implement mandatory broadcast signal carriage ("must-carry") provisions of the Cable Act. Pursuant to the rules adopted in the Report and Order, cable systems were required to commence carriage of local broadcast stations entitled to must-carry status beginning June 2, 1993. On June 17, 1993, local broadcast stations were required to make their initial election of either must-carry or retransmission consent status and notify cable systems of their election. Those broadcast stations which elected must-carry status were required to notify the cable system of their preferred channel position at that time. SUMMARY OF PLEADINGS 2. On October 13, 1993, Fouce Amusement Enterprises, Inc. (Fouce), licensee of KRCA- TV (KRCA) filed a complaint against Community Cablevision Company, d/b/a Dimension Cable Services (Dimension), for the latter's failure to comply with the channel positioning requirements of the Commission's Rules and the 1992 Cable Act. 3. According to the complaint, on April 13, 1993, KRCA notified Dimension that it was requesting carriage pursuant to must-carry. On August 17, 1993, after the two parties reached an agreement regarding compensation for copyright liability, Dimension agreed to carry KRCA. Additionally, Dimension informed KRCA that it was rebuilding its system in order to expand channel capacity, and that KRCA would only be carried in the rebuilt areas. However, Dimension assured KRCA that once the rebuild was completed the station would be available to all of Dimension's subscribers. Subscribers in the rebuilt portion of Dimension's system are able to access 56 channels while those in the older portion are able to access 40 channels. 4. Fouce argues that Section 76.56(d)(1) of our Rules requires that a broadcast station carried in fulfillment of a cable operator's must-carry obligations must be made available to every subscriber of that system. Thus, according to Fouce, KRCA must be carried on the old as well as the new portions of the system. 5. Dimension responds by contending that its must-carry requirement is not based on a 56- channel system. Dimension cites our statement that "if a portion of a cable system has insufficient wiring or microwave capacity to receive the full complement of channels available at the system's principal headend, we will not require the cable operator to upgrade that part of the system". According to Dimension, this statement clearly indicates that where different parts of a cable system have differing channel capacities the number of channels devoted to must-carry may also differ relative to the respective channel capacities of the system. Dimension contends that by already carrying 13 broadcast stations--9 by must- carry, 4 by retransmission consent--on the 40 channel segment of its system, and thus having satisfied its must-carry obligations with regard to this portion of the system, to accept KRCA's reasoning is to require that the 40 channel segment be upgraded. Simply, Dimension believes that it is not required to treat its entire system as having 56 channels for purposes of determining its system-wide must-carry obligations. Dimension finds no indication from our Rules or the legislative history that the "moment an operator rebuilds a portion of its system, thereby potentially increasing its must-carry quota for that portion, that all the system's other subscribers, including those in the unrebuilt areas, must be provided with every must-carry station carried anywhere on the system." 6. KRCA responds that it is not requesting that we require Dimension to complete its upgrade, just that Dimension make KRCA available to all its subscribers. KRCA also believes that since the must-carry quota is based on the number of activated channels, and since Dimension admits that its system has 56 channels engineered at its headend, Dimension's must-carry quota consists of 19 rather than 13 channels. KRCA further contends that Dimension has not shown that any of its subscribers have "insufficient wiring or microwave capacity" to receive all 56 channels. Further, complainant cites to Complaint of WLIG-TV, Inc. against Cablevision Systems Corporation, CSR-3903-M (Nov. 10, 1993) as evidence that its position is correct. KRCA argues that in WLIG the "Commission directed a cable operator to provide a must-carry signal to all of its subscribers, over the argument of the operator that it would have insufficient channel capacity to do so on the portions of its system in which it would not complete a system rebuild until early 1994." In WLIG, the complainant was carried on channel 37 and inaccessible to subscribers who had been provided with only 36-channel converters. KRCA noted that even though the Commission had previously stated that it would not require cable operators to provide converter boxes to subscribers so that they would be able to receive broadcast signals, it nonetheless ruled that it would be in the public's interest to require the cable operator to move WLIG to a channel viewable by all subscribers. 