Federal Communications Commission Record 11 FCC Red No. 5

DA 96-167 Federal Communications Commission Record 11 FCC Red No. 5

market designation that defines each television market exclusive of others, based on measured viewing patterns. Before the Essentially, each county in the United States is allocated to Federal Communications Commission a market based on which home-market stations receive a Washington, D.C. 20554 preponderance of total viewing hours in the county. For purposes of this calculation, both over-the-air and cable television viewing are included.7 In re: 3. Under the Act, however, the Commission is also di- rected to consider changes in ADI areas. Section 4 provides KSBW License, Inc. CSR-4 176-A that the Commission may: Salinas, CA with respect to a particular television broadcast sta- For Modification Television Broadcast tion, include additional communities within its tele- Station KSBW's ADI vision market or exclude communities from such station's television market to better effectuate the purposes of this section. In considering such requests, MEMORANDUM OPINION AND ORDER the Act provides that:

Adopted: February 12, 1996; the Commission shall afford particular attention to Released: February 21, 1996 the value of localism by taking into account such factors as -- By the Deputy Chief, Cable Services Bureau: (I) whether the station, or other stations located in the same area, have been historically carried on the INTRODUCTION cable system or systems within such community; 1. KSBW License, Inc., licensee of television broadcast (II) whether the television station provides coverage station KSBW (Ch. 8, NBC), Salinas, CA, has filed a peti- or other local service to such community; tion for special relief seeking to include 11 communities (III) whether any other television station that is eli- served by three different cable systems located in Santa gible to be carried by a cable system in such commu- Clara County, CA, in the Salinas-Monterey ADV for pur- nity in fulfillment of the requirements of this section poses of the Commission's mandatory signal carriage rules.2 provides news coverage of issues of concern to such Oppositions to this petition were filed on behalf of KNTV, community or provides carriage or coverage of sport- Inc.,3 licensee of KNTV-TV, San Jose, CA, and Chronicle ing and other events of interest to the community; Broadcasting., licensee of KRON-TV, San Francisco, CA. and KSBW-TV filed replies to both oppositions. (IV) evidence of viewing patterns in cable and noncable households within the areas served by the BACKGROUND cable system or systems in such community.8 2. Pursuant to §4 of the Cable Television Consumer Protection and Competition Act of 1992 ("1992 Cable 4. The legislative history of this provision indicates that: Act")4 and implementing rules adopted by the Commission in its Report and Order in MM Docket 92-259, commercial where •the presumption in favor of ADI carriage television broadcast stations are entitled to assert mandatory would result in cable subscribers losing access to carriage rights on cable systems located within the station's local stations because they are outside the ADI in market. A station's market for this purpose is its "area of which a local cable system operates, the FCC may dominant influence" or ADI as defined by the Arbitron make an adjustment to include or exclude particular audience research organization.6 An ADI is a geographic communities from a television station's market con-

The Salinas-Monterey ADI Consists of Monterey, San Benito, and Santa Crux counties. Section 6l4(h)(l)(C) of the 1992 Cable Act specifies that a The communities and their respective cable systems are: 1) broadcasting station's market shall be determined in the man- Gilroy, Morgan Hill, San Martin and portions of Santa Clara ner provided in §73.3555(d)(3)(i) of the Commission's Rules, as County served by Falcon Cable Systems Co.; 2) Los Gatos, in effect on May 1, 1991. This section of the rules, now Monte Serrano, Saratoga and Santa Clara County served by redesignated §73.3555(e)(3)(i), refers to Arbitron's AD! for purposes of the broadcast South Bay Cablevision; and 3) San Jose, Campbell, Cupertino, multiple ownership rules. Section and Los Gatos served by Heritage Communications (TCI). 76.55(e) of the Commission's Rules provides that the ADIs to be KNTV notes that it filed its opposition one day late but asks used for purposes of the initial implementation of the man- that the Commission accept the filing because it provides sub- datory carriage rules are those published in Arbitron's stantive comments and information relating to important issues 199 1-1992 Television Market Guide. raised by KSBW in its petition. In the alternative, KNTV re- Because of the topography involved, certain counties are quests that the Commission consider its opposition as an infor- divided into more than one sampling unit. Also, in certain mal objection. KSBW argues that KNTV's opposition should not circumstances, a station may have its home county assigned to be entertained because it was filed late without a valid excuse or an AD! even though it receives less than a preponderance of the explanation. We will treat KNTV's filing as an informal objec- audience in that county. For a more complete description of how counties are allocated, tion. see Arbitron's Description of Meth- odology. Pub. L. No. 102-385, 106 Stat. 1460 (1992). 8 8 FCC Rcd 2965, 2976-2977 (1993). Communications Act of 1934, as amended, §6l4(h)(l)(C)(ii), 47 U.S.C. §534(h)(l)(C)(ii).

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sistent with Congress' objective to ensure that televi- obligations, 2) the station is responsible for delivering a. sion stations be carried in the areas which they serve good quality signal to the principal headend of the system, and which form their economic market. 3) indemnification may be required for any increase in copyright liability resulting from carriage, and 4) the system 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 [This subsection] establishes certain criteria which the one local station affiliated with a particular broadcast net- Commission shall consider in acting on requests to work. If, pursuant to these requirements, a system operator modify the geographic area in which stations have elects to carry the signal of only a single affiliate of a signal carriage rights. These factors are not intended broadcast network, it is obliged to carry the affiliate from to be exclusive, but may be used to demonstrate that within the ADI whose city of license is closest to the a community is part of a particular station's market.9 principal headend of the cable system.'3 Accordingly, based on the specific circumstances involved, the addition of communities to a station's AD! may guarantee it cable 5. The Commission provided guidance in its Report and carriage and specific channel position rights; simply pro- Order in MM Docket 92-259, supra, to aid decision making in these matters, as follows: vide 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 For example, the historical carriage of the station carriage, or determined which of duplicating network affili- could be illustrated by the submission of documents ated stations are entitled to carriage priority. 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 MODIFICATION ARGUMENTS community (factor 2), parties may demonstrate that 8. The communities here in question are located in the station places at least a Grade B coverage contour Santa Clara County, California, and are considered to be over the cable community or is located close to the part of the San Francisco-Oakland-San Jose area of domi- community in terms of mileage. Coverage of news or nant influence ("AD!"). KSBW's city of license, Salinas, other programming of interest to the community CA, is considered to be part of the Salinas-Monterey ADI could be demonstrated by program logs or other and is about 15 miles from the county border. KSBW's descriptions of local program offerings. The final fac- transmitter is located 20 miles south of San Jose in the tor concerns viewing patterns in the cable commu- Santa Cruz mountains, its Grade A contour encompasses nity in cable and noncable homes. Audience data all of Santa Clara county, and its Grade B contour is clearly provide appropriate evidence about this fac- predicted to cover the cities of San Francisco and Oakland. tor. In this regard, we note that surveys such as those 9. used to demonstrate significantly viewed status could In support of its petition, KSBW states its signal: (1) is be useful. However, since this factor requires us to currently carried on the Falcon cable system in Gilroy, evaluate viewing on a community basis for cable and Morgan Hill, San Martin and portions of Santa Clara noncable homes, and significantly viewed surveys County, and has been since at least 1981; (2) was carried typically measure viewing only in noncable house- on the South Bay Cablevision system serving Los Gatos, holds, such surveys may need to be supplemented Monte Serrano, and Santa Clara from 1968 to 1990 and in with additional data concerning viewing in cable the community of Saratoga from 1988 to 1989; and (3) is. homes.'° currently carried on the Heritage cable system serving San Jose, Campbell, Cupertino, and Los Gatos, and has been since December, 1967, except for a brief period in 1988 6. In adopting rules to implement this provision, the and 1989. KSBW asserts that it provides local coverage Commission indicated that changes requested should be because its Grade B contour extends well beyond Santa considered on a community-by-community basis rather Clara county and it provides local service to the commu- than on a county-by-county basis and that they should be nities through programming and other activities. For exam- treated as specific to particular stations rather than ap- ple, the station notes that it has a fully operational news plicable in common to all stations in the market.It The bureau located in Gilroy, CA, which is located in Santa rules further provide, in accordance with the requirements Clara county. KSBW also includes, as evidence, a news log of the Act, that a station not be deleted from carriage demonstrating coverage of news stories affecting some of during the pendency of an ADI change request)2 the communities subject to the modification request as well 7. Adding communities to a station's AD! generallyen- as a list of the civic events its had recently participated in. titles that station to insist on cable carriage in those com- Noting that the San Francisco NBC affiliate KRON often munities. However, this right is subject to several preempts' the NBC prime-time schedule to broadcast local conditions: 1) a cable system operator is generally required sporting events, KSBW states that it garners significant to devote no more than one-third of its activated channel viewership in the San Francisco-Oakland-San Jose AD! capacity to compliance with the mandatory signal carriage because it provides local programming and reliable broad-

H.R. Rep. No. 628, lO2d Cong., 2d Sess. 97 (1992). absent evidence that such data is not fairly reflective of viewing '° 8 FCC Rcd at 2977 (emphasis in original). in the actual communities in question, we accept such data as 8 FCC Rcd at 2977 n.139. Viewership data cited herein is probative in cases of this type. county data, rather than community-specific data. However, i2 C.F.R. §76.59. ' 8 FCC Rcd at 2981.

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casts of the nightly NBC television schedule. KSBW's final to communities in Santa Clara county through program- argument is that its market should be expanded to cure the ming and news coverage and that its Grade B contour imbalance created by the Commission when it expanded covers all but the southeastern corner of the county. KNTV's must carry rights to include Santa Clara County, 12. In reply to KNTV's opposition,KSBW argues that under the "Home County Rule."14 KSBW's argues that KNTV's filing is a "thinly veiled" attempt to avoid the aside from KNTV, no other Salinas-Monterey television increased competition that will result from the expansion station enjoys the benefit of such an expanded television of its must carry zone. KSBW asserts that such "anti- market. competitive ruminations" do not form a valid basis for 10. In its opposition, KNTV first states that Falcon's rejecting the petition for special relief. KSBW rebuts cable system straddles the Salinas-Monterey ADI and the KNTV's viewership argument by stating that neither the San Francisco-Oakland-San Jose ADI and if the system is 1992 Cable Act nor the Commission's rules establish a not technically capable of segregating the channels pro- particular level of viewership that must be achieved, much vided to each community in those ADIs, it must necessar- less that required to establish significantly viewed status, as ily carry KSBW on a system-wide basis. KNTV argues that a prerequisite to satisfaction of the fourth statutory factor. if this is the case, KSBW's request is moot with regard to KSBW argues that its local service area extends well into the Falcon cable communities and it would not oppose the Santa Clara county providing coverage to the relevant cable addition of those communities into KSBW's market. KNTV communities and that KNTV's demonstration of local cov- argues, however, that the inclusion of the other cable erage to the same communities is irrelevant in this pro- communities is unwarranted. KNTV states, for example, ceeding because the Commission has stated that the third that KSBW's local viewership in cable and noncable homes market modification criterion is not intended to act as a in Santa Clara County is not significant when judged by bar to a station's ADI claim whenever other stations could the Comthission's standard for "significant viewership" for show they also provide local service. KSBW also asserts a network affiliate. KNTV further argues that KSBW has that its deletion from the South Bay system for a shprt failed to show that its coverage of local events fills any period of time does not diminish its historical carriage need that is not already fully met by other stations with showing with respect to the communities served by that must carry rights in the South Bay and Heritage commu- system because the deletion of historically carried stations nities; KNTV asserts that it provides substantial local news is precisely the action which the ADI market modification coverage and other programming relevant to the commu- rules were adopted to prevent and rectify. nities through the broadcast of public service and commu- 13. In reply to KRON's opposition, KSBW suggests that nity affairs programming. KNTV also notes that, standing the Commission should disregard KRON's opposition be- alone, KSBW's history of carriage in the South Bay and cause it is also a veiled attempt to avoid competition. With Heritage communities does not justify expansion of its regard to the statutory factors, KSBW argues that it pro- market. Finally, with regard to the level playing field ar- vides local service to the cable communities through Grade gument and the home county rule, KNTV argues that B contour coverage. Moreover, limiting KSBW's must car- KSBW's desire to be similarly situated i Santa Clara coun- ry zone to that which is presently prescribed, artificially ty should be ignored as it has no legal or factual founda- restricts its service area. As for viewing patterns, KSBW tion. asserts that KRON has not submitted sufficient evidence to 11. KRON, in its opposition, also argues that KSBW has rebut the showing that KSBW has an audience in Santa failed to demonstrate that viewing patterns in the commu- Clara county and in the cable communities at issue. KSBW nities justify its market modification request. KRON asserts also argues that it has a history of carriage on South Bay that because KSBW has used county-wide data to support Cablevision dating back to the inception of cable service its petition and that viewership in Santa Clara county as a for that system; KSBW's recent absence from the system whole is almost negligible, the Commission cannot dis- does not, and should not, diminish its showing in this count the possibility that KSBW receives little or almost no regard. Turning to the third statutory factor, KSBW states viewing in many of the communities it seeks to add. More- that KRON's local coverage is irrelevant as the Commis- over, KRON asserts that the data KSBW submits say noth- sion has discounted coverage of other stations when review- ing about viewership in non-cable homes when compared ing petitions to modify television markets. Finally, KSBW to cable homes. With regard to local coverage, KRON argues that information regarding KNTV's must carry mar- argues that while KSBW's Grade B contour appears to ket is relevant to this proceeding and asks that the Com- encompass the communities it seeks to add, this coverage mission act on its petition to equalize competition between does not in and of itself demonstrate that the communities KSBW and KNTV. should be added to the station's market due to the fact that KSBW does not provide actual programming to the cable communities at issue. KRON also submits that KSBW DISCUSSION historically has not been carried by South Bay Cablevision 14. We shall grant KSBW's request to include the com- as that system dropped KSBW's signal in 1990; KRON munities of Campbell, Cupertino. Gilroy. Los Gatos, stresses that the Commission should recognize that KSBW's Monte Serrano, Morgan Hill, San Martin. San Jose, Santa four year absence from this cable system indicates that the Clara unincorporated portions of Santa Clara County, and cable communities are not part of KSBW's market. On the Saratoga. CA within the Salinas-Monterey AD! for must other hand, KRON argues that it has provided local service carry purposes. At the outset, we note that KSBW's geographic proximity to the cable communities plays an im-

14 See 47 C.F.R. 76.55(e)(3)("lTIhe county in which a station's community of license is located will be considered within its market.")

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portant role in the grant of petitioner's request. Here, FEDERAL COMMUNICATIONS COMMISSION KSBW's city of license, Salinas, CA, is only about 15 miles from the Santa Clara county border. In addition, KSBW's transmitter, atop the Santa Cruz mountains, is located only 20 miles south of San Jose, the major population center for Santa Clara county in northern California and, as noted William H. Johnson above, one of the communities subject to the modification Deputy Chief, Cable Services Bureau petition. 15. With regard to the four statutory factors, we find that KSBW has demonstrated a long history of carriage on the cable systems serving the above communities.'5 As well, KSBW's record of carriage in the South Bay Cablevision cable communities between 1968 and 1990 is probative evidence of historical carriage notwithstanding the fact that KSBW was dropped from this system in 1990. Secondly, KSBW has also shown that it provides coverage of, and service to, these communities as they are all encompassed by its Grade A contour. We have stated previously that such coverage alone may be is sufficient to satisfy this factor.'6 In addition, KSBW has introduced evidence demonstrating that it provides programming to the communities; this fact buttresses our finding that KSBW satisfies the local service element. We acknowledge that KRON and KNTV also cover local events in the subject communities. However, we do not believe that Congress intended for the third criterion to operate as a general bar to a station's AD! claim in every circumstance whenever other stations could also be shown to serve the communities at issue. Rather, we believe that 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. With regard to viewing patterns, the 1995 Nielsen Report data indicate that KSBW has a 3 total share, a 2 cable share, a 6 non-cable share, and 22 cume in Santa Clara county. We believe these numbers indicate a moderate level of viewership particularly when compared to KRON, the local NBC affiliate in Santa Clara county, which has a large percentage of the audience with a 12 total share, 13 cable share, 12 noncable share, and 75

ORDER 16. Accordingly, IT IS ORDERED, pursuant to §614(h)(1)(C) of the Communications Act of 1934, as amended (47 U.S.C. §534(h)(l)(C)) and §76.59 of the Com- mission's Rules (47 C.F.R. §76.59), that the petition for special relief, filed by KSBW License, Inc. IS GRANTED. KSBW shall notify the relevant cable systems in writing of its carriage and channel position elections (76.56, 76.57, 76.64(1) of the Commission's Rules), within thirty (30) days of the release date of this Order. The affected cable systems shall come into compliance with the applicable rules within sixty (60) days of such notification. 17. This action is taken pursuant to authority delegated by §0.321 of the Commission's Rules.

' ' We note that according to the record, KSBW was carried in We also note that our action today harmonizes the market Saratoga for only two years. However, we do not believe this inconsistency resulting from the home county rule by providing point adversely affects the station's petition as other factors, KSBW access to the same cable subscribers in Santa Clara such as Grade A contour coverage, favor inclusion of this county as KNTV currently serves. community into KSBW's ADI. t6 8 FCC Rcd at 2977.

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