Docket
No. 17164 File No. CATV 100-11; File No. CATV 100-103
FEDERAL
COMMUNICATIONS COMMISSION
6
F.C.C.2d 837 (1967); 9 Rad. Reg. 2d (P & F) 800
RELEASE-NUMBER:
FCC 67-156
February
1, 1967 Adopted
BY THE COMMISSION: COMMISSIONERS BARTLEY, COX, AND JOHNSON
CONCURRING IN PART AND DISSENTING IN PART AND ISSUING STATEMENTS.
OPINION:
[*837] 1. The following are before us for
consideration:
(a) ATR requests authority to supply to the Vumore Co.'s CATV system in
Albuquerque (the 100th television market) the four Los Angeles VHF commercial
independent television signals. n1
Additionally, Vumore would carry the four local Albuquerque signals.
n1 The Los Angeles
signals would be provided to Vumore by ATR's microwave application
(3611-C1-P-66), now on file but not yet processed. The application, when
processed, will be consolidated with this proceeding.
(b) Santa Fe Cablevision proposes to operate a system in Santa Fe, also
in the Albuquerque market, carrying the four Albuquerque signals, the six
distant independent commercial signals from Los Angeles, together with the
independent VHF commercial signal from Phoenix, Ariz.
ATR's request (filed April 6, 1966) is opposed by the three commercial
Albuquerque stations; Santa Fe Cablevision's request (filed September 6, 1966)
is opposed by two of the Albuquerque stations (channels 4 and 13).
2. The Albuquerque market has a net weekly circulation of 179,300
TV homes. The city has assigned to it channels 4 (NBC), *5 (educational),
7 (ABC), and 13 (CBS), all licensed and operating, plus channels 14, 23, and
*32, for which no applications are pending.
3. Vumore (holder of a permit granted to it by the city on
February 19, 1957) n2
proposes to operate in Albuquerque (population 201,189), in Bernalillo County
(population 262,199). The county constitutes the Albuquerque standard
metropolitan statistical area. In support of its request, ATR relies on
the general contention that its system would provide Albuquerque subscribers
vastly expanded programing, and [*838] would at the same time
afford an immediate audience for any new UHF stations. The supplying of
the first independent programing to the city of Albuquerque is insufficient in
this case to support the request for a waiver of the hearing
requirements. The reasons advanced do not clearly meet our concern for
the preservation of UHF potential. The proposed CATV community is the
central city in the market, and contains the great bulk of the TV homes within
the Albuquerque census areas and within the predicted grade A contour area of
the market TV homes in this area would provide the prime base of support for
new local UHF stations. Hearing thus seems necessary.
n2 No position is
taken at this time with respect to the challenged Vumore franchise. The
question whether ATR has a valid customer will be considered when action is
taken on the microwave application.
4. Santa Fe (population 34,676), in Santa Fe County (population
44,970), is approximately 55 miles from Albuquerque and beyond the market
census areas. Santa Fe Cablevision urges approval of its proposal,
pointing to the attraction of improved and diversified television reception in
the area. A waiver of hearing in the circumstances of this proposal would
serve the public interest. Santa Fe, 55 miles from Albuquerque and at the
fringe of the market, is in a comparatively sparsely populated neighboring
county. In view of the location and size of the community, new UHF
stations in Albuquerque would appear to be minimally dependent upon Santa Fe
for significant support. Nor does there appear to be substantial
likelihood that there will be activation in the near future of the Santa Fe
allocations for local programing. Santa Fe has allocated four channels --
2, *9, 11, and 19. However, the only channel in which any interest has
been shown is channel 2, and, when activated, this station proposes to
duplicate the CBS programming of the parent CBS station in Albuquerque.
Accordingly, It is ordered, This 1st day of February 1967, that the
provisions of section 74.1107 of the rules Are waived in order to permit Santa
Fe Cablevision's CATV system to carry, as proposed, the distant signals from
Los Angeles and Phoenix. It is further ordered, Pursuant to sections
4(i), 303, and 307(b) of the Communications Act and section 74.1107 of the
Commission's rules, that, with respect to the petition filed by American
Television Relay, Inc., Hearing is ordered on the following issues:
1. To determine the present and proposed penetration and extent
of CATV service in the Albuquerque market.
2. To determine the effects of current and proposed CATV service
in the Albuquerque market upon existing, proposed, and potential television
broadcast stations in the market.
3. To determine (1) the present policy and proposed future plans
of respondents with respect to the furnishing of any service other than the
relay of the signals of broadcast stations; (2) the potential for such
services; and (3) the impact of such services upon television broadcast
stations in the market.
4. To determine whether the CATV proposals are consistent with
the public interest.
American Television Relay, Inc., Vumore Co., Hubbard Broadcasting Inc.,
New Mexico Broadcasting Co., Inc., and WGAL Television, Inc., are parties to
this proceeding and, to participate, must comply with the applicable provisions
of section 1.221 of the Commission's rules. The burden of proof is upon
petitioner. A time and place for the hearing will be specified in another
order.
FEDERAL COMMUNICATIONS COMMISSION, BEN F. WAPLE, Secretary.
STATEMENT OF COMMISSIONER KENNETH A. COX
I concur in the designation of American Television Relay's request for hearing,
but dissent to the waiver of the rules to permit Santa Fe Cablevision Co. to
carry the distant signals of one Phoenix and six Los Angeles stations. I
think this latter action is inconsistent with our rules and involves an
abdication of the Commission's important allocations responsibilities.
Santa Fe is within the predicted grade A contours of the stations in
Albuquerque, the 100th largest market in the country. Section 74.1107 (a)
provides that no CATV system thus operating within the grade A contour of a
television station in the 100 largest markets shall extend the signal of a
television station beyond the latter's grade B contour, except upon a showing,
in a hearing, that such extension would be consistent with the public interest,
and specifically the establishment and maintenance of television service in the
area. In paragraph 141 of the Second Report and Order in dockets Nos.
14895 et al., 2 FCC 2d 725, at 782, we said of the hearings to be held in such
situations:
In this way, the Commission will be able to explore in depth the
details of the proposed CATV operation, the marketing studies which have been
made relating to it (by either the CATV or broadcast groups in the area), the
present and potential picture as to television broadcasting in the market, the
positions and showings of the interested CATV and broadcast parties, the
possible plans or potential of the proposed CATV operation for pay-TV, and
other important facets. After such exploration, the Commission will be in
a position to make an informed judgment directed to the facts of a particular
case.
A party seeking waiver of the rule providing for a hearing should
certainly be required to make a showing as substantial as would be needed to
obtain a result favorable to his position in a hearing -- if not more.
Our CATV rules were adopted after a protracted proceeding involving careful
presentations by many parties. They represent our best judgment as to how
to deal with the problem of fitting CATV operations into our television system
in a constructive, rather than a destructive, way. While I dissented to
some aspects of the rules for reasons stated at the time, they are our rules --
and, unless they are amended, I think they should be enforced. As with
all our rules, however, I recognize that there may be unusual situations in
which it would be inappropriate to apply the rules, so that waivers should be
granted. But this should be done only on a clear showing that application
of the rule "works against the public interest in the particular
case" -- and waiver applications should not be employed to seek amendment
of the rule itself. Storer Broadcasting Co., 14 R.R. 742, 746-747.
Santa Fe Cablevision has made no such showing -- or anything
approaching it. On September 6, 1966, it filed a notification pursuant to
[*840] rule 74.1107. This acknowledged that Santa Fe is within the
grade A contours of the Albuquerque stations, and that Albuquerque is the 100th
market. It listed the distant signals it proposed to carry, and recognized
that waiver of section 74.1107 of the rules would be necessary. In
support of its waiver request it said:
It is considered that the proposed CATV operation is consistent with
the public interest because: (1) It will improve television reception in the
area; (2) it will provide to the communities [sic] in question a greater
diversity of competitive television services; (3) in particular, it will bring
to the communities [sic] commercial independent television services which will
be competitive with the network services now available to the area.
The proposed CATV operation should have no significant adverse effect
upon the existing television stations in the area which will be carried by the
system and accorded protection from duplication of their network and other
programs.
The last sentence is entirely conclusionary in nature and suggests no
grounds for waiver, since the Commission clearly indicated in the Second Report
that carriage and nonduplication were not enough to insure protection of the
public interest in expanded television service in the major markets. The
first sentence simply system that the cable system will provide Santa Fe with
improved signal reception and with added choice of signals, including those of
nonnetwork stations. That is true of nearly all CATV systems, but the
Second Report makes clear, again, that concern about the importation of distant
signals -- quite commonly including those of independent stations -- was the
basis for adopting section 74.1107, so can hardly constitute grounds for
waiving it. Apparently recognizing the inadequacy of these statements as
grounds for waiver, Santa Fe Cablevision added that "a more detailed
request for such a waiver will be filed shortly." No such statement was
ever filed.
Instead, the only other document filed by the cable company was a
reply, dated November 7, 1966, and addressed to oppositions filed by two of the
Albuquerque television stations. This pleading, after pointing out that
KOB-TV was apparently in error in claiming that KVSF-TV -- which has a
construction permit for Santa Fe -- would be an independent station, goes on to
reiterate that its purpose is to bring independent programing to the
area. It then says:
* * * The Commission recognized, in its Second
Report and Order, that the public was entitled to a minimum of at least one
independent service and there appears to be no valid reason why the people in
the Santa Fe area should not have the same varied amount of television
programing as exists in other parts of the country.
No specific portion of the Second Report is cited, and I recall no
suggestion that everyone was to be provided at least one independent service
via CATV. Certainly, the whole Second Report, as it deals with the
distant signal problem, is concerned with preserving the possibility for
additional local stations which would serve everyone in the area, instead of
just those able to receive and pay for cable service. But this concern
led us to establish procedures designed to insure that the importation of
distant signals for the few would not impair the chances of the many to get
expanded signal choice. Santa Fe Cablevision's argument, bluntly stated,
is that those who live in any community [*841] with cable service, and
who can afford it, are entitled to as much program choice as the residents of
New York City and Los Angeles, despite the risk of adverse impact on the
service available to others. This argument was urged by the CATV industry
in our rulemaking proceeding and was rejected in the Second Report. It is
no ground for waiver here.
The only factual argument advanced in support of the waiver request is
that the Santa Fe cable system cannot expect to attract more than approximately
5,000 subscribers, and that this is a very small percentage of the total homes
served by the Albuquerque stations. This is a sort of "divide and
conquer" approach which overlooks the cumulative impact of approving
waiver of our rules by considering the problem community by community.
KOB-TV points out in its opposition that the Albuquerque stations, in order to
achieve a net weekly circulation of 179,300, must attract viewers in 32
counties in New Mexico, Colorado, and Utah. If every community in this
service area -- which extends far beyond the stations' grade B contours -- is
to be permitted to receive the seven distant signals proposed for Santa Fe,
except for those in Bernalillo County where the Commission is requiring a
hearing, then it seems clear that the Albuquerque stations' far flung audience
will be seriously fragmented, with consequent impact on the broadcasters'
ability to serve their audiences and on the likelihood that other stations will
be built in the area.
Perhaps a case could be made for a waiver in Santa Fe, but it most
certainly is not made in the 35 lines submitted by Santa Fe Cablevision, which
are largely devoted to arguments considered and rejected by the Commission when
it adopted the Second Report. Yet the majority grants this waiver -- on
no showing at all.
It appears that our CATV Task Force is submitting recommendations for
disposing of requests for waiver of the distant signal rule -- which the
majority then endorses -- based on the theory that if a community is outside
the standard metropolitan statistical area of the television market's central
city and if the community, considered all by itself, does not constitute a
substantial percentage of the local stations' net weekly circulation, then
waiver is permissible without any specific showing of the things we enumerated
in paragraph 141 of the Second Report.
We were asked, by way of petitions for reconsideration of our CATV
rules, to substitute the census urbanized areas or some other smaller area for
the predicted grade A contour, but we denied this request just 2 weeks ago and
reiterated our belief that the grade A contour is "an appropriate
criterion for measuring the area within which the importation of distant
signals raises public-interest questions." See memorandum opinion and
order in dockets Nos. 14895 et al., released January 19, 1967, paragraphs 24
and 30. We recognized that there might be occasions where waiver of the
rule would be appropriate -- but presumably only on the usual basis of a
showing that the rule as applied to the facts of a particular situation produces
a result that is not in the public interest. To grant repeated waivers on
the ground that the community into which distant signals are to be imported is
outside the standard metropolitan statistical area (usually the home
[*842] county) of the market's central city, but without any showing that
unusual circumstances cause the rule to bear unjustly there is not, in my
judgment, responsible and orderly administration of rules which we adopted so
carefully last March and reaffirmed just days ago. Nor does it make any
sense to me to consider these cases piecemeal without studying the overall
impact of what we are doing. The things said with respect to Santa Fe can
be said of every other community outside Bernalillo County now served by the
Albuquerque stations -- in fact, the argument as to the significance of each
such community can be made more strongly, except in the case of Roswell,
because the others are smaller than Santa Fe. But the aggregation of the
viewers in all these little towns makes Albuquerque the 100th market and
supports four television stations to serve the area -- and just as surely, the
aggregation of CATV systems carrying Los Angeles signals in these communities
can so fragment these stations' audiences as to undercut the basis for continuation
of their present level of service and to discourage interest in the development
of further broadcast stations in the area. To ignore this seems to me to
court total breakdown of our rules.
There is another aspect of this matter which I believe requires
mention. This is not the typical case of bringing in signals from an
adjacent market, whose stations, however, do not provide grade B service to the
CATV community. Here the request is to bring in one signal from Phoenix,
375 miles away, and six more from Los Angeles, 700 miles away. And this
is just part of a series of applications by American Television Relay, Inc., to
transport the signals of four of the Los Angeles independent stations (KHJ-TV,
KTLA, KTTV, and KCOP) to Albuquerque, n3 Las Cruces,
Carlsbad, Roswell Artesia, Lovington, Hobbs, Farmington, and Gallup.
These nine communities contain almost half the population of New Mexico,
providing a major part of the audience for the State's television
stations. And beyond these plans, ATR has applications to carry these
same signals to Midland, Odessa, Brownsville, Edinburg, Pharr, Harlingen, San
Benito, Raymondville, Mercedes, and Weslaco, Tex.
n3 This request is the
one set for hearing here.
This represents a serious disruption of the Commission's
allocations. One of our basic responsibilities is to make a fair
allocation of broadcast facilities among the States and communities of the
United States, and in that connection we are authorized to establish areas or
zones to be served by stations. Communications Act, sections 307(b) and
303(h). In pursuance of this we have adopted a table of television
assignments involving 1,772 channels for a total of 802 communities. This
framework provides room for future growth, largely in the UHF portion of the
spectrum. The preservation of this possibility for all the people in the
areas concerned was one of the main reasons for our adopting the CATV rules.
Our allocations are based, in part, on the size of the various
communities for which provision is made. In many cases, the number of
channels assigned to different cities is a reflection of their relative needs
and, at the same time, of their ability to support stations. In more
sparsely populated parts of the country -- such as New Mexico -- [*843]
more generous assignments were made than in crowded areas. But all of
these are implemented only where and when audiences become large enough to
attract advertising support. This is why all nine of the commercial
channels allocated to Los Angeles are on the air, while only three of
Albuquerque's five channels have been implemented. The other two channels
remain available, and it is hoped that someday they will be used to serve the
people of the area -- all of them, not just those able to avail themselves of
cable service. But if the 6 Los Angeles independents, and 1 from Phoenix,
are brought into Santa Fe and other communities in the Albuquerque market and
added to the 3 local commercial and 1 local educational stations, then this
small market will have to divide its audience of 179,300 as many ways as the
Los Angeles stations divide their more than 2 million television homes.
This disregard of the normal areas of television service must have
serious consequences on the Commission's plan for our television system.
Many of our assignments will never be implemented if their potential audiences
are already divided up among imported distant signals. I do not see how
my colleagues can approve the first steps toward the spread of Los Angeles
signals to the Gulf of Mexico -- and presumably on into the Middle West.
To do so without comment or analysis is to stumble into developments which may
be irreversible.
I would, therefore, favor a hearing with respect to the importation of
distant signals into Santa Fe as well as Albuquerque.
[*839] STATEMENT OF COMMISSIONER ROBERT T. BARTLEY CONCURRING IN
PART AND DISSENTING IN PART
Assuming, arguendo, the validity of the CATV rules, I would, in the
circumstances of the matters here before us, grant full relief as requested by
the CATV's.
STATEMENT OF COMMISSIONER NICHOLAS JOHNSON CONCURRING IN PART AND
DISSENTING IN PART
ALBUQUERQUE-SANTA FE, N. MEX., CATV IMPORTATION OF DISTANT SIGNALS
I concur in the designation for hearing of the request to import distant
signals into Albuquerque, but dissent to waiver of the hearing requirement to
import distant signals into Santa Fe.
I was not a member of this Commission when the CATV rules were
formulated and aopted. I did not participate in their recent reconsideration.
In fact, I have not yet resolved the substantial doubt in my mind as to (1) the
basic wisdom of the purposes, procedures, and effect of those rules, and (2)
the more appropriate way to accommodate the new services CATV offers with
orderly regulation in the public interest. There are weighty policy
considerations both on the side of extensive, and minimal, Commission
involvement in the evolution of CATV service in this country. But this is
not the point.
The Commission has promulgated a series of CATV rules. Its duty
now is to administer them or alter them. This does not mean that the
rules cannot, in appropriate instances, be waived. What it does mean is
that waiver should not take the place of rule amendment, exempting from the
rules a whole class of cases which could best be covered by an exception in the
rule itself.
The rule waiver which the Commission here sanctions is a good example
of the waiver without reason to which I refer. Section 74.1107 of our
rules sets out a rather precise definition of the areas into which CATV systems
will not be allowed to import distant signals unless it is shown in a hearing
that the public interest will be served. [*844] The
Commission is here waiving the requirement of a hearing, seemingly because Santa
Fe, N. Mex., is on the fringe of the area which the rule defines quite
well. The definition of "fringe" is so imprecise as to destroy
the effectiveness of the area defined in our rule. If we proceed to waive
the hearing for all systems serving a "fringe," we will simply have
substituted an imprecise standard for a precise one.
Commissioner Cox, in his dissent, suggests that the Commission is
evolving a standard for waiver of the hearing requirement. A hearing,
Commissioner Cox hypothesizes, is to be required only when the CATV system
would operate within the standard metropolitan statistical area of the
television market rather than when it would operate in the usually larger area
specified by our rules. I have heard no one advocate this new standard
for the holding of a hearing. But if Commissioner Cox is correct as to
what he thinks the Commission is doing, then I think he is also correct that
this is unfortunate. At first blush a rule based on the predicted reach
of television signals, such as the present rule, seems to make more sense than
one based on arbitrary decisions of the Bureau of the Budget. n4 But if the standard is to be different from that stated in our rules,
let an amendment be proposed, so that we can obtain the opinion of interested
parties.
n4 For an explanation
of the meaning of the phrase "standard metropolitan statistical area"
see Bureau of the Budget, "Standard Metropolitan Statistical Areas"
(1964).
The other reasons which the Commission offers for waiver in this instance,
besides the fact that Santa Fe is on the "fringe" of the Albuquerque
market, seem to me clearly inadequate. It is said that Santa Fe is in a
sparsely populated county. But the Albuquerque market contains many such
sparsely populated areas. To allow CATV systems to import distant signals
into each of these areas without a hearing would seriously undermine the entire
scheme of the rules. It is also said that there is minimal interest in
the stations allocated to Santa Fe itself. This statement is undoubtedly
based on the fact that no one has applied for the channels. But a hearing
might well produce more solid evidence on potential interest. Surely the
CATV will greatly dampen any interest which may exist. But really this,
too, is besides the point. There are stations in Albuquerque which serve
Santa Fe, and these surely will be harmed by the importation authorized
here. All the reasons which counsel a hearing before the Albuquerque
system can import signals extend equally to that in Santa Fe once the decision
in our rules is accepted to include Santa Fe in the Albuquerque market.