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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 the Matter of ) ) TIME WARNER ENTERTAINMENT- CSR-4848-A) ADVANCE/NEWHOUSE PARTNERSHIP ) dba AMERICAN CABLEVISION OF ) ST. LOUIS ) ) For Modification of the ADI of ) Station WCEE-TV ) MEMORANDUM OPINION AND ORDER Adopted: March 5, 1997 Released: March 11, 1997 By the Deputy Chief, Cable Services Bureau: INTRODUCTION 1. Time Warner Entertainment-Advance/Newhouse Partnership, d/b/a American Cablevision of Saint Louis ["ACSL"], operator of cable television systems serving communities in and around St. Louis, Missouri, has filed the captioned petition which seeks to exclude the communities served by ACSL from the St. Louis, Missouri area of dominant influence ("ADI") of WCEE-TV (Ind., Channel 13), Mt. Vernon, Illinois. Paxson St. Louis License, Inc. ["WCEE-TV"], licensee of the station, filed an opposition, and ACSL filed a reply. BACKGROUND 2. Pursuant to 614 of the Communications Act and implementing rules adopted by the Commission in its Report and Order in MM Docket No. 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 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 No. 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. 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 requested changes 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. MARKET FACTS AND ARGUMENTS OF THE PARTIES 8. The communities in question are suburbs of St. Louis to its west in St. Louis County, Missouri. They are centrally located in the St. Louis ADI. Mt. Vernon, WCEE-TV's city of license, is located at the eastern edge of the St. Louis ADI, approximately 75 miles from St. Louis. The nearest communities are located approximately 87 miles from Mt. Vernon, while the furthest communities are approximately 102 miles from Mt. Vernon. The Mississippi River bisects the ADI. 9. ACSL states that it has never carried WCEE-TV, although the station has been in operation since 1983. ACSL further states that all of the communities served by its systems lie beyond the Grade B contour of WCEE-TV and are on average 75 miles from Mt. Vernon, WCEE-TV's city of license. Such distances, ACSL argues, have previously been found to justify deletion of communities from certain stations' markets. ACSL also argues that the Mississippi River and the city of St. Louis itself form a natural barrier between Mt. Vernon and the communities served by ACSL in St. Louis County. ACSL contends, too, that WCEE-TV provides no local programming or local service to the communities in question. ACSL states that the St. Louis edition of TV Guideno longer includes programming information for WCEE-TV, nor does the St. Louis Post-Dispatch. ACSL states that Nielsen's most recent market designation assigns WCEE-TV to the Paducah, Kentucky--Cape Girardeau, Missouri--Harrisburg, Illinois--Marion, Illinois Designated Market Area (DMA), which ACSL contends represents the station's actual market area, citing the Report and Order and Further Notice of Proposed Rulemaking in CS Docket 95-178. ACSL argues that other local stations do provide actual service to and coverage of the communities in question. Finally, ACSL cites a letter from the Cable Advertising Network of Greater St. Louis -- which compiles Nielsen daypart viewing data for the St. Louis DMA -- to demonstrate that WCEE-TV achieves no measured off-air viewing in the St. Louis DMA. 10. In opposition, WCEE-TV argues that ACSL has failed to demonstrate that denying WCEE- TV its must-carry rights in the communities in question would further Congress' intent of promoting localism and increasing diversity and competition. WCEE-TV states that its program-length presentations air during daytime hours, its religious programming airs through the night, and that it airs syndicated programming during prime-time hours. WCEE-TV further states that it presents a half hour of children's programming 6:30 to 7:00 am Monday through Saturday, and also three hours of local and regional religious programming and an hour of locally-originated public affairs programming entitled "St. Louis Views" on Sundays. WCEE-TV specifically notes that "St. Louis Views" has aired programming focusing on St. Louis area issues, opportunities, projects, and community events. WCEE-TV contends that it provides a valuable and effective advertising platform for local businesses and organizations, and expects that within two years up to 45% of the station's air time will be devoted to such presentations. WCEE-TV notes that it provides a signal of sufficient strength through Low Power Television Station K07TV, St. Louis, Missouri, which WCEE-TV has acquired to retransmit its programming, and commits to delivering its signal via fiber optic cable to ACSL headends that cannot receive a good quality signal over the air. WCEE-TV describes itself as "[a]n emerging specialty station . . . precisely the kind of station that Congress sought to benefit through the Cable Television Consumer Protection and Competition Act of 1992. . . ." WCEE-TV contends that ACSL has failed to rebut the statutory presumption favoring mandatory carriage of WCEE-TV throughout the St. Louis ADI. WCEE-TV argues that 614(h)(1)(C)(i) of the Act authorizes the Commission to modify ADI markets "to better effectuate the purposes of this section," which WCEE-TV states are to ensure cable carriage of local stations so that they may originate local programming, and to counteract cable operators' economic incentive to delete stations which compete for advertising revenue with the operators. WCEE-TV notes that the Commission is instructed, in considering market modification requests, to "afford particular attention to the value of localism . . . ," and argues that, in the present case, this attention weighs in favor of the station's continued carriage, particularly given the smaller and specialty nature of WCEE-TV. 11. Turning to the four statutory factors, WCEE-TV argues that its lack of historic carriage should not be given great weight in a situation where, as here, ACSL seeks to delete communities from WCEE-TV's ADI. With regard to the station's local service, WCEE-TV notes that it provides service beyond its Grade B contour through Low Power Television Station K07TV, and cites the various episodes of "St. Louis Views" that it broadcasts. Though ACSL places great weight on the distances between WCEE-TV's city of license and the communities in question, WCEE-TV contends that Congress rejected a mileage-based determination of station markets, and opted instead for defining markets be reference to stations' ADIs. WCEE-TV further contends that Congress similarly did not rely upon geographic features to determine stations' markets. WCEE-TV cites a June 22, 1995 letter from Nielsen stating that the station will be reassigned to the St. Louis DMA effective in October 1995. WCEE-TV argues that the merits of its programming format are not germane to this discussion. WCEE-TV contends that the fact that other St. Louis ADI stations are carried by ACSL is not relevant to its request to modify WCEE-TV's ADI by deleting communities. Finally, WCEE-TV contends that its modest audience share must be considered in the light of its nature as a struggling independent station with a specialty format, and notes that ACSL carries two other stations -- television broadcast stations KNLC (Ind., Channel 24), St. Louis, Missouri, and WHSL (Ind. Channel 46), East St. Louis, Illinois [this latter a home shopping station] -- whose audience shares are not significantly greater than those of WCEE-TV. 12. In reply, ACSL argues that WCEE-TV has offered no evidence to refute the system's showing that the communities in question should be deleted from WCEE-TV's ADI. ACSL contends that modification of WCEE-TV's market is fully consistent with Congressional intent and Commission precedent. ACSL claims that it has demonstrated that each of the four statutory factors favor modification of WCEE-TV's market as requested, and that WCEE-TV has failed to rebut this demonstration. ACSL notes that the cases cited by WCEE-TV to support its contention that a lack of carriage should not weigh against it all involved stations placing a Grade A or a Grade B contour over the communities in question, which WCEE-TV does not. ACSL argues that a distant out-of- state station need not be carried on cable systems which lie beyond the station's Grade B contour. ACSL contends that WCEE-TV has demonstrated no particular nexus between its contemplated "infomercial" programming and the communities in question. With respect to "St. Louis Views," ACSL states that the program is simply listed as "Public Affairs" in the Mount Vernon, Illinois Register-News, and is unknown to ACSL's subscribers because WCEE-TV is not listed in the St. Louis newspaper or the St. Louis edition of TV Guide. In addition, ACSL states that WCEE-TV does not dispute that ACSL carries other stations which provide local coverage, which supports ACSL's claim. Finally, ACSL contends that whatever WCEE-TV's status, its limited viewing taken in the context of all other evidence argues in favor of deleting the communities in question from the station's ADI. ANALYSIS AND DECISION 13. We will grant ACSL's request. We believe that, based upon the four statutory and other relevant factors, ACSL has demonstrated that its systems' communities are sufficiently removed from WCEE-TV that they ought not be deemed part of the station's market for mandatory carriage purposes. 14. 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 ACSL's deletion petition appears to be a legitimate request to redraw ADI boundaries to make them congruous with market realities. 15. Turning to the four-part market modification test set forth in Section 614, we first find that ACSL has met its burden in showing that WCEE-TV does not satisfy statutory factors I and IV. WCEE-TV has no history of carriage in the cable communities, despite having been on the air since 1983. With respect viewing patterns in the cable communities, we note that WCEE-TV has no over- the-air audience in the communities in question. No viewership is reported for WCEE-TV in St. Louis County, Missouri, in which all communities served by ACSL are located. The station's failure to meet these criteria in tandem, in addition to the other factors in this case, support the decision to delete the cable communities at issue. 16. The availability of other broadcasters in the market, the third statutory factor, must be considered in market deletion cases such as this one. Where a cable operator is seeking to delete a station's mandatory carriage rights in certain communities within its ADI, and it is clear that the station is not providing local service to those communities, the issue of local coverage by other stations becomes a factor which we will give greater weight than in cases where a party is seeking to add communities. In the present situation, ACSL's systems carry numerous network affiliated and independent stations that provide coverage of local news and events. 17. With regard to local service, we first find that all of the communities served by ACSL lie well beyond WCEE-TV's Grade B contour. We believe that Grade B contour coverage is an efficient tool to adjust market boundaries in those situations where the other factors do not provide a clear basis for distinguishing market boundaries; that is do not reveal whether particular communities within the larger geographic area involved are properly inside or outside of the station's market for purposes of Section 614(h). The Commission recognized this approach in its Broadcast Signal Carriage Report and Order, when it stated that "to show that the station provides coverage or other local service to the cable communities, 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." While WCEE-TV may use a low power television station to deliver its signal to the cable communities, it presence does not lessen the relevance, in a market modification proceeding, of the principal stations' failure to place a Grade B contour over the subject cable communities. Moreover, the station concedes that even this delivery mode does not guarantee the delivery of a good quality signal under Commission standards. We also find that the station is distant, in terms of mileage and geography, from the cable communities. Mt. Vernon, WCEE-TV's city of license, is on average, 75 miles away from the cable communities. 18. The station's programming, which is also considered under the rubric of local service, does not weigh in WCEE-TV's favor here. Although WCEE-TV asserts that less than half of its air time will be comprised of program-length presentations from national and local businesses and community organizations within two years, the station provides no specific examples of any presentations tailored to the communities in question today. WCEE-TV attempts to show that it does currently provide local programming through its broadcast of "St. Louis Views" and its Sunday evening programming. We do not believe that these programming efforts are of evidentiary significance in this particular case because the current offerings are not specifically tailored to the cable communities at issue. We are unable to base our decision on programming which may or may not be provided at some future date. Consequently we will grant the petition. This decision is supported by the considerable geographic distance between the stations and the cable communities, the lack of Grade B contour coverage over each of the communities, the lack of historical carriage on the cable system at issue, and the lack of audience in the communities served by ACSL. ORDER 19. 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-4848-A) filed October 2, 1996 by Time Warner Entertainment- Advance/Newhouse Partnership, dba American Cablevision of Saint Louis IS GRANTED. 20. This action is taken pursuant to authority delegated by 0.321 of the Commission's Rules. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau