In re Petitions by AMERICAN TELEVISION RELAY, INC., ALBUQUERQUE, N. MEX.; SANTA FE CABLEVISION CO., SANTA FE, N. MEX. For Authority Pursuant to Section 74.1107 To Serve and Operate CATV Systems in the Albuquerque Television Market, Ranked 100
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.
[*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.
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.