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(WBSV-TV), MO&O, DA-95-892//$ $/76.59 Modification of television markets/$ $/300.534 Carriage of Local Commercial Television Signals/$ ///newjob/// $///DA 95-892,4/24/95///$ Before the Federal Communications Commission Washington, D.C. 20554 DA-95-892 In re: ) ) DeSoto Broadcasting, Inc. ) CSR-3899-A Venice, Florida ) ) For Modification of Station ) WBSV-TV's ADI ) MEMORANDUM OPINION AND ORDER Adopted: April 19, 1995 Released: April 27, 1995 By the Cable Services Bureau: INTRODUCTION 1. DeSoto Broadcasting, Inc. ("DeSoto Broadcasting" or "WBSV-TV"), licensee of Station WBSV-TV (Ind., Channel 62), Venice, Florida, has filed the above-captioned petition for special relief seeking to include cable communities in Charlotte County, Lee County, DeSoto County, and Manatee County, Florida (collectively known as "the Communities") within the Sarasota, Florida "area of dominant influence" (ADI) for the purpose of obtaining carriage under the Commission's cable television mandatory broadcast signal carriage rules. WTOG-TV, Inc. ("WTOG"), licensee of Television Broadcast Station WTOG (Ind., Channel 44), St. Petersburg, Florida, and FCVS Communications ("FCVS" or "WEVU"), licensee of Television Broadcast Station WEVU (ABC, Channel 26), Naples, Florida, filed oppositions to the petition for special relief. WBSV-TV filed a reply to the oppositions. BACKGROUN D 2. Pursuant to 4 of the Cable Television Consumer Protection and Competition Act of 1992 ["1992 Cable 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 ADI areas. Section 614(h) 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 1992 Cable 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 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 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 demonstrated 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. 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 1992 Cable Act, that a station not be deleted from carriage during the pendency of an ADI change request. 7. Adding communities to a station's ADI generally entitles that station to insist on cable carriage in those communities. However, this right is subject to several conditions: 1) a cable system operator is generally required to devote no more than one-third of the system's activated channel capacity to compliance with the mandatory signal carriage obligations; 2) the station is responsible for delivering a good quality signal to the principal headend of the system; 3) indemnification may be required for any increase in copyright liability resulting from carriage; and 4) the system operator is not required to carry the signal of any station whose signal substantially duplicates the signal of any other local signal carried, or the signal of more than one local station affiliated with a particular broadcast network. If, pursuant to these requirements, a system operator elects to carry the signal of only one such duplicating signal, the operator is obliged to carry the station from the ADI whose city of license is closest to the principal headend of the cable system. Accordingly, based on the specific circumstances involved, the addition of communities to a station's ADI may guarantee it cable carriage and specific channel position rights, or may simply provide the system operator with an expanded list of must-carry signals from which to choose (i.e., when the system has used up its channel capacity mandated for broadcast signal carriage, or determined which of duplicating network affiliated stations are entitled to carriage priority). MARKET FACTS AND ARGUMENTS OF THE PARTIES 8. The Florida communities that WBSV-TV seeks to add to its ADI are located in DeSoto and Manatee Counties, which are in the Tampa-St. Petersburg, Florida ADI, and in Charlotte and Lee Counties, which are in the Fort Myers-Naples, Florida ADI. WBSV-TV is located in Sarasota County, which, standing alone, comprises the Sarasota ADI. Manatee, DeSoto and Charlotte Counties are adjacent to Sarasota County, and Lee County is immediately south of Charlotte County. Virtually all of the communities in question are covered by WBSV-TV's predicted Grade B contour. 9. In support of its petition, DeSoto Broadcasting states that WBSV-TV has been on the air since May 1991, and has been carried on Storer Cable TV's Englewood cable system located in Sarasota, Charlotte, and Lee Counties and Paragon Communication's Bradenton cable system located in Manatee County since 1991. WBSV-TV asserts that due to its short on-air history and the difficulties UHF independent stations traditionally face, the focus on historic carriage is better placed on a similarly situated station. WBSV-TV points to WWSB (ABC, Channel 40), Sarasota, Florida as a similarly situated station that has a history of carriage on all of the systems at issue. WBSV-TV notes that it places a Grade B or better service contour over almost all of the communities at issue. WBSV-TV asserts that it broadcasts news, sports, and local charitable events of interest to the Communities. Moreover, WBSV-TV provides closed captioned news which is not provided by other area stations and alleges that approximately 20 percent of Charlotte County need such assistance. WBSV-TV states that it has spent substantial sums on advertising and marketing its station in the communities at issue. With regard to viewing patterns, WBSV-TV submits 1992-93 Arbitron data for Charlotte County to demonstrate significant viewership. In addition, WBSV-TV submits a petition signed by residents of Port Charlotte and Punta Gorda in Charlotte County and Arcadia in DeSoto County requesting Storer Cable to carry WBSV-TV. Finally, DeSoto Broadcasting notes that with respect to Metropolitan Statistical Areas (MSAs), which are defined by Office of Management and Budget for federal statistical use, the OMB combined the Sarasota MSA and the Bradenton MSA, relying on standards which emphasize that the two areas are linked socially and economically. Therefore, asserts WBSV-TV, the fact that Bradenton and Sarasota are now a combined MSA supports its petition. 