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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 Matter of Petition of ) ) Time Warner Entertainment - Advance/ ) CSR 4863-A Newhouse Partnership, dba Time Warner Cable ) ) For Modification of Market of ) Station WWTO-TV, La Salle, Illinois ) MEMORANDUM OPINION AND ORDER Adopted: March 11, 1997 Released: March 14, 1997 By the Deputy Chief, Cable Services Bureau: I. INTRODUCTION 1. Time Warner Entertainment - Advance/Newhouse Partnership, dba Time Warner Cable ("Time Warner Cable") filed a petition pursuant to Sections 76.7(a) and 76.59(a) of the Commission's rules requesting that the communities in Cook County, Illinois served by its cable system ("the Communities") be excluded from the television market of station WWTO-TV, La Salle, Illinois. All American TV, Inc., dba All American Network ("All American"), licensee of WWTO-TV, filed an opposition to the petition, and Time Warner Cable filed a reply. II. BACKGROUND 2. Pursuant to Section 614 of the Communications Act of 1934, as amended by the 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, commercial television broadcast stations are 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. The Commission is also directed to consider changes in market areas. Section 614(h)(1)(C) further 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, Section 614(h)(1)(C)(ii) 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 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. 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. III. MARKET FACTS AND ARGUMENT 6. Time Warner Cable asserts in the market modification petition that WWTO-TV has never been carried on its cable system, that WWTO-TV is located geographically distant (approximately 65 to 70 miles) from the headends of its cable system serving the Communities in Cook County, Illinois, and that WWTO-TV fails to provide a Grade B signal over any portion of the Communities. Time Warner Cable also asserts that WWTO-TV fails to broadcast any programming of specific local interest to the Communities, and fails to achieve any significant viewing audience in the Communities. Time Warner Cable contends that WWTO-TV's all day May 1996 viewing in the Chicago DMA, Sunday-Saturday, was rated 0.1, as reported by Nielsen DMA Daypart viewing data for the Chicago DMA. According to Time Warner Cable, WWTO-TV's programming line-up consist exclusively of 30 minute and one hour religious programs interspersed with longer blocks of "Praise the Lord," with nothing indicating that WWTO-TV engages in any local news or public affairs programming directed toward either its city of license or the Communities in particular. 7. Time Warner Cable asserts further that its cable system carries numerous other television stations that provide coverage of news and issues of concern to the Communities served by its cable system. Time Warner Cable provided copies of print sources of television listings for the Chicago, Illinois area, which do not contain WWTO-TV among station listings. For those reasons, Time Warner Cable contends the Communities served by its Cook County cable systems are beyond the scope of WWTO-TV's natural market, in terms of signal coverage and programming of particular appeal or interest to Time Warner Cable's subscribers. Time Warner Cable argues that, where a television station is separated by large distances from a community served by a cable system and fails to provide local service to that community, settled precedent requires that the distant communities be deleted from the station's market for must-carry purposes. Time Warner Cable asserts that the factual market information presented supports grant of the petition for special relief. 8. All American, in response, argues that WWTO-TV's market should not be modified. Addressing the first of four market modification factors listed in Section 614(h)(1)(C)(ii) (historic carriage), All American concedes that WWTO-TV has not been carried on Time Warner Cable's cable system. However, All American asserts that lack of carriage of WWTO-TV should not be used as a basis for granting the petition. Regarding the second factor (coverage and local service), All American does not dispute that WWTO-TV is located from 65 to 70 miles from the Communities. All American argues that geographic distance should not be considered as a factor supporting grant of the petition, contending that the Commission, instead, should adhere to the scope of station markets established by audience research reported in Arbitron's 1991-1992 Television Market Guide, as provided in Commission regulations. 9. With regard to the third factor (programming to cover issues and events of interest to the community), All American contends that WWTO-TV's programming format provides a valuable and effective platform for local ministries and other service organizations, and provides a means for local community organizations to communicate and provide information to residents of Chicago. All American argues that Time Warner Cable should not receive credit for carriage of other stations' programming as an alternative to that of WWTO-TV. All American urges in this connection that exclusion of the cable system from a station's market area is not justified by the fact that benefits are provided by other stations carried on the cable system. All American presented the May 1996 Nielsen Station Index for Chicago, which shows that WWTO-TV enjoys a net weekly circulation of 1.0, a significant viewership, according to All American, for an independent station on the Chicago market. All American further contends that the Commission has rejected the argument that limited viewing must be weighed in favor of market modification, on the grounds that the Commission deems "specialty" stations, such as WWTO-TV, to be capable of offering desirable diversity of programming, although they attract typically limited audiences. 