10 FCC Red No. 9 Federal Communications Commission Record DA 95-802

3. Under the Act, however, the Commission is also di Before the rected to consider changes in ADI areas. Section 614(h) Federal Communications Commission provides that the Commission may: Washington, D.C. 20554 with respect to a particular television broadcast sta tion, include additional communities within its tele In re: vision market or exclude communities from such station©s television market to better effectuate the WOWT-TV CSR-3966-A purposes of this section. Omaha, Nebraska In considering such requests, the 1992 Cable Act provides For Modification of its that: Cable Must-Carry Television Market the Commission shall afford particular attention to the value of localism by taking into account such MEMORANDUM OPINION AND ORDER factors as: (I) whether the station, or other stations located in Adopted: April 11,1995; Released: April 18,1995 the same area, have been historically carried on the cable system or systems within such community; By the Cable Services Bureau: (II) whether the television station provides coverage or other local service to such community; INTRODUCTION (III) whether any other television station that is eli 1. In the captioned proceeding, Chronicle Publishing gible to be carried by a cable system in such commu Company, licensee of television station WOWT (hereinafter nity in fulfillment of the requirements of this section "WOWT"), Omaha, Nebraska (NBC - Channel 6), has provides news coverage of issues of concern to such requested the Commission to include Lancaster County community or provides carriage or coverage of sport within the Omaha, Nebraska "area of dominant influence" ing and other events of interest to the community; ("ADI") for the purpose of obtaining signal carriage rights and on the cable system serving that County. Television station (IV) evidence of viewing patterns in cable and non- KHGI (ABC - Channel 13), Kearney, Nebraska, filed an cable households within the areas served by the cable opposition to the petition for special relief as did television system or systems in such community. station KHAS (NBC - Channel 5), Hastings, Nebraska. WOWT filed separate replies in response to oppositions of 4. The legislative history of this provision indicates that: KHAS and KHGI. where the presumption in favor of ADI carriage BACKGROUND would result in cable subscribers losing access to 2. Pursuant to §4 of the Cable Television Consumer local stations because they are outside the ADI in Protection and Competition Act of 1992 ("1992 Cable which a local cable system operates, the FCC may Act") 1 and implementing rules adopted by the Commission make an adjustment to include or exclude particular in its Report and Order in MM Docket 92-2S9,2 a commer communities from a television station©s market con cial television broadcast station is entitled to assert man sistent with Congress© objective to ensure that televi datory carriage rights on cable systems located within the sion stations be carried in the areas which they serve station©s market. A station©s market for this purpose is its and which form their economic market. "area of dominant influence," or ADI, as defined by the Arbitron audience research organization.3 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.4

1 Pub. L. No. 102-385, 106 Stat. 1460 (1992). used for purposes of the initial implementation of the man 2 Broadcast Signal Carriage Issues, 8 FCC Red 2965, 2976-2977 datory carriage rules are those published in Arbitron©s (1993). 1991-1992 Television Market Guide. © Section 4 of the 1992 Cable Act specifies that a commercial 4 Certain counties are divided into more than one sampling broadcasting station©s market shall be determined in the man unit because of the topography involved. Also, in certain cir ner provided in §73.3555(d)(3)(i) of the Commission©s Rules, as cumstances, a station may have its home county assigned to an in effect on May 1, 1991. This section of the rules, now ADI even though it receives less than a preponderance of the redesignated §73.3555(e)(3)(i), refers to Arbitron©s ADI for pur audience in that county. Refer to Arbitron©s Description of poses of the broadcast multiple ownership rules. Section Methodology handbook for a more complete description of how 76.55(e) of the Commission©s Rules provides that the ADls to be counties are allocated.

4377 OA 95-802 Federal Communications Commission Record 10 FCC Red No. 9

* « * * * increase in copyright liability resulting from carriage; and 4) the system operator is not required to carry the signal of [This subsection] establishes certain criteria which the any station whose signal substantially duplicates the signal Commission shall consider in acting on requests to of any other local signal carried, or the signal of more than modify the geographic area in which stations have one local station affiliated with a particular broadcast net signal carriage rights. These factors are not intended work. If, pursuant to these requirements, a system operator to be exclusive, but may be used to demonstrate that elects to carry the signal of only one such duplicating a community is part of a particular station©s market.5 signal, the operator is obliged to carry the station from the ADI whose city of license is closest to the principal headend of the cable system.9 Accordingly, based on the 5. The Commission provided the following guidance in specific circumstances involved, the addition of commu the Report and Order to aid decision making in these nities to a station©s ADI may guarantee it cable carriage matters: and specific channel position rights, or may simply provide the system operator with an expanded list of must-carry For example, the historical carriage of the station signals from which to choose (i.e., when the system has could be illustrated by the submission of documents used up its channel capacity mandated for broadcast signal listing the cable system©s channel line-up (e.g., rate carriage, or determined which of duplicating network affili cards) for a period of years. To show that the station ated stations are entitled to carriage priority). 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 MARKET FACTS AND ARGUMENTS OF THE PARTIES over the cable community or is located close to the 8. In its petition, WOWT asks the Commission to add community in terms of mileage. Coverage of news or Lancaster County, Nebraska to the Omaha, Nebraska ADI other programming of interest to the community so that WOWT may assert must carry rights on Lincoln could be demonstrated by program logs or other Cablevision, the cable system which essentially serves the descriptions of local program offerings. The final fac entire county. WOWT asks that Lancaster County, not tor concerns viewing patterns in the cable commu specific communities, be included in the Omaha ADI. nity in cable and non-cable homes. Audience data WOWT states that the 1992 Cable Act permits the Com clearly provide appropriate evidence about this fac mission to add "communities" to a local television market tor. In this regard, we note that surveys such as those where doing so would "better effectuate the purposes" of used to demonstrate significantly viewed status could the Act©s must-carry provision. WOWT notes that neither be useful. However, since this factor requires us to the statute nor the Commission©s rules define the term evaluate viewing on a community basis for cable and "community." WOWT argues that, in this instance, it non-cable homes, and significantly viewed surveys makes essentially no difference as to whether the "commu typically measure viewing only in non-cable house nity" at issue is defined as Lancaster County, Lincoln or holds, such surveys may need to be supplemented the homes served by Lincoln Cablevision. To support its with additional data concerning viewing in cable argument, WOWT maintains that over 85% of the televi homes.6 sion households in Lancaster County are located in Lin coln, and over 95% of the households in the entire county 6. In adopting rules to implement this provision, the are passed by Lincoln Cablevision. Commission indicated that requested changes should be 9. To justify its request, WOWT states that it has been considered on a community-by-community basis rather carried on Lincoln Cablevision continuously since cable than on a county-by-county basis, and that they should be service was established in 1969. WOWT adds that it is the treated as specific to particular stations rather than ap only NBC network affiliate currently carried on the cable plicable in common to all stations in the market.7 The system which serves nearly 70,000 subscribers in Lancaster rules further provide, in accordance with the requirements County. 10 With respect to coverage and local service, of the 1992 Cable Act, that a station not be deleted from WOWT states that its Grade B signal encompasses virtually carriage during the pendency of an ADI change request.8 all of Lancaster County and its Grade A signal includes a 7. Adding communities to a station©s ADI generally en portion of Lancaster County. WOWT notes that it meets titles that station to insist on cable carriage in those com the local programming needs of Lancaster County in a munities. However, this right is subject to several variety of ways, including news coverage and community conditions: 1) a cable system operator is generally required affairs announcements, as well as general public affairs to devote no more than one-third of the system©s activated programming. 11 In addition, WOWT airs about 30 news channel capacity to compliance with the mandatory signal stories a month concerning events and happenings in the carriage obligations; 2) the station is responsible for County and maintains a full-time news bureau in Lincoln. delivering a good quality signal to the principal headend of As for local viewing patterns, WOWT maintains that it has the system; 3) indemnification may be required for any substantial viewership in Lancaster County with viewing

5 H.R. Rep. 102-628, 102d Cong., 2d Sess. at 97 (1992). 11 WOWT also states that it supports community projects in 6 8 FCC Red at 2977 (emphasis in original). Lancaster County such as the Lincoln national multiple sclero 7 Id. and n.139. sis supercities walk. WOWT©s programming and community 8 47 C.F.R. §76.59. efforts are documented in an appendix attached to its petition 9 8 FCC Red at 2981. for special relief. 10 On October 7, 1993, WOWT submitted a statement of sup port for its market modification from Mike Johanns, the mayor of Lincoln, Nebraska.

4378 10 FCC Red No. 9 Federal Communications Commission Record DA 95-802 data showing that its local news programs consistently and KOUN provide such coverage, the opposition fails to ranked among the top three local news programs in the provide any specifics as to the particular stories or pro market. According to WOWT, it received a 15 share for grams carried by these stations. More importantly, WOWT prime-time, a 9 share for day-time and a 5 share for the argues, KHAS does not state that it provides such coverage. early evening news in Lancaster County in 1992. Finally, WOWT rebuts KHAS©s argument that the 1992 10. KHAS argues in opposition that the grant of Cable Act only authorizes the Commission to add commu WOWT©s petition would unsettle marketplace balances be nities and not counties. WOWT reiterates that neither the tween the Omaha television market and the Lincoln-Has- 1992 Cable Act nor the Commission©s rules define the term tings-Kearney television market. KHAS explains that it is "community" and regardless of how the Commission© an NBC affiliate licensed to Hastings, Nebraska, which is chooses to define that term, the petition demonstrates-©that part of the Lincoln-Hastings-Kearney ADI and it therefore WOWT is local to all of Lancaster County. is entitled to mandatory carriage rights throughout the 12. KHGI argues in opposition that WOWT has failed to Lincoln ADI including Lancaster County. KHAS asserts demonstrate that no other area television stations serve or that granting WOWT must carry rights on Lancaster Coun will soon serve the subject communities. 12 KHGI notes that ty cable systems may displace carriage of KHAS and other WOWT ignores the fact that KOLN already provides sub Lincoln ADI television stations. It also states that enforce stantial public affairs programming and news of local inter ment of mandatory cable carriage for WOWT throughout est to Lincoln viewers. KHGI adds that it has a permit to Lancaster County "ultimately will allow cable systems to construct a translator in Lincoln which will soon deliver its forego carriage of NBC affiliate KHAS-TV in favor of the programming to that city13 and that the station plans on more proximate NBC affiliate, WOWT, pursuant to Section maintaining a news bureau in Lincoln to better cover local 76.56(b)(5) of the Commission©s rules." As for the specific events. market modification criteria, KHAS claims that WOWT 13. In its reply to KHGI, WOWT argues that the opposi fails to show that no other television station provides cov tion is frivolous and should be rejected for the same rea erage of issues of concern to Lancaster County residents. sons as the opposition of KHAS. In addition, WOWT states With regard to WOWT©s request to include Lancaster that KHGI does not meet the goals of localism because its County in its entirety in the Omaha ADI, KHAS responds signal is not carried on any Lancaster County cable system that the relief WOWT requests "is well beyond the scope of and it lacks viewership in Lancaster County. In contrast, what the Commission is authorized to grant" under the WOWT has a history of carriage on Lincoln Cablevision, 1992 Cable Act and the Commission©s rules." Finally, places a strong signal over all of Lancaster County, and has KHAS remarks that nothing in the 1992 Cable Act pre maintained strong viewer ratings throughout the County. vents Lancaster County cable systems from carrying WOWT in addition to television stations already entitled to must carry status; if WOWT©s programming service is as ANALYSIS AND DECISION critical to the County©s viewer©s as WOWT claims it is, 14. WOWT has provided sufficient evidence to justify its local cable systems will choose to carry the signal based on market modification request and it will accordingly be subscriber demand. granted. However, we limit the modification to those com 11. WOWT asserts in its reply that KHAS does not munities served by Lincoln Cablevision because that is the demonstrate sufficient grounds for denying its petition. only cable system that WOWT noted in its petition and to WOWT first maintains that KHAS, which is more than 120 which we can apply the requisite statutory criteria. The miles from Lincoln in Lancaster County, places no 1992 Cable Act authorizes the Commission to modify viewable signal over any part of Lancaster County, has ADI©s to eliminate or include "communities." We do not never been carried on any cable system in Lancaster Coun read the word "community" as it is used in Section 614(h), ty, has no viewers in Lancaster County, and provides no in its legislative history, or as used in cable regulation evidence of any effort to program for the residents of generally to mean "county." To allow stations or cable Lancaster County. As for the substance of the opposition, operators to seek to include or exclude entire counties WOWT argues that KHAS claim of marketplace "disrup from a particular ADI without regard to the individual tions" is "absurd" because it is WOWT, not KHAS, which circumstances of the communities or franchised areas with seeks to maintain the existing pattern of cable carriage; in in such counties would not facilitate an evaluation of the this matter, it is KHAS which seeks to disrupt existing specific modification criteria provided for in the Act and cable carriage and viewing patterns by, at some unspecified thus an identification of the specific communities within point in the future, relaying its distant signal to Lincoln the county has generally been required.15 Cablevision©s headend, and demanding carriage. WOWT 15. Turning to the factors specified in the 1992 Cable counters the arguments raised by KHAS that its petition Act, we find that WOWT has met all four statutory ele should be denied because it failed to show that no other ments with the historical carriage requirement and television station provides coverage of issues of concern to viewership showing being particularly notable. As WOWT©s residents of Lancaster County. WOWT asserts that while pleading states, the station has been continuously carried KHAS claims that other stations in the market like KOLN

12 KHGI states that it only opposes WOWT©s petition to the quality as received at the system©s principal headend. With the extent that the arguments may be used by the Commission as a addition of a translator, KHGI hopes to provide the operator basis to modify KETV©s market to include Lincoln. We note with a city-grade signal. that we recently granted KETV©s market modification petition. 14 See H.R. Rep. 102-628, 102d Cong., 2d Sess. at 97 (1992). See Pulitzer Publishing Co., DA 95-600 (released March 31, 15 We recently denied a cable operator©s plea to exclude a 1995). station from particular markets partly because it asked that 13 According to KHGI, it requested carriage on Lincoln entire counties be removed from an ADI. See Tele-Media Cor Cablevision but was rejected because of the station©s poor signal poration, DA 94-1574 (released: January 5, 1995).

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on Lincoln Cablevision since 1969. The fact that the cable FEDERAL COMMUNICATIONS COMMISSION operator has continuously carried WOWT for over 25 years demonstrates that Lincoln Cablevision and its subscribers value the station which has been the only NBC network affiliate providing service to the communities at issue. 16. The viewing pattern data in cable and non-cable William H. Johnson households also demonstrates that WOWT has a strong Deputy Chief, Cable Services Bureau marketplace presence in Lancaster County. The station has ^a 74 net weekly circulation in cable and non-cable house holds in Lancaster County. 16 Its viewing share in Lancaster County-is 12. 17 Additionally, WOWT is the only NBC affiliate serving Lancaster County and found on Lincoln Cablevision. With respect to coverage and local service to the cable communities, we believe that WOWT has shown that it provides Lincoln Cablevision subscribers with lo cally oriented programming including coverage of state and local political news along with sports and other commu nity-specific human interest stories. A detailed program ming log provided by WOWT supports this conclusion. WOWT©s submission of a testimonial from Lincoln©s mayor is also persuasive as to the station©s service to the cable communities. Finally, WOWT has shown that it places a Grade B contour or better over Lancaster County.18 17. WOWT also makes a successful showing under the third statutory factor. We find it persuasive that WOWT is the only station providing NBC programming to residents of Lancaster County and found on Lincoln Cablevision. In contrast, and as noted by WOWT, KHAS, the NBC affiliate licensed to Hastings, places no viewable signal over any part of Lancaster County, has never been carried on any cable system in Lancaster County, has no viewers in Lan caster County, and provides no evidence of any effort to program for the residents of Lancaster County. These facts enhance WOWT©s argument for market modification. 18. We note that according to WOWT, KHAS plans on relaying its distant signal to Lincoln Cablevision. We also note that KHGI states it has a translator in Lincoln so that it will place a good quality signal over Lincoln. 19 We believe that one of the principal considerations underlying the ADI waiver process is to insure that historic viewing patterns are not disrupted. Consequently, we believe that KHGI©s construction, or KHAS©s future construction, of a translator station is not relevant to our waiver analysis.

ORDER 19. Accordingly, IT IS ORDERED, pursuant to §614 of the Communications Act of 1934, as amended (47 U.S.C. §534), and §76.59 of the Commission©s Rules (47 C.F.R. §76.59), that the petition for special relief filed July 7, 1993 by Chronicle Publishing Company IS GRANTED with respect to the communities served by Lincoln Cablevision in Lancaster County and otherwise IS DENIED. 20. This action is taken pursuant to authority delegated by §0.321 of the Commission©s rules.

16 See Arbitron©s Television County Coverage for 1993. These 17 See id. data are county-based, rather than community-specific. How 18 The Commission has held that Grade B coverage demon ever, absent evidence that such data are not fairly reflective of strates service. See 8 FCC Red at 2981. viewing in the actual communities in question, such data are 19 Counsel for KHGI confirms this fact. acceptable as probative, although not conclusive, in cases of this type.

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