*Pages 1--6 from Microsoft Word - 12252.doc* Federal Communications Commission DA 01- 2440 Before the Federal Communications Commission Washington, D. C. 20554 In the Matter of: BBC License Subsidiary, L. P. For Modification of the Bakersfield, California ADI ) ) ) ) ) ) CSR- 3948- A ORDER ON RECONSIDERATION Adopted: October 16, 2001 Released: October 19, 2001 By the Deputy Chief, Cable Services Bureau: I. INTRODUCTION 1. BBC License Subsidiary, L. P., licensee of Station KBAK- TV (ABC, Channel 29), Bakersfield, California (“ KBAK- TV”), filed a petition for reconsideration of the Cable Services Bureau’s decision partially granting its market modification request. 1 KBAK- TV is requesting that the Bureau reverse its decision with regard to the communities of Tulare and Visalia, California. Continental Cablevision of Sierra Valleys, Inc. (“ Continental”) filed an opposition to the petition for reconsideration and KBAK- TV filed a reply. 2 II. BACKGROUND 2. Section 614( h)( 1)( C)( i) of the Communications Act authorizes the Commission to add communities to, or delete communities from a television station's market "to better effectuate the purposes of this section.” 3 A detailed description of these market modification provisions and the Commission's related regulations are set forth in the Bureau Order. 4 1 Burnham Broadcasting Company, 10 FCC Rcd 7117 (1995)(“ Bureau Order”). 2 In addition, Retlaw Enterprises, Inc., licensee of Station KJEO- TV, Fresno, California, which was an opposing party to KBAK- TV’s petition for special relief, filed a letter supporting Continental’s statements in opposition to the petition for reconsideration. 3 See 47 U. S. C. §534( h)( 1)( C)( i). 4 Section 614( h)( 1)( C) of the Communications Act, as amended by the Telecommunications Act of 1996, provides that a station’s market shall be determined by the Commission by regulation or order using, where available, commercial publications which delineate television markets based on viewing patterns. See 47 U. S. C. §534( h)( 1)( C). Section 76.55( e) requires that a commercial broadcast television station’s market be defined by Nielsen Media Research’s designated market areas (“ DMAs”). See Definition of Markets for Purposes of the Cable Television Broadcast Signal Carriage Rules, Order on Reconsideration and Second Report and Order, 14 (continued…) 1 Federal Communications Commission DA 01- 2440 2 3. In its request for modification, KBAK- TV sought to include within its market for must carry purposes the communities of Tulare, Visalia, and Porterville, located in Tulare County, California, and Corcoran, located in Kings County, California. At the time of the Bureau Order and prior to the Commission’s changeover from the use of Arbitron’s areas of dominant influence (“ ADIs”) to Nielsen’s DMAs, KBAK- TV was located within the Bakersfield, California ADI and the subject communities located in the Fresno- Visalia, California ADI. The Bureau Order granted KBAK- TV’s request with regard to the community of Porterville, California, but denied the inclusion of Tulare and Visalia because, except for the historic carriage factor, KBAK- TV failed to meet the market modification criteria. 5 The Bureau Order also denied the inclusion of the community of Corcoran because KBAK- TV failed to meet any of the statutory factors. That community, however, is not a part of this proceeding. III. DISCUSSION 4. In support of its petition, KBAK- TV contends that the Bureau Order erred in its decision not to include the communities of Tulare and Visalia, California. 6 KBAK- TV argues that it serves these communities and that they are an important part of its economic market. 7 KBAK- TV states that Section 534 of the Communications Act of 1934, as amended, plainly states that the Commission “shall afford particular attention to the value of localism. . .” 8 In addition, KBAK- TV states that the legislative history of the 1992 Cable Act directs the Commission to lend particular deference to evidence of long- standing service to local communities. 9 KBAK- TV submits, however, that the Bureau Order misapplied the market modification test and failed to afford particular attention to the value of localism. 10 KBAK- TV asserts that the statutory test of Section 534 is not a conjunctive test and it was a legal error for the Bureau to so construe it. 11 5. KBAK- TV argues that the Bureau Order erred in finding that KBAK- TV did not provide a Grade B signal to Tulare and Visalia. 12 KBAK- TV submits a declaration from a consulting engineering firm which states that the communities of Tulare and Visalia receive a Grade B signal from KBAK- TV. 13 KBAK- TV contends that the Bureau Order also erred in finding that KBAK- TV did not provide local programming to the communities. 14 KBAK- TV maintains that it submitted substantial evidence of programming which was responsive to the needs and interests of Tulare and Visalia’s residents. However, KBAK- TV states that the Bureau Order found this evidence “not sufficiently specific to determine whether (… continued from previous page) FCC Rcd 8366 (1999)(“ Modification Final Report and Order”). 5 Bureau Order, 10 FCC Rcd at 7120. 6 Petition at 5. 7 Id. 8 47 U. S. C. §534. 9 Pub. L. No. 102- 385, 106 Stat. 1460 (1992). 10 Petition at 5. 11 Petition at 6. 12 Id. 13 Id. at Exhibit A. 14 Id. at 6. 2 Federal Communications Commission DA 01- 2440 3 it truly addresses issues of interest and concern to the residents.” 15 KBAK- TV contends that this is an impossible standard to meet and that the Bureau should not make judgments about whether a station’s programming is “truly” responsive to matters of concern to local residents; it is enough that the programming is responsive. 16 In this regard, KBAK- TV states that it has provided signed petitions by the residents of Tulare and Visalia relating to content of certain programming provided by the station, as well as several letters from viewers. 17 6. Finally, KBAK- TV argues that the Bureau Order erred in concluding that KBAK- TV was not widely viewed in Tulare County, where the communities are located, in comparison to the communities’ in- market ABC affiliate. 18 KBAK- TV asserts that the issue is whether a significant number of persons in the subject communities watch its programming, not whether a larger number of persons watch a competing affiliate. 19 KBAK- TV states that Section 76.5( i) of the Commission’s rules establishes that if a network station achieves shares of 3 percent of total viewing hours and 25 percent net weekly circulation it is deemed to be significantly viewed. 20 KBAK- TV argues that with shares of 4 percent of total viewing hours and 34 percent net weekly circulation in Tulare County, it is clearly significantly viewed. 21 KBAK-TV states that the Bureau’s failure to use the significantly viewed status set forth in the Commission’s rules represents a departure from pre- existing agency policy. 22 7. In opposition, Continental incorporates by reference the opposition it filed to KBAK- TV’s modification petition which set out in detail why KBAK- TV’s request to include the communities of Tulare and Visalia should be denied. 23 Continental states that, in its instant petition, KBAK- TV is essentially arguing that the Bureau was “arbitrary and capricious” in not automatically granting its market expansion. However, Continental states that while the statutory requirements allow the Commission to consider modification requests, that does not mean that any evidence of local coverage automatically warrants a grant to include additional communities. 24 Continental maintains that the Bureau was fully justified in concluding that KBAK- TV did not meet the market modification factors for Tulare and Visalia. 25 8. Continental argues that KBAK- TV’s evidence as to new programming is very weak. Continental points out that KBAK- TV, instead of defending the quality or quantity of its “local” programming, limits its evidence to correspondence from Visalia and Tulare residents concerning nationally 15 Bureau Order, 10 FCC Rcd at 7120. 16 Petition at 6. 17 Id. at Exhibit B. 18 Id. at 7. 19 Id. 20 47 C. F. R. §76.5( i). 21 We note that KBAK- TV’s significantly viewed status was established by its inclusion in Appendix B to the Reconsideration of the Cable Television Report and Order, 26 FCC 2d 326 (1972). 22 See Greater Boston Television Corp. v. FCC, 444 F. 2d 841, 852 (D. C. Cir. 1970), cert. denied. 403 U. S. 923 (1971). 23 Opposition at Exhibit A. 24 Id. at 2- 3. 25 Id. at 3. 3 Federal Communications Commission DA 01- 2440 4 distributed programs. 26 Although KBAK- TV argues that this evidence, in conjunction with its viewership data, proves that there is interest in its programming, Continental notes that this correspondence is extremely limited in size and scope and KBAK- TV’s ratings still pale in comparison to the ratings of many closer Fresno market stations. 27 Continental states that, from this evidence, one can only conclude that KBAK- TV’s local programming is minimal. Continental states that when it dropped KBAK- TV’s signal in 1993 it only received 56 subscriber complaints in the 10- week period following its deletion. 28 In any event, Continental argues that KBAK- TV’s new programming evidence reveals that the station misunderstands “the value of localism” upon which it professes to rely. Continental points out that the correspondence KBAK- TV presents does not concern locally- originated programming at all, or even programming of special interest to the residents of the subject communities, but nationally- televised programming. 