11 FCC Red No. 7 Federal Communications Commission Record DA 96-339 Before the Federal Communications Commission Washington, D.C. 20554 In re: Federal Broadcasting Company CSR-3866-A Kirksville, Missouri For Modification of Station KTVO's ADI MEMORANDUM OPINION AND ORDER Adopted: March 7, 1996; Released: March 22, 1996 By the Deputy Chief, Cable Services Bureau: INTRODUCTION 1. Federal Broadcasting Company, licensee of Station KTVO (ABC, Channel 3), Kirksville, Missouri, has filed a "Petition for Special Relief" seeking to include within the Ottumwa, Iowa-Kirksville, Missouri "area of dominant in- fluence" all the cable communities in the two Iowa Coun- ties of Appanoose' and Wapello,2 as well as the in the four following Missouri Counties: Knox,3 Linn,4 Lewis5 and Scot- land.6 KTVO's petition is unopposed. BACKGROUND 2. Pursuant to §614 of the Communications Act and implementing rules adopted by the Commission in its Re- port and Order in MM Docket 92-259,' commercial televi- sion 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.8 An ADI is a geographic market designation that defines each television market ex- clusive 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.9 3. Under the Act, however, the Commission is also di- rected to consider changes in ADI areas. Section 614(h)(1)(C) provides that the Commission may: with respect to a particular television broadcast sta- tion, include additional communities within its tele- vision market or exclude communities from such station's television market to better effectuate the purposes of this section. the Commission shall afford particular attention to thep 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 eli- gible to be carried by a cable system in such commu- nity in fulfillment of the requirements of this section provides news coverage of issues of concern to such community or provides carriage or coverage of sport- ing 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.t° 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 con- sistent with Congress' objective to ensure that televi- sion stations be carried in the areas which they serve and which form their economic market. In considering such requests, the Act provides that: l Moulton, Centerville, Cincinnati, Moravia, and Mystic are the communities specified by petitioner in this County.2 The communities listed by petitioner in this County are Ottumwa, Eldon, Agency, Eddyville, and Blakesburg. The communities designated by petitioner in this County are Baring, Hurdland, Knox City, and Edina. ' The communities given by petitioner are Marceline. Laclede, Meadville, Brookfield, Linneus, Purdin, and Bucklin. The communities listed by petitioner are as follow: Durham, Maywood, Monticello,. Ewing, Canton, LaGrange, LaBelle, and Lewiston. 6 Memphis and Gorin are the communities given by petitioner in this County. 8 FCC Rcd 2965, 2976-2977 (l993).n 8 Section 76.55(e) of the Commission's Rules provides that the ADls to be used for purposes of the initial implementation of the mandatory carriage rules are those published in Arbitron's 1991-1992 Television Market Guide. ' Because of the topography involved, certain counties are divided into more than one sampling Unit. Also, in certain circumstances, a station may have its home county assigned to an ADI even though it receives less than a preponderance of the audience in that county. For a more complete description of how counties are allocated, see Arbitron's Description of Meth- odology. ' Communications Act of 1934, as amended, §6l4(h)(l)(C)(ii), 47 U.S.C. §534(h)(l)(C)(ii). 3567 DA 96-339 Federal Communications Commission Record 11 FCC Red No.7 [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 13 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 fac- tor concerns viewing patterns in the cable commu- nity in cable and noncable homes. Audience data clearly provide appropriate evidence about this fac- tor. 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 house- holds, such surveys may need to be supplemented with additional data concerning viewing in cable homes. 12 6. In adopting rules to implement this provision, the Commission indicated that changes requested should he 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 ap- plicable in common to all stations in the market.'3 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 market area change request.'4 7. Adding communities to a stations market area gen- erally 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 its activated channel capacity to compliance with the mandatory signal carriage obligations, 2) the station is responsible for delivering a l-I.R. Rep. No. 628, lO2d Cong., 2d Sess. 97 (1992). ' 8 FCC Rcd at 2977 (emphasis in original). ' 8 FCC Rcd at 2977 n.139. Viewership data cited herein is county data, rather than community-specific data. However. absent evidence that such data is not fairly reflective of viewingin the actual communities in question, we accept such data as 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 sys- tem 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 signals of more than one local station affiliated with a particular broadcast net- work. If, pursuant to these requirements, a system operator elects to carry the signal of only a single affiliate of a broadcast network, it is obliged to carry the affiliate from within the market whose city of license is closest to the principal headend of the cable system.'5 Accordingly, based on the specific circumstances involved, the addition of communities to a station's market area may guarantee it cable carriage and specific channel position rights; simply provide the system operator with an expanded list of must- carry signals from which to choose, i.e., when it has used up its channel capacity mandated for broadcast signals carriage, or determined which of duplicating network affili- ated stations are entitled to carriage priority. MARKET FACTS AND PETITIONERS' ARGUMENTS 8. KTVO has been recognized as significantly viewed in all six of the counties listed,'6 and five of the six counties border the Ottumwa-Kirksville, AD!. Both Appanoose and Wapello are adjacent to its northwestern border, while both Knox and Scotland are on its eastern border. Linn is on the ADI's southwestern border, and Lewis is adjacent to Knox's western border. With one exception, Meadville its Linn County, Missouri, the relevant communities in each of the Counties designated are all within KTVO's Grade B contour, and its Grade A contour covers all of the specified communities in Scotland County, as well as a significant portion of those listed in Knox, Appanoose, and Wapello Counties. The designated Iowa communities in Wapello and Appanoose Counties are all currently assigned to the Des Moines, Iowa ADI, while the Missouri communities listed in Linn County are in the Kansas City, Missouri AD!, and the remaining Missouri communities in Knox, Lewis, and Scotland Counties are all presently part of theQuincy, Illinois-Hannibal, Missouri ADI. 9. In support of its petrtion, KTVO states that it has been carried by all the cable systems serving the designated communities in all six counties at least since 1988, when the station was acquired by Federal Broadcasting Company. With respect to the communities in Appanoose County, KTVO notes that between April 1, 1991 and May 18, 1993, it aired some 725 stories concerning events that occurred in communities located there, and that more than twenty local businesses now advertise on the station. KTVO adds that since the stations licensed to the Des Moines AD! actually are located some sixty miles from those in Appanoose County, it is not surprising that they seldom cover issues of concern to County residents or broadcast sporting or other events of local interest. KTVO also notes probative in cases of this type. ' 47 C.F.R. §76.59. ' 8 FCC Rcd at 2981.16 For a network station to be recognized as significantly viewed in a community or in a county, it must achieve in noncable homes a share of viewing hours of at least 3% (total week hours) and a net weekly circulation of at least 25%. 47CFR §76.5(i). 3568 Federal Communications Commission Record DA 96-339 3569 11 FCC Red No. 7 that it had a 26% station share of overall viewing in the County, according to Nielsen's Media Research 1992, Iowa County/Coverage Study. 10. With respect to Wapello County, KTVO states that more than fifty Wapello County businesses choose to ad- vertise on it, and that between April 1, 1991 and May 18, 1993, KTVO broadcast 1,945 stories about events in com- munities in the County. The station also notes that it has maintained a full-time news, sales, and office staff in Ottumwa in Wapello County, Iowa since 1955. According to the above Nielsen report, KTVO had the highest overall reported viewing share, 24%, and it also received a 15% share during the 6:00 pm news. Since there are only 19, 600 total households in Wapello and in Appanoose Coun- ties combined, KTVO adds that it is not surprising that the stations licensed to the Des Moines ADI generally focus their attention on the 372,700 total households in it, and that they seldom cover issues of local concern or carry sports or other events of interest to the listed communities in Wapello County, which are located some sixty miles away. 11. Similarly in Linn County, eleven businesses use KTVO for advertising purposes, and the station broadcast 41 items concerning stories about events in Linn County communities between April 1, 1991 and May 18, 1993. KTVO notes that the 5,600 households in Linn County are infrequently provided coverage of issues of local concern or sporting or other events of special interest to the com- munities in the County by the stations assigned to the Kansas City, Missouri ADI, to which Linn County is pres- ently assigned, which has a total of 772,700 households. According to the Nielsen report for Missouri, KTVO had a 13% total viewing share and an 11% share among cable viewers from sign-on to sign-off, while its overall ratings were below only two other stations. 12. Insofar as the communities in Scotland County are concerned, KTVO states that it aired 161 items about events there between April 1, 1991 and May 18, 1993, and that it has fifteen advertisers in the County. KTVO adds that it has sponsored a number of youth-oriented local events (such as wrestling contests and skating parties). and that it used the proceeds to fund activities such as the Scotland County school system's drug prevention program. According to KTVO, there are 103,900 total households in the Quincy-l-lannibal ADI, hut there are only 7,100 total households if you combine the communities in Knox, Lew- is, and Scotland Counties, so the stations assigned to the Quincy-Hannibal ADI seldom cover issues of concern or sporting or other events of interest to the listed commu- nities in Scotland County. Moreover. according to the above Nielsen report, KTVO received an overall station share of 44% in the County, which was more than double the share received there by any station in the Quincy- Hannibal AD!, to which Scotland County is currently as- signed, and KTVOs share during the 6:00 pm news broadcast was 62%, while it received a 67% share during the 10:00 pm news broadcast. 13. KTVO notes that one of its transmission towers is located in Knox County, and that between April 1, 1991 and May 18, 1993, it aired 97 stories concerning events in communities in the County. Recently, two of the businesses in Knox County began advertising on KTVO. and it received a 37% share of sign-on to sign-off viewing in the County, according to the above Nielsen report, which exceeded that of any other station. KTVO adds that it had a 50% viewing share during its local 10:00 pm news program, which exceeded the viewing of local news for the stations assigned to the Quincy-Hannibal ADI, where Knox County is located. KTVO adds that the stations assigned to this ADI infrequently cover issues of concern or sports or other events of local interest to the communities in Knox County because of their small size. 14. Finally, with respect to the communities in Lewis County, KTVO states that two local groups currently ad- vertise on the station, and that between April 1, 1991 and May 18, 1993, it broadcast 17 news stories about events in the County. Moreover, just as in Scotland and in Knox Counties, due to the small size of the communities in Lewis County, the stations assigned to the Quincy-Hannibal ADI, where Lewis County presently is, rarely cover issues of concern or sports or other events of local interest in the County. According to the above Nielsen study, KTVO re- ports that it had an 11% share during prime time in the County, and that it received a 5% share there sign-on to sign-off. ANALYSIS AND DECISION 15. We shall grant KTVO's petition. The station has demonstrated historic carriage by the cable systems serving the above communities in all six counties (factor one). In addition, KTVO has demonstrated coverage or other local service to these communities, including the fact that all but one of them (Meadville in Linn County) are within the station's Grade B or better contour (factor two). Insofar as the third factor is concerned, while KTVO has not fully addressed the issue of whether other stations entitled to mandatory carriage by cable systems in these communities (including affiliates of other networks and independents) already provide news coverage of issues of concern to them, as well as carriage or coverage of sporting or other events of interest there, we do not believe that Congress intended this factor to operate as a bar to a station's ADI claim whenever other stations also could he shown to serve the communities at issue. Rather, we believe 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. 16. With respect to both cable and noncable viewing patterns (factor four), we note that there currently is no other ABC affiliate assigned to the Quincy, Illinois- Hannibal, Missouri ADI, and that partly as a result, accord- ing to Nielsen's Media Research 1995, Missouri County/Coverage Study, KTVO received a 25% share of cable viewing and a 35% total viewing share in Scotland County, which is presently assigned to this ADI, between 7:00 am and 1:00 am on Saturdays and Sundays, while it had a 25% share of cable viewing and a 29% share of total viewing in the County Monday to Friday between 9:00 am and 4:00 pm. In Lewis County, which is currently in the same AD!, KTVO received a 6% share of cable viewing, as well as a 6% share of total viewing between 7:00 am and 1:00 am on Saturdays and Sundays, according to this same study, and it received no cable viewing share, but it had a 1% total viewing share Monday to Friday between 9:00 am and 4:00 pm. In Knox County, which is also in the Quin- cy-Hannibal ADI, KTVO had a 25% share of cable view- ing, as well as a 25% share of total viewing on Saturdays and Sundays between 7:00 am and 1:00 am, and the station DA 96-339 Federal Communications Commission Record 11 FCC Red No.7 received a 39% share of cable viewing and a 31% share of total viewing in the County Monday to Friday between 9:00 am and 4:00 pm. 17. In Linn County, although KTVO had no reported cable viewing share on Saturdays and Sundays between 7:00 am and 1:00 am, it received a 13% total viewing share during this time period, and Monday to Friday between 9:00 am and 4:00 pm, the station had an 8% total viewing share in the County, although it received no reported cable viewing share.17 18. Both Appanoose and Wapello Counties are presently in the Des Moines ADI, and KTVO received a 20% share of cable viewing and a 20% share of total viewing on Saturdays and Sundays between 7:00 am and 1:00 am, in addition to a 24% share of cable viewing, and a 33% share of total viewing in Appanoose County Monday to Friday between 9:00 am and 4:00 pm. In Wapello County, the station had a 12% share of cable viewing and a 13% total viewing share on Saturdays and Sundays between 7:00 am and 1:00 am, as well as a 16% share of cable viewing and a 17% share of total viewing Monday to Friday between 9:00 am and 4:00 pm, according to Nielsen's 1995 report for Iowa.'8 19. Even absent any possible enhancement as a result of the third factor, KTVO's showing on each of the other factors is sufficient to warrant grant of the relief requested in the six counties noted. Therefore, for the purposes of determining mandatory signal carriage obligations, we shall consider the communities previously specified by KTVO in Appanoose and in Wapello Counties in Iowa to be part of the Ottumwa, Iowa-Kirksville, Missouri ADI with respect to carriage of KTVO (as well as within the Des Moines, Iowa ADI), and the communities listed in the Missouri Counties of Knox, Lewis, and Scotland to be part of the Ottumwa, Iowa-Kirksville, Missouri ADI (as well as within the Quincy, Illinois-Hannibal, Missouri ADI), in addition to the listed communities in Linn County, Missouri, which we shall also consider to be part of the Ottumwa, Iowa- Kirksville, Missouri ADI with respect to carriage of KTVO(as well as within the Kansas City, Missouri ADI). This determination is subject to all generally applicable limita- tions on signal carriage rights, including copyright liability, signal quality, channel capacity, and program duplication. See, paragraph 7, supra. ORDERING CLAUSES 20. Accordingly, IT IS ORDERED, pursuant to §614(h) of the Communications Act of 1934. as amended, (47 U.S.C. §534) and §76.56 and 76.59 of the Commission's Rules (47 CFR §76.56 and 76.59), That the captioned petition for special relief filed June 2, 1993 by Federal Broadcasting Company (CSR-3866-A) IS GRANTED. This change shall be effective in accordance with the following schedule: KTVO shall notify the cable systems in question in writing of its carriage and channel position elections ( 76.56, 76.57, and 76.64(f) of the Commission's Rules) with- in thirty (30) days of the release date of this Memorandum Opinion and Order. The affected cable systems shall come into compliance with the applicable rules within sixty (60) days of such notification. 21. 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 ' By comparison, Station KMBC-TV (Channel 9), the ABC affiliate licensed to the Kansas City, Missouri ADI, to which Lion County is currently assigned, received a 9% share of total viewing in Linn County on Saturdays and Sundays between 7:00 am and 1:00 am, with no reported share of cable viewing, and it had a 5% share of total viewing with no reported share of cable viewing Monday to Friday between 9:00 am and 4:00 pm in the County.18 The ABC affiliate presently assigned to the Des Moines, Iowa ADI, Station WOl-TV (Channel 5), Ames. Iowa, by corn- parison, received no reported share of cable viewing and had a 5% total viewing share on Saturdays and Sundays between 7:00 am and 1:00 am in Appanoose County, while it reported no share of cable viewing, it received a 4% share of total viewing in the County Monday to Friday between 9:00 am and 4:01) pm. In Wapello County, WOl-TV received a 6% share of cable viewing and a 6% total viewing share on Saturdays and Sundays be- tween 7:00 am and 1:00 am, while it had a 7% share of cable viewing and a 6% total viewing share in the County Monday to Friday between 9:00 am and 4:00 pm. 3570