*Pages 1--7 from Microsoft Word - 7067.doc* Federal Communications Commission DA 01- 468 Before the Federal Communications Commission Washington, D. C. 20554 In the Matter of: Corridor Television, L. L. P., and Time Warner Cable For Modification of the Television Market for Station KBEJ( TV), Fredericksburg, Texas ) ) ) ) ) ) ) CSR- 5621- A MEMORANDUM OPINION AND ORDER Adopted: February 20, 2001 Released: February 22, 2001 By the Chief, Consumer Protection and Competition Division, Cable Services Bureau: I. INTRODUCTION 1. Corridor Television, L. L. P., permittee of television station KBEJ- TV, Fredericksburg, Texas (“ KBEJ- TV”), and Time Warner Cable filed the above- captioned joint petition for special relief seeking to modify KBEJ- TV’s television broadcast market. Specifically, Corridor requests that KBEJ- TV’s television broadcast market be modified, for purposes of the television mandatory broadcast signal carriage rules, to include the cable communities in and around San Antonio, Texas that are served by the cable system operated by Time Warner Cable (“ the Cable Communities”). 1 No opposition to this request has been filed. II. BACKGROUND 2. Pursuant to Section 614 of the Communications Act and implementing rules adopted by the Commission in Implementation of the Cable Television Consumer Protection and Competition Act of 1992, Broadcast Signal Carriage Issues (“ Must Carry Order”), 2 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 “designated market area,” or DMA, as defined by Nielsen Media Research. 3 A DMA is a geographic market designation that defines each television market exclusive of 1 See Joint Petition for Special Relief at Exhibit 1. 2 8 FCC Rcd 2965, 2976- 2977 (1993). 3 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, commerical publications which delineate television markets based on viewing patterns. See 47 U. S. C. §534( h)( 1)( C). Until January 1, 2000, Section 76.55( e) of the Commission’s rules provided that Arbitron’s “Areas of Dominant Influence,” or ADIs, published in the 1991- 1992 Television Market Guide,” be used to implement the mandatory carriage rules. Effective January 1, 2000, however, Section 76.55( e) now requires that a commercial (continued….) 1 Federal Communications Commission DA 01- 468 2 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. 4 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. 5 4. 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 new 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. 6 5. The legislative history of the provision states that: where the presumption in favor of [DMA] carriage would result in cable (Continued from previous page) broadcast television station’s market be defined by Nielsen Media Research’s DMAs. For the must-carry/ retransmision consent elections that took place on October 1, 1999, commercial television stations were required to make their elections based on DMAs. See Definition of Markets for Purposes of the Cable Television Broadcast Signal Carriage Rules, Order on Reconsideration and Second Report and Order, 14 FCC Rcd 8366 (1999)(“ Modification Final Report and Order”). 4 For a more complete description of how counties are allocated, see Nielsen Media Research’s Nielsen Station Index: Methodology Techniques and Data Interpretation. 5 47 U. S. C. §534( h)( 1)( C). 6 Must Carry Order, 8 FCC Rcd 2965, 2976 (1993). 2 Federal Communications Commission DA 01- 468 3 subscribers losing access to local stations because they are outside the [DMA] 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 area in 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. 7 6. Recently, in the Modification Final Report and Order, the Commission, in an effort to promote administrative efficiency, adopted a standardized evidence approach for modification petitions that requires the following evidence be submitted: (A) A map or maps illustrating the relevant community locations and geographic features, station transmitter sites, cable system headend locations, terrain features that would affect station reception, mileage between the community and the television station transmitter site, transportation routes and any other evidence contributing to the scope of the market. (B) Grade B contour maps delineating the station’s technical service area and showing the location of the cable system headends and communities in relation to the service areas. Note: Service area maps using Longley- Rice (version 1. 2. 2) propagation curves may also be included to support a technical service exhibit. 8 (C) Available data on shopping and labor patterns in the local market. (D) Television station programming information derived from station logs or the local edition of the television guide. (E) Cable system channel line- up cards or other exhibits establishing historic carriage, such as television guide listings. 7 H. R. Rep. 102- 628, 102d Cong., 2d Sess. 97 (1992). 8 The Longley- Rice model provides a more accurate representation of a station’s technical coverage area because it takes into account such factors as mountains and valleys that are not specifically reflected in a traditional Grade B contour analysis. In situations involving mountainous terrain or other unusual geographical features, Longley- Rice propagation studies can aid in determining whether or not a television station actually provides local service to a community under factor two of the market modification test. 3 Federal Communications Commission DA 01- 468 4 (F) Published audience data for the relevant station showing its average all day audience (i. e., the reported audience averaged over Sunday- Saturday, 7 a. m., or an equivalent time period) for both cable and noncable households or other specific audience indicia, such as station advertising and sales data or viewer contribution records. 9 7. Petitions for special relief to modify television markets that do not include the above evidence shall be dismissed without prejudice and may be re- filed at a later date with the appropriate filing fee. Parties may continue to submit whatever additional evidence they deem appropriate and relevant. 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. 10 III. DISCUSSION 8. The issue before us is whether to grant KBEJ- TV’s and Time Warner’s request to include Time Warner’s cable communities, located in and around San Antonio, Texas. KBEJ- TV is licensed to Fredericksburg, Texas, which is located in Gillespie County, Texas. According to the relevant 1997- 1998 Nielsen DMA Market and Demographic Rank Report (“ 1997- 98 DMA Report”), Gillespie County is assigned to the Austin, Texas DMA. The cable communities are all in the San Antonio, Texas DMA. 9. KBEJ- TV states that although the 1997- 98 Nielsen DMA Report assigned Gillespie County to the Austin, Texas DMA, Nielsen in its latest DMA assignments now considers both Gillespie County and KBEJ- TV to be part of the San Antonio DMA. 11 Finally, KBEJ- TV contends that this reassignment strongly supports modification of KBEJ- TV’s market to include Time Warner’s cable communities. 12 10. Pursuant to Section 76. 55 of the Commission’s rules, we are constrained to affirm the Austin DMA assignment. Until January 1, 2000, Section 76.55( e) of the Commission’s rules provided that Arbitron’s “Areas of Dominant Influence,” or ADIs, published in the 1991- 1992 Television Market Guide,” be used to implement the mandatory carriage rules. 13 Arbitron’s 1991- 1992 Television Market Guide, assigned Gillespie County to the Austin, Texas ADI. 14 Effective January 1, 2000, however, Section 76. 55( e) now requires that a commercial broadcast television station’s market be defined by Nielsen Media 9 47 C. F. R. §76.59( b). 10 8 FCC Rcd 15 2977 n. 139. 11 See Joint Petition at 2, Exhibit 3, citing 1999- 2000 Nielsen DMA Status & County Assignment Changes Report reassigning Gillespie County, Texas to the San Antonio DMA. 12 Joint Petition at 3. 13 47 C. F. R. §76.55( e)( 1). 14 Arbitron 1991- 1992 Television ADI Market Guide, Volume 1 Abilene- Sweetwater- Laredo. 4 Federal Communications Commission DA 01- 468 5 Research’s DMAs. 15 For the must- carry/ retransmission consent elections that took place on October 1, 1999, commercial television stations were required to make their elections based on DMAs specified by Nielsen’s 1997- 98 DMA Report. 16 Nielsen’s 1997- 98 DMA Report also assigned Gillespie County to the Austin, Texas DMA. 17 Gillespie County, and by extrapolation KBEJ- TV, are assigned to the Austin, Texas DMA. 18 Accordingly, we will consider KBEJ- TV’s and Time Warner’s joint petition for modification of KBEJ- TV’s television market pursuant to Section 76. 59 of the Commission’s rules. 19 11. KBEJ- TV contends that, although it is a new station and has no history of carriage on the cable system at issue or information about audience ratings, it is nevertheless entitled to carriage as a local station on the cable system serving the cable communities. 20 In support of its request, KBEJ- TV states that it: (1) provides at least Grade B Contour coverage to all the cable communities; (2) provides programming and other services that focus on the informational needs of the residents of these communities; (3) has been carried on the cable system serving the cable communities as of October 28, 2000, pursuant to a retransmission consent agreement between KBEJ- TV and Time Warner Cable; and (4) is assigned to the same DMA as the cable communities at issue. 12. With respect to the mandatory statutory criteria, we have carefully reviewed the information provided by KBEJ- TV in the context of its request. An analysis of this evidence, as it relates to each factor, is provided below. 13. Historic Carriage. KBEJ- TV began operations on August 3, 2000. Because KBEJ- TV has been operating for less than one year, it cannot demonstrate a history of carriage on the Time Warner cable system. Given the statutory directive, consideration must be given to this factor, bearing in mind that the objective of the Section 614( h) process is to “better effectuate the purposes” of the broadcast signal carriage scheme. However, since KBEJ- TV only began broadcasting in August 2000, it would not have a history of carriage. The historic carriage factor should not be given significant weight under these circumstances because such an interpretation of the 1992 Cable Act would, in effect, prevent new stations from ever being carried. 21 14. Viewership. KBEJ- TV also has no information about audience ratings due to the fact that 15 47 C. F. R. §76.55( e)( 2). 16 47 C. F. R. §76.55( e)( 2)( i); Modification Final Report and Order, 14 FCC Rcd 8366 (1999). 17 Joint Petition at 2, Exhibit 4. 18 The applicable DMA list for the 2002 election pursuant to §76.64( f) will be the DMA assignments specified in the 2000- 2001 list, and so forth for each triennial election pursuant to §76.64( f). 47 C. F. R. §76.55( e)( 2)( ii). 19 It is worth noting that if the cable communities, Gillespie County and KBEJ- TV were all assigned to the San Antonio DMA, the instant petition would be moot. KBEJ- TV would be entitled to assert mandatory carriage rights on cable systems located within the station’s market. A station’s market for this purpose is its DMA, as defined by Nielsen Media Research. Must Carry Order, 8 FCC Rcd 2965, 2976- 2977. 20 Joint Petition at 2. 21 Paragon Cable, 10 FCC Rcd. 9462, 9466 (1995). 5 Federal Communications Commission DA 01- 468 6 it is a new station. 22 The Commission, however, has acknowledged that it can take up to three years for a station to establish viewing patterns. 23 Accordingly, other evidence of the station’s local market may be relied upon to determine whether a particular community or communities should be added to its market. 24 In this case, KBEJ- TV’s assignment, its carriage on the cable system serving the cable communities, and its programming and provision of other local service to the communities provides evidence of the station’s relationship to the local market. 15. Grade B Coverage/ Local Service. A station’s local service to cable communities is one of the relevant factors to consider in this particular case. The type or age of the station involved or historical carriage does not influence it. A station’s broadcast of local programming, which has a distinct nexus to the cable communities, is also evidence of local service. Finally, a station’s Grade A or Grade B contour coverage is an additional indicator of local service and we will weigh the presence or absence of such technical coverage accordingly. 25 In the instant proceeding, KBEJ- TV satisfies the local coverage elements we find important in the market modification analysis by airing programming considered “local” to the cable communities at issue. 26 In addition, the cable communities are within KBEJ- TV’s Grade B contour. 27 16. After considering the statutory factors in the context of the circumstances presented here, as well as other relevant information, we grant KBEJ- TV and Time Warner Cable’s joint modification request. According to the legislative history of the 1992 Cable Act, the use of [DMA] market areas is intended “to ensure that television stations be carried in the areas which they service and which form their economic market.” 28 Changes may be sought and granted by the Commission “to better effectuate the purposes” of the mandatory carriage requirements.” 29 Given KBEJ- TV’s Grade B contour coverage, its carriage on the cable system serving the cable communities, its programming and provision of other local service to the communities, and Nielsen’s assignment to the San Antonio DMA beginning July 1, 2000, we 22 Joint Petition at 4. 23 DeSoto Broadcasting, Inc. 10 FCC Rcd 4491, 4494 (1995). 24 Id. 25 As a general matter, Grade B coverage demonstrates service to cable communities and serves as a measure of a station’s natural economic market. See Must Carry Order, 8 FCC Rcd at 2977. See also Amendment of Section 76.51 (Orlando- Daytona Beach- Melbourne, and Cocoa, Florida), 102 FCC 2d 1062, 1070 (1985)(“ We believe that television stations actually do or logically can rely on the area within their Grade B contours for economic support.”). 26 KBEJ- TV has a five year agreement to broadcast the San Antonio Spurs NBA basketball games, has aired Big 12 football games featuring teams from Texas, and airs a wide range of public service announcements benefiting the San Antonio Youth Center, San Antonio Parks and Recreation, San Antonio MS Foundation, San Antonio ADA Chapter and Rotary Club Scholarships for the University of Texas, San Antonio. See Joint Petition at 6- 7, Exhibits 8- 9. 27 Id., at 4- 5, Exhibit 5. 28 H. R. Rep. 102- 628, 102d Cong., 2d Sess. 97- 98 (1992). 29 47 U. S. C. §534( h). 6 Federal Communications Commission DA 01- 468 7 conclude that modifying KBEJ- TV’s market to include the cable communities at issue would “better effectuate” the purposes of Section 614 of the Communications Act. IV. ORDERING CLAUSES 17. Accordingly, IT IS ORDERED, pursuant to Section 614( h) of the Communications Act of 1934, as amended (47 U. S. C. §534) and Section 76.59 of the Commission’s rules (47 C. F. R. §76.59), that the captioned joint petition for special relief filed by Corridor Television, L. L. P. and Time Warner Cable IS GRANTED. 18. This action is taken pursuant to authority delegated by Section 0.321 of the Commission’s rules. 30 FEDERAL COMMUNICATIONS COMMISSION Deborah Klein, Chief Consumer Protection and Competition Division Cable Services Bureau 30 47 C. F. R. §0.321. 7