DA 95-1339 Federal Communications Commission Record 10 FCC Red No. 14

filed separate responses stating that they would not oppose Before the Commission approval of the settlement agreement as it is Federal Communications Commission written. Washington, D.C. 20554 2. By this filing, the Stations and the Systems seek Com mission approval of a final resolution to a long-standing dispute involving the efforts of KMIR-TV and KESQ-TV to In re: enforce network program nonduplication protection and syndicated program exclusivity against seven VHP stations Desert Empire CSR-3571 licensed to Los Angeles, California2 in the Riverside Coun Television Corporation ty Central region of California. In connection with this petition and contingent upon its grant, the parties have and Gulf-California Broadcast agreed to modify the substantive positions they have pre Company viously taken in this proceeding, and both the Stations and the Systems now support a limited waiver by the Commis Joint Request of Palm Springs sion of the significant viewing exception to the network Stations and Cable System and syndicated programming exclusivity rules. Parties for Approval of Settlement Agreement and for BACKGROUND Associated Relief 3. The Commission©s network program duplication rules allow a local television station to require that a cable system delete network programs as broadcast by any other MEMORANDUM OPINION AND ORDER station if the local station holds the nonduplication rights in its market and requests such deletion.3 The Commis Adopted: June 14,1995; Released: June 26,1995 sion©s syndicated program exclusivity rules operate simi larly with respect to syndicated programming.4 These rights By the Cable Services Bureau: may, on proper notification, be asserted through the li censee©s specified zone against out-of-market stations.5 In each case, however, stations that are significantly viewed in INTRODUCTION a cable system©s community of operation are exempt from 1. Desert Empire Television Corporation, licensee of programming blackout under these rules.6 commercial television station KMIR-TV (NBC, Channel 4. The Palm Springs, California, area of dominant influ 36) and Gulf-California Broadcast Company, licensee of ence ("ADI") consists of Riverside County Central, the commercial television station KESQ-TV (ABC, Channel middle portion of Riverside County, California. KMIR-TV 42), both of Palm Springs, California, along with Warner and KESQ-TV are the only two full service television Cable Communications, Inc., Desert Hot Springs stations licensed to communities in this market. The Sys Cablevision, Inc., and Colony Cablevision of California1 tems operate the three major cable television systems in the (collectively known as "the Stations" and "the Systems") Palm Springs ADI and other portions of Riverside County. filed the above captioned Joint Request for Approval of 5. When the Commission issued its 1972 list of "signifi Settlement Agreement. KTLA Inc., licensee of commercial cantly viewed" stations, the seven VHP stations in Los television station KTLA (Ind., Channel 5) and KCOP Tele Angeles were included on that list as significantly viewed vision, Inc., licensee of commercial television station in Riverside County Central. The Stations and the Systems KCOP (Ind., Channel 13), both of Los Angeles, California, have subsequently engaged in protracted litigation before the Commission with respect to whether the Los Angeles stations are in fact significantly viewed in Riverside County

1 These entities operate cable television systems serving Palm that program as broadcast by any other television signal except Springs, Desert Hot Springs, and Palm Desert, California, re as otherwise provided below." spectively. 5 See 47 C.F.R. §§76.92 and 76.151. 2 The Los Angeles stations include: KCBS-TV (CBS, Channel 6 See §§76.92(f) ("[a] community unit is not required to delete 2), KNBC-TV (NBC, Channel 4), KTLA (Ind., Channel 5), the duplicating network programming of any television broad KABC-TV (ABC, Channel 7), KKJ-TV (Ind. Channel 9), KTTV cast signal which is significantly viewed in the cable television (Ind., Channel 11), and KCOP (Ind., Channel 13). community pursuant to §76.54.") and 76.156(a) ("Notwithstand Section 76.92(a) states that "upon receiving notification pur ing the requirement of §§76.151-76.155, a broadcast signal is not suant to §76.94, a cable community unit located in whole or in required to be deleted from a cable community unit when that part within the geographic zone for a network program, the cable community unit falls, in whole or in part, within that network nonduplication rights to which are held by a commer signal©s grade B contour, or when the signal is significantly cial television station licensed by the Commission, shall not viewed pursuant to §76.54 in the cable community."). carry that program as broadcast by any other television signal, For a network station to be considered significantly viewed, it except as otherwise provided below." must achieve "off-air" a share of viewing hours of at least 3 4 .Section 76.151, the Commission©s syndicated program percent (total weekly hours) and a net weekly circulation of at exclusivity rule, states that "Upon receiving notification pursu least 25 percent. The minimum figures for an independent ant to §76.155, a cable community unit located in whole or in station are 2 percent and 5 percent, respectively. See 47 C.F.R. part within the geographic zone for a syndicated program, the §76.5(1). syndicated exclusivity rights to which are held by a commercial television station licensed by the Commission, shall not carry

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Central and whether, in any event, the significant viewing Central area. Paragraph 2 further provides that Stations© exception to the network and syndicated program exclusiv amended filings shall thereafter request only that the "sig ity rules should or should not be waived so as to require nificantly viewed exception" to the Commission©s network the Systems to comply fully with both rules. nonduplication and syndicated exclusivity rules be waived 6. In the most recent stages of this litigation commencing with respect to the signals of Los Angeles VHP stations to in June L991, the Stations sought waivers of §§76.92(f) and the extent necessary to permit implementation of the agree 76.156(a) of the Commission©s program exclusivity rules so ment, or that the FCC take such other action as may be that they may demand that the local cable system black out required to permit implementation of the agreement. The programming aired by the Los Angeles television stations Stations and the Systems state that Commission approval of carried on the Systems despite their significantly viewed the agreement will eliminate any questions as to whether status. In the alternative, the Stations asked that the Com the "carriage-in-full" provisions of the 1992 Cable Act mission delete the Los Angeles stations from the Commis present a bar to continued voluntary non-duplication ar sion©s 1972 significantly viewed list. The Chief of the Mass rangements among the parties. Finally paragraph 2 pro Media Bureau denied the Stations© request, noting that vides that this modification of the Stations© position before KMIR-TV and KESQ-TV did not submit any "specific jus the FCC shall be contingent upon FCC approval of the tification for departing from our settled policy of not delet agreement. ing stations from our list of significantly viewed signals," 7 10. Paragraph 3 of the agreement provides that the Sys nor did they submit specific audience survey data con tems shall withdraw their opposition to waiver of the "sig templated by the waiver process set forth in KCST-TV, nificantly viewed exception" to the network Inc. The Stations then filed an "Application for Review" non-duplication and syndicated exclusivity rules, and that seeking reversal by the full Commission of the Bureau©s the Systems shall thereafter support waiver of the exception decision. The application for review was opposed by the as may be necessary to enable the Systems to comply with licensees of Los Angeles television stations KCOP and the provisions of the agreement. This paragraph of the KTLA, who also opposed KMIR-TV and KESQ-TV©s initial agreement further provides that the Systems© modification waiver request. of their position before the FCC is also to be contingent 7. While the application for review remains pending, upon FCC approval and that the waiver is expressly con KMIR-TV and KESQ-TV are receiving partial network and ditioned on continuation of the agreement. syndicated exclusivity protection under differing formal 11. According to the parties, the agreement otherwise and informal arrangements with two of the cable systems.9 provides that the Systems will, upon Commission waiver of On October 1. 1993, the Mass Media Bureau granted a the significantly viewed exception: (1) provide the Stations temporary waiver of the significantly viewed exception to with only simultaneous network and syndicated program permit the existing arrangements to continue pending ming exclusivity; (2) that the Stations will broadcast a Commission consideration of the agreement submitted with specified number of promotional spot announcements for this petition. No syndicated exclusivity protection is being the Systems; and (3) that the Stations and the Systems will afforded under this temporary waiver with respect to implement certain measures intended to improve execution KCOP and KTLA. of non-duplication switching functions. The Stations and the Systems note that the Desert Hot Springs system is not presently carrying the signals of the Los Angeles NBC and THE SETTLEMENT AGREEMENT AND ABC network affiliated stations that duplicate the network REQUEST FOR APPROVAL programming of KESQ-TV and KMIR-TV. A number of 8. The Systems and the Stations have concluded that a the provisions in the agreement will apply to the Desert continuation of their dispute serves neither the public in Hot Springs system only if the system resumes carriage of terest nor. the private interests of the parties. Accordingly, either or both of the Los Angeles ABC and NBC network the Stations and the Systems have entered into a long-term affiliates. comprehensive agreement which resolves all points at issue 12. The Stations and the Systems assert that Commission between them. If approved, the "Agreement" will remain approval of the agreement would serve the public interest in effect for an initial term of six years unless terminated in several ways. First, the agreement would put an end to a upon the happening of certain events specified in the long-standing dispute that has drained the resources of the agreement. Moreover, any party to the agreement may parties and the Commission. Second, the agreement would cause it to be extended for an additional six years, through result in no loss of television programming, or of time December 31, 2005. As illustrated below, paragraphs 2 and diversity for television programming, for any cable sub 3 constitute the core of the agreement. scriber. Third, the agreement would have no material 9. Paragraph 2 of the agreement provides that Stations adverse impact on any other station. In this regard, the will amend their July 11, 1991 "Petition for Special Relief Stations and the Systems state that the amount of program and their pending "Application for Review" to withdraw ming that would be affected is presently very small and is their request that the Commission delete the seven Los unlikely to be significant in the future. Neither KESQ-TV Angeles VHP television stations from the list of stations nor KMIR-TV currently broadcasts any programming that deemed "significantly viewed" in the Riverside County simultaneously duplicates programs of KCOP and KMIR-

7 See 1 FCC Red at 4216. 9 It is important to note that the Desert Hot Springs system is 8 See 103 FCC 2d 407, 413 (1986). In this case, the Commission not presently carrying any duplicating network stations from held that a station©s significantly viewed status could be rebut Los Angeles. ted only through the use of system or community specific audience survey data demonstrating a station©s failure to achieve the required viewing levels for two consecutive years.

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TV broadcasts only one half hour of programming per 15. The agreement will not be detrimental to the inter weekday that simultaneously duplicates a program broad ests of the viewing public because there is no loss of cast by KTLA and that simultaneous duplication was sched television programming, or of time diversity for television uled to end in January, 1994. Additionally, the Los Angeles programming, for any cable subscriber. In addition, this ADI, with nearly five million TV households is much agreement puts an end to a long-standing dispute. This has larger than the Palm Springs ADI, which only has a total the beneficial effect of saving Commission resources that of about 90.000 households. As such, the provision of a would have been required to resolve further controversies very limited amount of syndicated programming exclusivity in this proceeding. We also find that the provision of a by Palm Springs cable systems will not have any material very limited amount of syndicated programming exclusivity adverse impact on either KCOP or KTLA. The Stations and by Palm Springs cable systems will not have any material the Systems conclude by stating that, in view of the com adverse impact on either KCOP or KTLA because the pelling public interest considerations presented above, the limited nature of the requested waiver and the fact that the Commission should approve the attached agreement and Palm Springs television market is significantly smaller waive the significant viewing exception to the network and when compared to the Los Angeles television market. syndicated exclusivity rules to the limited extent required KCOP and KTLA, which have voiced their opposition to to permit effectuation of the agreement. KMIR and KESQ©s waiver requests in the past, do not 13. KTLA and KCOP, in separate comments, state they oppose the current settlement agreement. Similarly, no will not oppose approval of the agreement. KTLA, how other Los Angeles television station has filed objections. ever, continues to believe that its status as a significantly viewed signal in Palm Springs is justified and wishes to do everything possible to protect its service to the residents of ORDER that area. Thus, KTLA does not agree with the parties that 16. Accordingly, IT IS ORDERED, that the Joint Re implementation of the agreement will have only a de quest of Palm Springs Stations and Cable System Parties for minimis impact upon it and other Los Angeles stations. Approval of Settlement Agreement and for Associated Re Nevertheless, KTLA recognizes the limited nature of the lief, finally resolving CSR-3571, filed by Desert Empire relief now requested by the parties and the unique factual Television Corporation, Gulf-California Broadcast Com circumstance presented by this case. As such, KTLA©s ac pany, Colony Cablevision of California, Warner Cable quiescence is contingent upon the terms of the agreement Communications, and Desert Hot Springs Cablevision, Inc. as it is written but reserves the right to object to any IS AFFIRMED. expansion of the scope of the agreement or to any addi 17. IT IS FURTHER ORDERED, that §§76.92(0 and tional waivers of the Commission©s rules. As for KCOP, it 76.156(a) of the Commission©s rules regarding the signifi states that while it also disagrees that the agreement has cantly viewed exceptions to the Commission©s network only a de minimis impact, it also recognizes that this case is nonduplication and syndicated exclusivity rules, ARE unique, and in order to resolve the dispute, will not object WAIVED to the extent necessary for the settlement agree to the agreement as it is written. KCOP also expressly ment to take effect. reserves its right to oppose any waiver of the rules other 18. This action is taken by pursuant to authority dele than as set forth in the agreement. gated by §0.3321 of the Commission©s rules.

DISCUSSION FEDERAL COMMUNICATIONS COMMISSION 14. The keystone of the Stations© past efforts in this matter have been to attain waivers of §§76.92(0 and 76.156(a) of the Commission©s program exclusivity rules so that they may demand that the cable systems serving River side County Central black out programming aired by the William H. Johnson Los Angeles television stations carried on the Systems de Deputy Chief, Cable Services Bureau spite their significantly viewed status. We find the settle ment agreement proposed by the parties, which gives the Stations simultaneous network and syndicated program ming exclusivity, resolves a prolonged dispute in a manner consistent with the public interest. We accordingly treat the petition for review as a petition for reconsideration, affirm the settlement agreement and waive §§76.92(0 and 76.156(a) of the Commission©s Rules, the significantly viewed exceptions, to the extent requested by the parties. 1" The Stations also have repeatedly asked that the Commis sion delete the seven Los Angeles stations from the Com mission©s 1972 significantly viewed list. However, as part of the settlement, the Stations have agreed to withdraw this request. As such, we refrain from deleting the Los Angeles stations from our 1972 list of significantly viewed stations.

10 We have held that settlement agreements, at least in the area public, and allow [the Commission) to preserve [its] limited of comparative licensing proceedings, "are an efficient way to resources." Formulation of Policies and Rules Relating to Broad resolve .... proceedings, preserve funds for service to the cast Renewal Applicants, 4 FCC Red 4780, 4784 (1989).

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