7 FCC Red No. 2 Federal Communications Commission Record FCC 92-7

would be insignificant and de minimis. This justifies waiv­ Before the er pursuant to long-standing Commission precedent, Con­ Federal Communications Commission tinental argues, citing, inter alia. Communicable of Texas, Washington, D.C. 20554 45 RR 2d 297 (1979); Missouri Valley Communications, Inc., 58 FCC 2d 1101 (1976); Cable Video, Inc., 35 RR 2d 981 (1975); and Sabre Cablevision Co., Inc., 52 FCC 2d In re: 328 (1975). Continental also asserts that waivers are war­ ranted due to technical infeasibility. In each case, Con­ CONTINENTAL CSR-3341 tinental avers that it could construct new headends -- one for its Tiffin-Fostoria system and two for its Bellevue CABLEVISION OF CSR-3348 system -- at a cost of approximately $155.000 per headend, , INC. to enable Continental to limit its blackouts to the re­ quired communities. However, by so doing, argues Con­ Petitions for Special Relief tinental, each new headend would be exempt from blackout requirements as serving fewer than 1000 sub­ scribers. In such circumstances, contends Continental re­ MEMORANDUM OPINION AND ORDER quiring the estimated expenditures "would not be a socially useful exercise." Balancing the anticipated mini­ Adopted: January 2, 1992; Released: January 17, 1992 mal. i~~act to the local stations, the technical infeasibility of hm1ting the blackout range through Continental's sys­ By the Commission: tems, and the financial burden to Continental, petitioner claims_ that Commission precedent warrants waiver, citing, 1. On December 27, 1989 and on December 29, 1989, e.g., First Report and Order in Docket No. 20561, 63 FCC Continental Cablevision of Ohio, Inc. (hereinafter "Con­ 2d 956, 967 (1977). recon. denied, 67 FCC 2d 716 (1978), tinental"), operator of systems serving and Hoosier Hills Cable Co., 48 FCC 2d 138 (1974), recon. several communities in northern Ohio, filed petitions for granted in part, 51 FCC 2d 1137 ( 1975). special relief seeking waivers of the Commission's net­ 5. Following Commission staff inquiries, Continental work program nonduplication and syndicated exclusivity submitted supplemental pleadings. In addition to sum­ rules. §§76.92 -- 76.163 of the Commission's Rules. 1 Con­ marizing and reiterating its earlier arguments, Continental tinental's petitions are unopposed. also noted that each of its cable systems is a mature 2. The Commission's program exclusivity rules protect system, that penetration rates in the affected communities the holders of network non-duplication rights have remained sta?le over the past five years (ranging (§§76.92-76.97 of the Commission's Rules) and syndicated from 68% to 82% in the affected communities in 1986 to exclusivity rights (§§76.151-76.163 of the Commission's between 71 % and 87% in the same communities today), and that total subscribership "is not expected to increase Rul.e~) i_n given television market zones. Upon proper notif1cat1on by a holder of such rights, a cable system in significantly in the near term." While future technology the particular market shall not carry protected programs might allow more discrete blackouts than are currently as broadcast by any other television signal, with certain possible, states Continental, prototype costs for the sub­ scribers involved would still be over $100.000, which is designated exceptions (e.g., significantly viewed signals are 5 exe1'.1pt from program exclusivity blackouts, and systems not economically feasible. Accordingly, contends Con­ tinental, literal application of the rules will not lead to serving fewer than 1000 subscribers are exempt from 6 these rules. long-term diversity. 3. Continental states, with respect to its petition con­ 6. In adopting our current program exclusivity rules, cerning Tiffin and Fostoria, Ohio and neighboring com­ we stated our intention that "a broadcaster cannot con­ munities (CSR-3341), that it has received a request for tract for exclusive rights when it has no reasonable ex­ programming protection from Television Broadcast Sta­ pectation of exclusivity in any case." Report and Order in tion WUPW (Ind .. Channel 36), Toledo. Ohio. 2 With Gen. _Docket No. 87-24, 3 FCC Red 5299, 5315 (1988), respect to Continental's petition concerning Bellevue. aff d m part and modified in part. 4 FCC Red 2711 ( 1989), Ohio and neighboring communities (CSR-3348), petition~ aff d sub nom. United Video. Inc. v. FCC, 890 F.2d 1173 er states that it has received similar programming protec­ (D.C. Cir. 1989). We further noted that "cable systems tion requests from Stations WJKW-TV (CBS, Channel 8) may continue to avail themselves of the standard waiver and WEWS (ABC, Channel 5), both , Ohio and procedures provided in the Communications Act." Gen. WUAB (Ind., Channel 43), Lorain, Ohio.3 In each case, Docket No. 87-24, 3 FCC Red at 5339 n. 243. Rules of states Continental, the stations requesting protection are general application, of course, cannot anticipate every entitled to enforce their rights only with respect to small situation that may arise. Consequently, the associated spe­ portions of Continental's systems. However, due to the cial relief process exists as a safety valve, to ensure that technical integration of the systems, Continental states the rules are allowed to operate in accordance with their that it cannot reasonably provide protection only in those intended purposes. The question arises, therefore, in view portions of the systems in which protection is mandated. of the information presented to us by Continental, wheth­ Accordingly, Continental seeks waivers of the rules. er special relief from our rules is warranted in the cir­ cumstances presented here. 4. In support of each of its petitions, Continental argues the sole communities in which protection is required by 7. We believe that waivers are warranted in the present the rules have fewer than 1000 subscribers, and constitute circumstances. Continental has demonstrated that its sys­ four percent or less of the respective integrated systems' tem is configured and technically integrated in such a subscribers.4 Any potential harm to the local broadcasters manner that the costs of segregating the relatively few arising from a waiver, claims Continental, therefore affected subscribers is so prohibitive as not to be in the

499 FCC 92-7 Federal Communications Commission Record 7 FCC Red No. 2 public interest. We note that the affected communities are 3 Stations WKYC-TV (NBC, Channel 3), Cleveland, Ohio, and small, being served by a mature cable system whose pene­ WTVG (NBC, Channel 13), Toledo, Ohio, had also requested tration rates have remained relatively stable for several protection from Continental. However, on January 26, 1990, years, and that their subscribership is not expected to WKYC-TV and WTVG withdrew their requests, while reserving increase significantly in the near future. Indeed, only 486 the right to renew their requests in the future should the of Continental's subscribers on its Tiffin-Fostoria system affected community units reach a subscriber level of 1000. (only 3.89% of the system's subscribers), and only 145 of 4 In CSR-3341, Continental notes that WKBD-TV (Ind., Chan­ Continental's subscribers on its Bellevue system (only nel 50), , , against which WUPW seeks protec­ 2.45% of the system's subscribers) are within the market tion, is significantly viewed in Wood County, but not in zones in question so as to render them liable to exclusiv­ Sandusky, Hancock, and Seneca Counties. Thus, Continental ity blackouts on Continental's technically-integrated sys­ need only black out WKBD-TV's programming to 486 of ap­ tems in the present circumstances. Such figures are proximately 12,500 subscribers. In CSR-3348, Continental notes clearly de minimis under our precedents. See, e.g., Com­ that 5766 of its 5911 subscribers are in communities which lie municable, Inc., supra; Missouri Valley Communications, outside of the Toledo, Ohio and Cleveland, Ohio major televi­ Inc., supra; Cable Video, Inc., supra; Sabre Cablevision Co., sion markets, and that, therefore, Continental need only black Inc., supra. As in those cases, we look at the totality of the out the programming in question to 145 subscribers. circumstances involved. While our program exclusivity 5 While declining to disclose any specific financial data, Con­ rules are designed to protect parties' legitimate contractual tinental states that it generates less than $26.36 per household rights so that "the supply and diversity of programming per month in the Fostoria system, the average revenue per demanded by viewers" may be increased, Gen. Docket No. household figure cited in the GAO Follow-Up National Survey 87-24, 3 FCC Red at 5310, failure to waive our rules in a of Cable Television Rates and Services (June 1990). de minimis case such as this would provide protection 6 with respect to only a few hundred viewers at the expense Continental also raises several constitutional claims, asserting of thousands not barred from receiving the programming first amendment, equal protection, and copyright issues. In view in question. However, in taking this action we are acutely of our disposition herein, we need not address these claims. aware that contractual rights are being abrogated.7 There­ 7 In that regard, we note that the stations whose rights are fore, the burden of proof for like waivers will be high. directly implicated have not contested Continental's waiver re­ This is to ensure that such waivers do not interfere with quest. the policies underlying the Commission's exclusivity rules. In this regard, we note that we will not be bound to any fixed percentages of subscribers affected. We will look not only to the percentage of subscribers involved but also the absolute number of subscribers affected as one factor in our deliberations. In view of the reasons noted above, however, here the public interest would be served by granting the requested waivers. 8. In view of the foregoing, we find that grant of Continental's petitions is in the public interest. 9. Accordingly, IT IS ORDERED, That the petitions for special relief (CSR-3341, -3348) filed, respectively, Decem­ ber 27, 1989, and December 29, 1989, by Continental Cablevision of Ohio, Inc. ARE GRANTED. 10. IT IS FURTHER ORDERED, That the petitions for stay filed concurrently by Continental Cablevision of Ohio, Inc., with its special relief petitions ARE DIS­ MISSED.

FEDERAL COMMUNICATIONS COMMISSION

Donna R. Searcy Secretary

FOOTNOTES 1 Simultaneously with its petitions, Continental also filed petitions for stay of the rules in question. In view of our disposition today, we are dismissing these petitions as moot. 2 Station WNWO-TV (ABC, Channel 24), Toledo, Ohio, had also requested protection from Continental. However, on Janu­ ary 26, 1990, WNWO-TV withdrew its request, while reserving its right to renew its request in the future should the affected community units reach a subscriber level of 1000.

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