29 9. Continental argues that KBAK- TV’s engineering evidence is also flawed. Continental states that KBAK- TV presents an engineering analysis, based on the TIREM propagation method, which purports to show that KBAK- TV’s Grade B contour encompasses the communities. However, Continental points out that KBAK- TV fails to provide sufficient detail for either the Bureau or Continental to assess the accuracy of the engineering analysis presented. 30 Continental states that modification cases, by definition, require factual balancing and specific detail. 10. Continental argues further that because its system is channel- locked, a ruling in KBAK-TV’s favor would require the system to drop an existing programming choice. 31 Continental asserts that there is an insufficient government interest to justify this intrusion on Continental’s First Amendment rights. Continental points out that it already carries a host of Fresno market stations on its systems. 32 Continental argues that Tulare and Visalia cannot be described as an integral part of KBAK- TV’s market or critical to the station’s viability, as the station claims. 33 Continental states that the communities are not even immediately adjacent to KBAK- TV’s market. Indeed, since they are approximately 36 miles from the market boundary, Continental argues that this is not even a situation where the communities are “on- the-fringe” of the market. 34 11. In reply, KBAK- TV states that, instead of focussing on the station’s significantly viewed status, Continental focuses almost exclusively upon the supplemental viewer data provided, most notably viewer letters concerning the proposed airing of a network program and KBAK- TV’s decision not to air a particular episode. 35 KBAK- TV asserts that Continental’s argument is predicated on a fundamental factual misunderstanding. First, KBAK- TV states that it has indeed televised this program since its origins. 26 Id. 27 Id. at 4. 28 Id. 29 Id. Continental notes that the correspondence apparently applauds the station for programming which it is not carrying. Id. 30 Id. at 5. 31 Id. 32 Id. 33 See Turner Broadcasting System, Inc., v. FCC, 114 S. Ct. 2445, 2468 (1994). 34 Opposition at 7. 35 Reply at 3. 4 Federal Communications Commission DA 01- 2440 5 Second, KBAK- TV states that, rather than prove minimal viewership, the fact that large numbers of Tulare and Visalia residents contacted KBAK- TV with their opinions highlights the station’s strong viewership in the area. 36 Finally, KBAK- TV argues that previous Bureau decisions found that the “localism” test of Section 534 of the Act was satisfied upon proof of less than all four modification criteria, with historic carriage and viewership being of predominant significance. 37 12. In granting the Commission authority to modify ADI and/ or DMA markets, Congress did not intend for the Commission to alter the basic concept of exclusive market structures based upon ADI criteria. Rather, our waiver process was intended to be used to better reflect present economic market conditions. 38 With regard to the communities of Tulare and Visalia, the Bureau Order found that KBAK-TV met the first criterion regarding historic carriage, but failed to meet any of the other factors. KBAK-TV initially argued that its long- standing historic service to the subject communities should be found to meet the localism standard espoused by both the Communications Act and the 1992 Cable Act. However, while historic carriage is entitled to considerable weight, it does not, by itself, demonstrate that a change in a market boundary is warranted. 39 13. KBAK- TV has also argued that the Bureau erred in determining that KBAK- TV did not meet the other statutory factors. We find nothing in the information presented by KBAK- TV, however, to overturn our original opinion. First, with regard to local programming, we do not find the petitions and letters from Tulare and Visalia residents provided by KBAK- TV to be sufficient to carry the burden of proof with regard to this factor. Moreover, despite KBAK- TV’s assertions, it is the responsibility of the Bureau in reviewing market modifications requests, among other things, to determine whether a station meets the local programming criterion. Such determination is based on examples of a station’s programming which clearly show the provision of locally- originated news and stories which are of interest and concern to the residents. In this instance, KBAK- TV has not provided such information. Second, with regard to Grade B coverage, we note that the engineering information KBAK- TV has provided is based on the TIREM propagation method. In determining a station’s technical coverage in relation to local coverage in market modification cases, the Commission has typically relied on propagation studies using standard methodology established in Section 73. 