10. In reply, Time Warner Cable reiterates that WWTO-TV has never been carried on its cable systems in the Communities and that WWTO-TV's Grade B signal does not cover any portion of the Communities. Time Warner Cable further reemphasizes that WWTO-TV provides no programming particularly directed toward the Communities. It also contends that WWTO-TV has virtually no measurable audience share in the Chicago market and requests rejection of All American's claim of a net weekly circulation of 1.0 as merely an estimate and on the grounds that no verification by affidavit or declaration is provided. Time Warner Cable also argues that a television station's ADI as defined by Arbitron is a station's presumed market, a presumption which may be rebutted under criteria relevant to the four factor test established by Section 614(h)(1)(C) of the Communications Act. Application of the four factor test here, according to Time Warner Cable, justifies deletion of the Communities from the market of WWTO-TV. IV. DISCUSSION AND ANALYSIS 11. WWTO-TV is a UHF commercial television station licensed to operate on Channel 35 at La Salle, Illinois. It is located in the Chicago ADI, from 65 to 70 miles from the headends of Time Warner Cable's cable system serving the Communities. Time Warner Cable provides cable services in the Communities, which are also located in the Chicago ADI. Time Warner Cable requests that the Communities be deleted from WWTO-TV's television market. A. Historic Signal Carriage; Station Coverage of Communities 12. WWTO-TV has not historically been carried on Time Warner Cable's cable system at issue here. We reject All American's argument that absence of carriage should not be considered significant in this case. WWTO-TV has been on the air since 1986. In that time it has never been carried on Time Warner Cable's cable system serving the relevant communities. The Congress intended for a station's history of carriage prior to adoption of the 1992 Act to be given weight in the ADI modification process. The fact that WWTO-TV has not historically been carried on Time Warner Cable's cable system serving the Communities is probative and, while not decisional, will be taken into consideration as a factor in favor of the requested market modification. Additionally, WWTO-TV is located from 65 to 70 miles from the Communities and does not provide a Grade B contour signal over any portion of the relevant communities. Although not conclusive of themselves, these factors strongly suggest that the relevant communities are not a part of WWTO-TV's market. B. Programming Specifically For Communities Served by Cable System 13. We also reject All American's contention that WWTO-TV should be credited for providing coverage of issues and events of interest and concern to the Communities by virtue of its programming. All American presented nothing to show that its programming contained any content directed other than toward its audience in general. More particularly, nothing demonstrates in the record that WWTO-TV's programming is directed toward the Communities at issue here. It appears that WWTO-TV's programming consists almost entirely of syndicated programming. The program format described there provides All American with no credit for programming specifically for the communities served by Time Warner Cable. WWTO-TV's failure to provide programming designed to serve the Communities in particular provides additional weight toward granting this market modification petition. C. Station Audience in Communities Served by Cable System 14. In addition to the fact that WWTO-TV has not been carried on Time Warner Cable's cable system, the available audience viewing data shows at best minimal viewing of WWTO-TV in the Chicago, Illinois ADI. With respect to the subject communities served by Time Warner Cable's cable system, we note that the Nielsen Station Index does not show any audience for WWTO-TV. In fact, the Nielsen Station Index does not include WWTO-TV in the listing of stations serving that market. The absence of viewership of WWTO-TV's is consistent with the fact that its Grade B contour does not come close to reaching the Communities, and WWTO-TV and the relevant communities are some 65 to 70 miles apart. D. Summary 15. Section 614(h)(1)(C) of the Communications Act requires the Commission to include or exclude particular communities from a television station's market for the purpose of ensuring that a television station is carried in the areas which it serves and which form its economic market. We believe that the requested exclusion of the Communities served by Time Warner Cable's cable system from WWTO-TV's television market will better effectuate the purposes of the must-carry statutory provisions. In reaching this conclusion, we have considered the statutory factors under which the value of WWTO-TV to community localism is to be tested and found it to be lacking. Local television guides in the Chicago, Illinois area contain no listing for WWTO-TV. WWTO-TV has at best a minimal viewing presence in the Chicago, ADI as a whole, and the communities are located approximately 65 to 70 miles from WWTO-TV. Furthermore, the station has never been carried on the cable system in question, offers no programming specifically for the relevant communities, and provides no over-the air signal coverage of the Communities. For the foregoing reasons, we find that grant of Time Warner Cable's petition is in the public interest. V. ORDER 16. Accordingly, IT IS ORDERED, pursuant to 614(h)(1)(C) of the Communications Act of 1934, as amended, 47 U.S.C. 534(h)(1)(C), and 76.59 of the Commission's Rules, 47 C.F.R. 76.59, that the petition for special relief filed on November 5, 1996 by Time Warner Entertainment - Advance/Newhouse Partnership, dba Time Warner Cable in File No. CSR 4863-A IS GRANTED. 17. This action is taken pursuant to authority delegated by Section 0.321 of the Commission's Rules, 47 C.F.R. Section 0.321. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau