$//Grant of WLOX-TV's ADI modification petition, DA 96-262//$ $/76.7 Special relief and must-carry complaint procedures/$ $/76.59 Modification of television markets/$ $/300.534 Carriage of local commercial television signals/$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 2054 DA 96-262 In re) ) Liberty Corporation ) CSR-4110-A Biloxi, Mississippi ) ) For Modification of the Biloxi-Gulfport- ) Pascagoula, Mississippi ADI ) MEMORANDUM OPINION AND ORDER Adopted: February 28, 1996 Released: March 20, 1996 By the Cable Services Bureau: INTRODUCTION 1. Liberty Corporation, licensee of Station WLOX-TV (ABC, Ch. 13), Biloxi, Mississippi, has filed a petition for special relief seeking to include the communities of Picayune, Kiln, Lucedale, and the unincorporated areas of Hancock County, Mississippi in the Biloxi-Gulfport-Pascagoula, Mississippi ADI for purposes of the Commission's mandatory signal carriage rules. An opposition to this petition was filed on behalf of Rampart Operating Partnership, licensee of Station WWL-TV (CBS, Ch. 4), New Orleans, Louisiana to which WLOX-TV has responded. BAC KGROUND 2. Pursuant to 614 of the Communications Act and implementing rules adopted by the Commission in its Report and Order in MM Docket 92-259, commercial television 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. 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. 3. Under the Act, however, the Commission is also directed to consider changes in ADI areas. Section 614(h)(1)(C) provides that the Commission may: with respect to a particular television broadcast station, include additional communities within its television market or exclude communities from such station's television market to better effectuate the purposes of this section. In considering such requests, the Act provides that: the Commission shall afford particular attention to the 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 eligible to be carried by a cable system in such community in fulfillment of the requirements of this section provides news coverage of issues of concern to such community or provides carriage or coverage of sporting 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. 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 consistent with Congress' objective to ensure that television stations be carried in the areas which they serve and which form their economic market. * * * * * [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 B 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 factor concerns viewing patterns in the cable community in cable and noncable homes. Audience data clearly provide appropriate evidence about this factor. 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 households, such surveys may need to be supplemented with additional data concerning viewing in cable homes. 6. In adopting rules to implement this provision, the Commission indicated that changes requested should be 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 applicable in common to all stations in the market. 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. 7. Adding communities to a station's market area generally 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 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 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 one local station affiliated with a particular broadcast network. 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. 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 affiliated stations are entitled to carriage priority. MODIFICATION ARGUMENTS 8. The communities in question are located in Pearl River and Hancock Counties, Mississippi which are considered to be part of the New Orleans, Louisiana ADI and George County, Mississippi which is considered to be part of the Mobile, Alabama-Pensacola, Florida ADI. WLOX-TV is located no more than 35 miles from the communities herein and its Grade A contour encompasses all of the communities. 9. In support of its petition, WLOX-TV states that it was informed by Gulf American Cable, the system serving the subject communities, that its carriage would be terminated in favor of Television Broadcast Station WVUE (ABC, Ch. 8), New Orleans, Louisiana, in Pearl River and Hancock Counties and Station WEAR-TV (ABC, Ch. 3), Pensacola, Florida, in George County. WLOX-TV points out that Pearl River and Hancock Counties are directly adjacent to the Biloxi ADI and George County, although part of the Mobile ADI, is in the center of the Biloxi ADI and artificially separates the northern and southern portions of the market. WLOX-TV argues that it is the most popular ABC station in the three subject counties and its deletion would deprive Gulf American subscribers of the only ABC station to provide local, in-state programming. Petitioner states that it fully meets all of the established modification criteria: a) it has been historically carried in all of the communities since system activation; indeed, it continues to be carried on alternative cable systems in Picayune and Lucedale; b) its signal is significantly viewed in all three counties; c) it places a Grade A contour over all of the communities while WEAR-TV places only a partial Grade B contour over George County and WVUE barely places a Grade A contour over the extreme southern portions of Hancock and Pearl River Counties; d) it provides regular and extensive coverage of news and local events in the three counties and is the only Biloxi market station with a full-time news bureau in Hancock County; alternatively, neither WVUE nor WEAR- TV have a news bureau in Mississippi and offer little coverage of local news; e) it is the only Mississippi station carried on the systems to provide news coverage from the state capital; f) the 1993 A.C. Nielsen county coverage surveys indicate that it receives a substantially larger share of viewership than do the other ABC stations. 10. In its opposition, WWL-TV argues that to grant WLOX-TV's request could open a floodgate of such requests and would be in contravention to Congress' intent in adopting the ADI market concept for signal carriage purposes. It maintains that the modification process was designed to provide flexibility in those anomalous situations inconsistent with Congress' objective of ensuring carriage of TV stations "in the areas which they serve and which form their economic market. WWL-TV avers that the instant situation does not fit this category because the compact, adjacent nature of the Biloxi and New Orleans markets allows viewers to watch signals from both markets. Finally, despite WLOX-TV's assertions, WWL-TV states that it has long been carried on the Gulf American cable system and it provides programming specific to the concerns of the communities herein. 11. WLOX-TV states in opposition that WWL-TV's arguments provide no basis for denial of its request and in fact seem to be addressed more to overall policy than to a specific proceeding. Moreover, WWL-TV's contention that only situations of market incontiguity justify modification expressly fit the situation herein where the Biloxi market is separated by George County. DISCUSSION 12. We shall grant WLOX-TV's request to include the communities of Picayune, Kiln, Lucedale and the unincorporated areas of Hancock County, Mississippi within the Biloxi- Gulfport-Pascagoula, Mississippi ADI for must carry purposes. First, WLOX-TV has demonstrated a long history of carriage on the cable system serving the communities. Secondly, WLOX-TV has shown that it provides coverage of and service to these communities and that they are all encompassed by its Grade A contour. We have stated previously that this, alone, is sufficient to satisfy this factor. Third, WLOX-TV's showing with regard to local programming augments this finding. While we acknowledge that WWL- TV's showing indicates that it also covers local events in the subject communities, we do not believe that Congress intended for the third criterion to operate as a bar to a station's ADI claim whenever other stations can 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. Moreover, it is noteworthy that the only objection filed in this proceeding was by a CBS station and that neither of the ABC stations mentioned herein provided an opinion. With regard to viewing patterns, the 1995 A.C. Nielsen County/Coverage Study indicates that for Pearl River, Hancock and George Counties WLOX-TV achieves total viewing shares of 15%, 13% and 36% and net weekly shares of 57%, 59% and 92%, respectively. The shares for the other market ABC stations, WEAR-TV and WVUE, for the same areas are substantially less. We recognize that this data is county data, rather than community-specific data, but we shall accept it as probative (although not conclusive) in cases of this type, absent evidence that it is not fairly reflective of viewing in the actual communities in question. Finally, we note the unusual nature of the Biloxi market in relation to the Mobile market whose only Mississippi county centrally bisects the Biloxi ADI. ORDER 13. In view of the foregoing, we find that grant of WLOX-TV's petition is in the public interest. 14. Accordingly, IT IS ORDERED, pursuant to 614(c) 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 captioned petition for special relief, filed by Liberty Corporation, IS GRANTED. This change shall be effective in accordance with the following schedule: WLOX-TV shall notify the cable system in question in writing of its carriage and channel position elections, see 47 C.F.R. 76.56, 76.57, 76.64(f), within thirty (30) days of the release date of this Memorandum Opinion and Order. The affected cable system shall come into compliance with the applicable rules within 60 days of such notification. 15. 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