7. In its final reply to KRCA, Dimension distinguished WLIG by noting that WLIG, unlike the present complaint, "addressed the issue of a cable operator's obligations with respect to a signal within the system's must carry quota...The cable operator did not contend...as Dimension does here, that carriage of the signal was not required in non-upgraded areas because the system had already met its signal carriage quota." DISCUSSION 8. We conclude that Dimension is not required to make KRCA available to all of its subscribers prior to completion of its rebuild. Section 76.56(d)(1), the core of KRCA's argument, states that "Local commercial television stations carried in fulfillment of the requirements of this section shall be provided to every subscriber of a cable system." Additionally, we note that Section 76.56(b)(2) states that "A cable system with more than 12 useable activated channels, as defined in Section 76.5(oo), shall carry local commercial television stations up to one-third of the aggregate number of useable activated channels of such system." Ordinarily, these two sections are not seen as conflicting or contradictory. Here, however, the juxtaposition of these two provisions requires that we decide which part of Dimension's system determines its system-wide must-carry obligation: the older 40 channel portion, the new 56 channel portion, or may there be separate requirements for each portion? 9. Even though a broadcast station may qualify for carriage pursuant to the must-carry rules there is no requirement that every eligible station ultimately be carried. For example, the one-third requirement which applies to systems the size of Dimension (setting aside, for the moment, its bifurcation) clearly sets a limit on the number of eligible stations that would have to be carried by any one cable system pursuant to must-carry. Similarly, our Rules state "Whenever the number of local commercial television stations exceeds the maximum number of signals a cable system is required to carry under...this section, the cable operator shall have discretion in selecting which such stations shall be carried on its cable system,...." Thus, not every station that qualifies for must-carry has an absolute right to carriage. If Dimension's entire system only consisted of 40 channels, KRCA could be carried--but "at the discretion of [Dimension], subject to retransmission consent...." 10. The controversy here concerns which portion of Dimension's system should be used to calculate its must-carry obligation. We could require use of the 40 channel portion, the 56 channel portion, or mandate different requirements for different portions of the system. Obviously, making the 40 channel portion determinative would potentially allow for the harmful result of removing channels otherwise guaranteed carriage on the 56 channel portion of the system; and to use the 56 channel portion as controlling implicates the point raised by Dimension: we would then be requiring Dimension exceed the number of signals ordinarily required to be carried or to upgrade its system. Therefore, we conclude that the best option is one that maintains the present arrangement: KRCA carried on the upgraded portion of the system, but not required to be placed on the old portion until the rebuild is completed. 11. We reach this conclusion principally because KRCA is beyond the scope of Dimension's must-carry obligations, i.e. Dimension currently carries its maximum number of must-carry stations on the 40 channel segment. In WLIG we did require the cable operator to switch the broadcast station to a channel receivable by all subscribers, but WLIG concerned a cable operator's obligations with respect to a signal within its cable system's must-carry quota. KRCA, however, is outside of Dimension's must-carry obligations on the 40 channel segment, thus we have no basis for mandating its carriage on this portion of the system. KRCA has offered no evidence challenging Dimension's claim that carriage of the 13 channels satisfies Dimension's must-carry obligation; nor has complainant suggested that its rightful place is within Dimension's first thirteen must-carry stations. Simply because KRCA could have been carried pursuant to must-carry on the 40 channel portion is no reason for us to expand the obligations of the older segment of the system where all the must-carry slots have been taken. 12. Accordingly, the petition filed on October 13, 1993, by Fouce Amusement Enterprises, Inc. IS DENIED, in accordance with Section 614(b)(B) (47 U.S.C.  534) of the Communications Act of 1934, as amended. 13. This action is taken by the Cable Services Bureau, pursuant to authority delegated by Section 0.321 of the Commission's Rules. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau