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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In re: ) ) Paragon Communications ) CSR-5205-A ) CSR-5206-A For Modification of the ADI of ) Television Broadcast Station KMPX,) Decatur, Texas ) MEMORANDUM OPINION AND ORDER Adopted: September 15, 1998 Released: September 18, 1998 By the Deputy Chief, Cable Services Bureau: INTRODUCTION 1. Paragon Communications ("Paragon"), filed the above-captioned petitions for special relief seeking to modify the Dallas-Ft. Worth, Texas, Area of Dominant Influence (ADI) relative to television broadcast station KMPX (Channel 29), Decatur, Texas. Specifically, Paragon requests that KMPX be excluded, for purposes of the cable television mandatory broadcast signal carriage rules, from its Palestine and Commerce, Texas, cable systems. Oppositions to these petitions have been filed on behalf of KMPX to which Paragon has replied. BACKGROUND 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 market areas. Section 614(h)(l)(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 1992 Cable 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 in 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 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 demon- strated 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. As for deletions of communities from a station's market, the legislative history of this provision indicates that: The provisions of [this subsection] reflect a recognition that the Commission may conclude that a community within a station's ADI may be so far removed from the station that it cannot be deemed part of the station's market. It is not the Committee's intention that these provisions be used by cable systems to manipulate their carriage obligations to avoid compliance with the objectives of this section. Further, this section is not intended to permit a cable system to discriminate among several stations licensed to the same community. Unless a cable system can point to particularized evidence that its community is not part of one station's market, it should not be permitted to single out individual stations serving the same area and request that the cable system's community be deleted from the station's television market. 7. In adopting rules to implement this provision, the Commission indicated that requested changes 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 1992 Cable Act, that a station not be deleted from carriage during the pendency of an ADI change request. MARKET FACTS AND ARGUMENTS OF THE PARTIES 8. The systems here in question are located in the counties of Anderson, Delta and Hunt, Texas and are part of the Dallas-Ft. Worth ADI. Decatur, Texas, the city of license of KMPX is also a part of the same ADI. KMPX is approximately 150 miles from Palestine and 100 miles from Commerce. 9. In support of its petitions, Paragon states that KMPX has never been carried on its systems, despite having been on the air since 1993. In addition, Paragon states that none of the systems' communities herein fall within KMPX's Grade A or Grade B contour. Indeed, it points out that KMPX's city of license is approximately 150 miles from Palestine, the closest of that system's communities, and its Grade B contour falls approximately 65 miles short of Palestine. With regard to the Commerce system, Paragon indicates that KMPX is approximately 100 miles from the closest community of Commerce and the station's Grade B contour falls 25 miles short of that city. KMPX argues that these distances are well beyond the distances involved in other recent modification cases where the Commission granted the requested exclusion. Moreover, Paragon states that KMPX provides no programming of specific local interest for the Anderson, Delta or Hunt county areas and its schedule is not published by the Palestine daily newspaper, the Herald-Press or the Commerce paper, The Commerce Journal. In any event, Paragon asserts that its systems' subscribers are provided with extensive and more focused coverage of local news and events through the local stations they currently carry. Paragon indicates for instance that, due to its location in a somewhat remote area of Texas, its Palestine system receives Grade A television service from only one station, KETK-TV, and only one other station, KLTV, covers one-half of Anderson County with its Grade B contour. Both of these stations, it argues, engage in news, public affairs and public service coverage which is designed to meet their respective service areas, which includes Anderson County. Paragon also argues that KMPX does not achieve any measurable viewing in Anderson, Delta or Hunt Counties and it does not appear in the Shreveport-Texarkana or Dallas-Ft. Worth editions of TV Guide. Finally, Paragon states that KMPX has requested carriage on its Palestine system based on its satellite distribution by Echostar's The Dish Network, but Paragon argues that the potential availability via satellite does not negate the distance factor or KMPX's remoteness from the Palestine area. Nevertheless, Paragon requests that the Commission rule that KMPX could not be converted by satellite transmission into a "local" station. 10. In opposition, KMPX argues that it is undisputed that it is located within the same market as Paragon's cable systems. Indeed, KMPX maintains that Paragon's carriage of more distant Dallas stations shows that the Palestine and Commerce cable systems are "strongly connected" to the Dallas market which KMPX serves. KMPX points out that a) its tower site is closer to both Palestine and Commerce than the Dallas stations the systems currently carry, b) only 1 of the 10 stations carried by Paragon on its Palestine system provides Grade A coverage while none of the 15 stations carried by Paragon's Commerce system provides any Grade B coverage, and c) Palestine and Commerce are only 20 and 25 miles, respectively, from KMPX's Grade B contour. KMPX argues that its lack of historical carriage should not be considered to be definitive, particularly as it is carried by all of the cable operators in Dallas. Moreover, it asserts that Paragon's carriage of other Dallas stations while refusing to carry KMPX is contrary to Congress' intention that the market modification procedures not be used by cable operators "to discriminate among several stations." KMPX states further that Paragon has provided no evidence that the Dallas stations and KMPX target their programming to different geographic markets or that the programming of the Dallas stations it carries is in any way targeted specifically to Palestine and Commerce. In any event, KMPX states that it provides locally-oriented programming that covers events and organizations of local interest to residents of the Palestine and Commerce areas. KMPX maintains that although it does not provide Grade B coverage to either Palestine or Commerce, it nevertheless provides a quality off-air signal to Paragon's headends. Alternatively, KMPX states that its signal can be picked up via satellite on the 24 hour Spacenet 3, Channel 13. Finally, KMPX states that the Commission should give little weight to its lack of audience ratings due to its religious specialty format. It points out that the Commission had recognized that specialty stations attract limited audiences, a factor which must be taken into account in determining the equities concerning a station's right to cable carriage. Similarly, KMPX argues that its omission from Palestine's and Commerce's daily newspapers and the Dallas-Ft. Worth edition of TV Guide should be disregarded. KMPX states that TV Guide routinely does not list the programming of any religious stations. In addition, KMPX indicates that its schedule is listed in the Dallas Morning News which has a larger circulation in Palestine and Commerce than does the Herald-Press or The Commerce Journal. 11. In reply, Paragon reiterates its original arguments and states that its proposed market modification requests are fully consistent with Congressional intent, the 1992 Cable Act and Commission precedent. Paragon argues that KMPX inappropriately attempts to fashion itself a Dallas station simply because its transmitter is located in the Dallas area and then claims discrimination due to the Palestine and Commerce cable systems' carriage of Dallas stations. However, Paragon points out that KMPX is licensed to Decatur, Texas and is approximately 35 miles from the center of Ft. Worth. Moreover, Paragon points out that while the 1998 Television & Cable Factbook directly links the closer cities of Arlington and Greenville, Texas as part of the Dallas-Ft. Worth metropolitan area, it does not list Decatur. Paragon states, therefore, that KMPX's reliance on TWI Cable, supra, is misplaced as that decision involved a cable system which carried five other stations licensed to the same city as the station it was attempting to exclude. Paragon states further that not only have the Dallas-Ft. Worth stations been historically carried on its Palestine and Commerce cable systems, but they provide local news programming of interest to the residents. Paragon maintains that KMPX has failed to demonstrate that it provides any significant amount of programming which is particularly directed to either Palestine or Commerce and the minimal examples it provided are insufficient to create a nexus between KMPX and the instant communities. In addition, Paragon argues that KMPX's claim of carriage by all of the Dallas cable systems is not only unsupported but would have little relevance to its carriage in Palestine and Commerce. It points out that KMPX has not provided any evidence of its carriage on any cable systems operating in or around Delta, Hunt or Anderson Counties, where the cable systems are located. Finally, Paragon argues that while KMPX relies on its specialty station status as a reason for its lack of viewership, it should be noted that the Bureau has held that "the fact that a station is new or has a specialized appeal does not mean that its logical market is without limits or that it should be exempt from the Section 614(h) market modification process." DISCUSSION 12. We will grant Paragon's modification requests. Based on geography and other relevant information, we believe that the cable systems herein are sufficiently removed from KMPX that the communities ought not be deemed part of the station's market for mandatory carriage purposes. 13. As an initial matter, we note that, according to the legislative history of the 1992 Cable Act, the use of ADI market areas is intended "to ensure that television stations be carried in the areas which they service and which form their economic market." Changes may be sought and granted by the Commission "to better effectuate the purposes" of the mandatory carriage requirements. The market change process incorporated into the Communications Act, however, is not intended to be a process whereby cable operators may seek relief from the mandatory signal carriage obligations apart from the question of whether a change in the market area involved is warranted. When viewed against this backdrop, and considering all of the relevant factual circumstances in the record, we believe that Paragon's deletion petitions appear to be a legitimate requests to redraw ADI boundaries to make them congruous with market realities. Paragon's actions do not reflect an intention to skirt its signal carriage responsibilities under the 1992 Cable Act and the Commission's Rules, nor do they evidence a pattern of discriminatory conduct against the station. Historic Carriage 14. KMPX began operation in 1993. Despite being on-the-air for five years, it has no history of carriage on the Palestine and Commerce systems nor does the station appear to be carried on any other cable system in Delta, Hunt or Anderson Counties. Given the statutory directive, weight must be given to this factor, but that must be done bearing in mind that the objective of the Section 614(h) process is to "better effectuate the purposes" of the broadcast signal carriage scheme. Thus, with respect to the question of historical carriage patterns, attention must be paid to the circumstances from which such patterns developed. Some stations have not had the opportunity to build a record of historical carriage for specific reasons that do not necessarily reflect a judgment as to the geography of the market involved. Therefore, the historical carriage factor -- to the extent such lack of carriage is reflective of factors outside of the shape of the market -- is not by itself controlling in these circumstances because such an implementation of the 1992 Cable Act would, in effect, prevent weaker stations, that cable systems had previously declined to carry, from ever obtaining carriage rights. As such, the evidence relating to this statutory factor does weigh in favor of excluding Paragon's cable systems from KMPX's market but is not outcome determinative by itself. Grade B Coverage/Local Service 15. A station's local service to cable communities is one of the relevant factors to consider in this particular case that is not influenced by the type or age of the station involved or historical carriage. Service may be measured through geographic means: by examining the distance between the station and the cable communities subject to the deletion request and taking into account natural phenomena such as waterways, mountains and valleys which tend to separate communities. A station's broadcast of local programming, which has a distinct nexus to the cable communities, is also evidence of local service. Finally, a station's Grade A or Grade B contour coverage is an additional indicator of local service and we will weigh the presence or absence of such technical coverage accordingly. In the instant case, while KMPX, which broadcasts primarily religious programming, appears to be making some attempts to provide locally-oriented programming, the examples cited are too few to conclude that KMPX has a specific nexus to the Palestine or Commerce areas. Further, the cable communities involved lie outside of KMPX's predicted Grade B contour by anywhere from 25 to 65 miles. Decatur, Texas, the city of license of KMPX, is located approximately 100 to 150 miles from Commerce and Palestine. Carriage of Other Stations 16. We also believe that Paragon's carriage of other local television stations provides support for the action requested. Where a cable operator is seeking to delete a station's mandatory carriage rights in certain communities, the issue of local coverage by other stations becomes a factor to which we will give greater weight than in cases where a party is seeking to add communities. In this case, the Dallas-Ft. Worth, Tyler and Jacksonville stations carried by Paragon have a closer nexus to the cable systems herein. We find unconvincing KMPX's argument that it should be considered a Dallas, Texas station and is thus experiencing discrimination in not being carried due to the fact that Paragon carries other Dallas television stations. KMPX is licensed to Decatur, Texas, and we find no evidence that that city is considered to be part of the same metropolitan area as Dallas. Thus, KMPX's reliance on the Commission's action in TWI Cable, supra, is misplaced, as the station requested for deletion in that case was licensed to the same city as other stations which the cable system carried. These market facts, coupled with the distance between the cable system and KMPX, supports Paragon's arguments under the third factor. Viewership 17. Paragon also shows that KMPX has no audience in Delta, Anderson and Hunt County. Moreover, the A.C. Nielsen 1997 County/Coverage Survey for these three counties does not even list KMPX. This dearth of viewership is of evidentiary significance when tied with the lack of both historical carriage and Grade B coverage. KMPX correctly notes that the Commission has recognized that specialty stations, such as itself, typically attract limited audiences. Consequently, while of some significance, we will not heavily rely upon this factor. Summary 18. We have carefully considered each statutory factor in the context of the circumstances presented here. Given the evidence as to the lack of Grade B coverage, the lack of viewership in Anderson, Delta and Hunt Counties, the lack of carriage of KMPX by any other cable system in these counties, and the minimal local programming, we conclude that it is logical and consistent with the objective of Section 614 of the Communications Act to delete Paragon's cable systems from KMPX's market for mandatory carriage purposes. ORDERING CLAUSES 19. Accordingly, IT IS ORDERED, pursuant to 614(h) 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 petitions for special relief (CSR-5205-A and CSR-5206-A) filed on behalf of Paragon Communications ARE GRANTED. 20. This action is taken pursuant to authority delegated by 0.321 of the Commission's Rules, 47 C.F.R. 0.321. FEDERAL COMMUNICATIONS COMMISSION William H. Johnson Deputy Chief, Cable Services Bureau