684 of the Commission’s rules. 40 More recently, the Commission has accepted the use of Longley- Rice propagation studies which take geographic terrain into consideration in the determination of Grade B coverage. 41 However, the Commission has not addressed or accepted the probity of the TIREM propagation method in any market modification case to determine technical service nor has it endorsed it as a means for determining such service. We therefore decline to consider the TIREM study provided by KBAK- TV in this matter. As a result, KBAK- TV has failed to demonstrate that it places a Grade B contour over the subject communities. 36 Id. at 4. 37 See e. g., Multimedia WMAZ, Inc., 10 FCC Rcd 8784 (1995); Multimedia WMAZ, Inc., 10 FCC Rcd 8781 (1995); WOWT- TV, 10 FCC Rcd 5573 (1995); and North Platte Television, Inc., 10 FCC Rcd 4371 (1995). 38 See SVHH Cable Acquisition, L. P. d/ b/ a Adelphia Cable Communications, 11 FCC Rcd 5653 (1996), recon. denied, 15 FCC Rcd 14746 (2000). 39 Given our conclusions below that KBAK- TV continues to fail to meet the remaining modification criteria, we find the cases cited by KBAK- TV in support of its localism position to be misplaced. In all but one case, the station involved met at least three factors, while the fourth case met all four. Moreover, two cases did not involve a competing network affiliate. 40 47 C. F. R. §73.684. See also Channel 39, Inc., 13 FCC Rcd 3108, 3116 (1998). 41 See Paxson Atlanta License, Inc., 13 FCC Rcd 20087 (1998). 5 Federal Communications Commission DA 01- 2440 6 14. Third, with regard to viewership, the fourth market modification criteria requires that “evidence of viewing patterns in cable and noncable households within the areas served by the cable system or systems. . .” be provided. 42 KBAK- TV has argued that the Bureau Order overlooked the fact that it is a significantly viewed station in Tulare County and thus erred in claiming that it did not meet the viewership factor. While evidence of significantly viewed status is certainly of note, the fourth modification criterion requires viewership data based on both cable and noncable households. Significantly viewed status is based solely on noncable households and, as a result, cannot be relied on as the sole measure of a station’s viewership in modification cases. 43 The viewership information which is of more relevance in modification proceedings is the viewership data prepared by an accredited organization such as A. C. Nielsen. While, ideally, the viewership data should only reflect the actual communities involved in the modification request, we generally accept the county- wide information distributed by Nielsen as sufficient to meet this requirement. In this regard, we note that Nielsen’s 2000 Nielsen County/ Coverage Study indicates that, in Tulare County, KBAK- TV achieves a 2 percent share of total viewing hours and a net weekly circulation of 22 percent. 44 In comparison, KFSN- TV, the Fresno market ABC affiliate, achieves a 12 percent share of total viewing hours and a net weekly circulation of 63 percent. As stated in the Bureau Order, “KBAK-TV’s numbers, when compared with those of other stations in . . . Tulare [County], do not show that its viewership in cable and noncable homes . . . rises to a level which demonstrates that the communities therein form part of KBAK- TV’s economic marketplace.” 45 Finally, we note that in this instance, the communities of Visalia and Tulare are already served by their own Fresno market ABC affiliate, KFSN-TV, which is geographically closer than KBAK- TV to the subject communities. 15. In view of the foregoing, we do not believe that the change requested would “better effectuate the purposes” of the mandatory broadcast signal carriage requirements. We therefore decline to overturn the original Bureau decision. IV. ORDERING CLAUSES 16. Accordingly, IT IS ORDERED, pursuant to Sections 1, 4( i), 5( c), 405, and 614( h)( 1)( C) of the Communications Act of 1934, as amended, 47 U. S. C. §§ 151, 154( i), 155( c), 405, 534( h)( 1)( C), that the captioned petition for reconsideration IS DENIED. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau 42 47 U. S. C. §534( h)( 1)( C)( ii). 43 47 C. F. R. §76.54. 44 While these percentages are less than the established 3/ 25 percentages required for a network station to be considered significantly viewed, this in no way relinquishes KBAK- TV’s significantly viewed status in Tulare County. A station’s significantly viewed status is based on its first three years of operation and once it has been established, it does not lose that status even if its viewership should later decline. 45 Bureau Order, 10 FCC Rcd at 7120. 6