10. WTOG, in opposition to WBSV-TV's petition, argues that there is no support for treating WWSB as similarly situated to WBSV-TV. WTOG notes that the two stations are licensed to different cities (WWSB to Sarasota and WBSV-TV to Venice), that WWSB is an ABC affiliate while WBSV-TV is an independent station, and that WWSB achieves a significantly higher share of viewers in Sarasota County than WBSV-TV. Therefore, WTOG argues, cable carriage of WWSB cannot justify WBSV-TV's request. WTOG further argues that the purpose of redefining a station's market is to correct anomalies so as to minimize disruption to viewers, and not to assist fledgling stations to gain cable carriage. WTOG asserts that Grade B coverage of the Communities is not enough, and that WBSV-TV fails to demonstrate how it meets the specific needs of the Communities. WTOG notes that WBSV- TV does not provide any viewing data for Lee, Manatee, or DeSoto Counties, and that even in Charlotte County the station's viewing is dismal. WTOG contends that a shared MSA is no basis for Commission action, because Congress chose to use viewing patterns to determine carriage rights and not MSAs. 11. WEVU in its opposition states that the Ft. Myers-Naples ADI in which it is licensed has been historically stable: for a number of years the market has consisted of the same five counties (Charlotte, Glades, Hendry and Lee). WEVU states that Arbitron assigned DeSoto County to the Tampa-St. Petersburg ADI, while the Nielsen Station Index assigned DeSoto to the Ft. Myers-Naples DMA despite the fact that Ft. Myers' stations had an aggregate 58 share in DeSoto. WEVU does not object to WBSV-TV's request to include Manatee County in its market because the communities in Manatee have natural ties to Sarasota. WEVU states that WWSB recognized that Charlotte County is not in its market when it requested Commission authorization in 1979 to relocate its transmitter northward. WEVU asserts that it is not a quirk that Charlotte and Lee Counties are not part of the Sarasota ADI. Charlotte, WEVU claims, is not a fringe county separated from the major metropolitan area of the market by mountains, but is an integral part of the Ft. Myers-Naples market. WEVU also notes that WBSV-TV is not significantly viewed in Charlotte by its own data, and that WBSV-TV presents no data for Lee or DeSoto Counties. 12. In reply, WBSV-TV states that WWSB's decades old notion of its market is not dispositive of another station's market. In fact, WBSV-TV notes, WWSB has recently filed a petition to add Charlotte communities to its market. In response to WTOG, WBSV- TV states that the differences between it and WWSB do not diminish their similarity because they are located in the same county and both stations' must-carry market is artificially limited to a single county. WBSV-TV argues that the purpose of the market redefinition is to correct inaccurate reflections of the area in which a station is entitled to carriage and minimizing subscriber disruption is only a component of this requirement. WBSV-TV asserts that its must-carry zone does not reflect its true service area. WBSV-TV notes that its Grade B coverage is particularly relevant under the Commission's rules, and further notes that the most distant community WBSV-TV seeks to add, Arcadia, is only 37 miles from Venice, WBSV- TV's city of license. Finally, WBSV-TV contends that the purpose of market redefinition is to correct anomalies due to the rigid ADI borders. WBSV-TV maintains this is particularly relevant here because its current ADI barely extends beyond its Grade A contour. ANALYSIS AND DECISION 13. We shall grant DeSoto Broadcasting's petition. WBSV-TV is in the unusual position of being assigned to a single county ADI, yet is so close to the communities in the neighboring ADIs that its City Grade service contour extends far into these other markets. The Commission's market modification process established pursuant to 614(h)(1)(C) of the Communications Act allows stations to add or delete communities from their ADI to reflect their true marketplace. To aid in the Commission's determination the Act sets out four factors indicative of localism. These factors, however are not exhaustive; the petitioner may introduce additional evidence to demonstrate that the communities are part of the station's local market. Arbitron places television stations in ADIs according to the viewing patterns of those stations in each county. However, the Commission has noted that viewing data may not always provide sufficient evidence of a station's local market. In the case of a new station, viewing patterns can take up to three years to establish, or in the case of specialty station the audience is typically limited. Because WBSV-TV is a new station, it is appropriate to rely on other evidence of the station's local market to determine whether a particular community should be added to its market. 14. We find that WBSV-TV has demonstrated that the Communities are part of its local market. The fact that WBSV-TV places at minimum a Grade B service contour, and in many cases a Grade A or City Grade service contour, over the Communities is compelling evidence that WBSV-TV provides service to these communities. As we noted in paragraph 5, supra, the presence of a Grade B contour over a community is generally sufficient to satisfy this factor. Moreover, the Commission has noted the importance of a City Grade signal in determining local coverage. We also note that the furthest community at issue is only 37 miles from WBSV-TV's city of license. We believe that less weight should be placed on the fourth statutory factor in this case because WBSV-TV has been on-air only since May of 1991. We believe that there has been insufficient time for WBSV-TV to garner substantial levels of viewership in all of these counties, although it clearly has begun to do so in Charlotte County. With respect to historic carriage, WBSV-TV has shown that it is historically carried on one major cable system in Charlotte County and one major cable system in Manatee County. However, WBSV-TV has also demonstrated that WWSB, the other Sarasota ADI licensee, has historically been carried by all the cable systems in question. This is precisely the situation the 1992 Cable Act was designed to remedy. This is even a more compelling consideration in cases such as the one before us in which the two stations' Grade B contours overlap significantly. While WBSV-TV and WWSB are licensed to different cities in the Sarasota ADI, we do not feel that this is a serious distinction in a single- county ADI. With respect to the third factor, we believe that Congress did not intend this to be a bar to a station's ADI claim whenever other stations could also be shown to serve the communities at issue. Rather, we believe that this criterion was intended to enhance a station's claim where it could be shown that other stations do not serve the communities at issue. Under such circumstances, a denial of carriage rights to the claiming station could deprive cable viewers of any broadcast signals that might provide programming geared to their communities. Because other stations do appear to serve the cable communities at issue, this enhancement factor would not appear applicable. 15. As additional support for its request WBSV-TV notes that Bradenton in Manatee County and Sarasota are in a shared metropolitan statistical area (MSA). Since a shared MSA requires evidence of economic and social links between the two areas, we believe that, in this instance, it provides further evidence of the close economic connection between Manatee County and Sarasota County and combined with the signal coverage to these communities indicates that the natural market for WBSV-TV extends into Manatee County. We find that the close proximity and the Grade B to City Grade coverage of the communities in Charlotte and Lee County weigh heavily in favor of including these communities into the WBSV-TV's market. Moreover, the fact that cable systems in Manatee and Charlotte Counties extend into Sarasota County demonstrate that these communities are local to Sarasota. While the record to demonstrate viewing patterns or historic carriage is insufficient due to WBSV-TV's relative youth, we believe that WBSV-TV has demonstrated that WBSV- TV is local to the cable communities at issue. Therefore, we find that inclusion of the Charlotte, Lee, and Manatee County cable communities listed in notes one, two, and four, supra, is justified. 16. With respect to DeSoto County, we find that WBSV-TV has also demonstrated that the communities therein should be included in its market. We note that the communities in question in DeSoto County are within WBSV-TV's Grade B contour, and are in close proximity to the station's home-county ADI. Moreover, just as in the other counties, WBSV- TV has presented evidence of its discriminatory carriage treatment. Though viewership evidence is lacking, as we said in paragraph 14, supra, we find that this is of lesser importance in the case of a new station such as WBSV-TV. Therefore, we find that grant of WBSV-TV's request to modify its market to include the DeSoto County cable communities listed in note three, supra, in the station's ADI is justified. 17. We note, finally, that the system carrying WBSV-TV in Charlotte, Storer Cable TV of Florida in Charlotte and Lee Counties, also serves Sarasota County. Likewise, the Storer's Longboat Key cable system, although not carrying WBSV-TV, serves communities in both Manatee and Sarasota Counties. The Commission has determined that a cable system whose communities straddle more than one ADI must carry the local television stations from both markets, unless the operator can technically segregate the channels on a community-by- community basis to reflect location of the community within a particular ADI. Therefore, even in the absence of a market modification request, Storer's Englewood and Longboat Key systems are required to carry WBSV-TV, unless Storer can technically deliver a different channel line-up that includes WBSV-TV to those portions of Englewood and to those portions of Longboat Key in Sarasota County. ORDER 18. In view of the foregoing, we find that grant of DeSoto Broadcasting's petition is in the public interest. 19. Accordingly, IT IS ORDERED, pursuant to 614 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 filed June 2, 1993 by DeSoto Broadcasting, Inc. IS GRANTED. This change shall be effective in accordance with the following schedule: DeSoto Broadcasting shall notify the cable systems in question in writing of its carriage and channel position elections, (76.56, 76.57, 76.64(f) of the Commission's Rules), within thirty (30) days of the release date of this Memorandum Opinion and Order. The affectedcable systems shall come into compliance with the applicable rules within 60 days of such notification. 20. This action is taken by the Cable Services Bureau pursuant to authority delegated by 0.321 of the Commission's rules. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau