# Appendix — National Football League v. Federal Communications Commission > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385008_0361%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1982 - **Citation:** 454 U.S. 1143 ## Text CLERK | ALEXANDER L STEVAs. Supreme Court of the United States OCTOBER TERM, 1981 NATIONAL ASSOCIATION OF BROADCASTERS, ef al., Petition ers, V. FEDERAL COMMUNICATONS COMMISSION, UNITED STATES OF AMERICA, et al., Respondents. PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT SUPPLEMENTAL APPENDIX Erwin G. KRASNOW RAUL R. RODRIGUEZ National Association of Broadcasters 1771 N St., N. W. Washington, D.C. 20036 (202) 293-3560 Attorneys for Petitioner National Association of Broadcasters MICHAEL S. HORNE DONNA M. MURASKY COVINGTON & BURLING 1201 Pennsylvania Avenue, N.W. Washington, D.C. 20044 (202) 662-6000 Attorneys for Petitioners Hubbard Broadcasting, Inc., Midwest Television, Inc. Post-Newsweek Stations, Inc., and John Blair & Company SAMUEL MILLER MILLER AND FIELDS 1901 Pennsylvania Avenue, N.W. Washington, D.C. 20006 (202) 785-2700 Attorney for Petitioner Matrite J. V. of New York, Inc. ARTHUR B. GOODKIND KOTEEN & BuRT 1150 Connecticut Avenue, N.W. Washington, D.C. 20036 (202) 467-5700 Attorney for Petitioner McGraw-Hill Broadcasting Company, Inc. JAMES A. MCKENNA, JR. Rosert W. Coil STEVEN A. LERMAN DENNIS P. CORBETT MCKENNA, WILKINSON & KITTNER 1150 Seventeenth Street, N.W. Washington, D.C. 20036 (202) 861-2600 Attorneys for Petitioner American Broadcasting Companies, Inc. GEORGE VRADENBURG III Harry R. OLSSON, JR. CB3 INc. West 52 Street Yew York, New York 10019 (212) 975-4321 Attorneys for Petitioner CBS Inc. JEROME J. SHESTACK R. CLARK WADLOW SCHNADER, HARRISON, SEGAL & Lewis 1111 Nineteenth Street, N.W. Washington, D.C. 20006 (202) 463-2900 Attorneys for Petitioner National Broadcasting Company, Inc. J. LAURENT SCHARFF Mark J. TAUBER Jack N. GOODMAN PIERSON, BALL & Dowp 1200 Eighteenth Street, N.W. Washington, D.C. 20036 (202) 331-8566 Attorneys for Petitioner Association of independent Television Stations, Inc. Lee M. MITCHELL Tom W. DAVIDSON SIDLEY & AUSTIN 1730 Pennsylvania Avenue, N.W. Washington, D.C. 20006 (202) 624-9000 Attorneys for Petitioner Field Communications Corporation THOMAS J. DOUGHERTY PRESTON R. PADDEN METROMEDIA, INC. 5151 Wisconsin Avenue, N.W. Washington, D.C. 20016 (202) 244-5151 Attorneys for Petitioner Metromedia, Inc. Davio H. Ltoyp ROBERT ALAN GARRETT ARNOLD & PORTER 1200 New Hampshire Avenuc, N.W. Washington, D.C. 20036 (202) 872-3600 Attorneys for Petitioner Commissioner of Baseball PHILIP HOCHBERG Vorys, SATER, SEYMOUR AND PEASE 1828 L Street, N.W. Suite 1111 Washington, D.C. 20036 (202) 822-8200 Attorney for Petitioners National Basketball Association and National Hockey League VOL. 79 (2d Series) September 26, 1980 No. 6 FEDERAL COMMUNICATIONS COMMISSION REPORTS (79 F.C.C. 2d) Decisions, Reports, Public Notices, and Other Documents of the Federal Communications Commission of the United States VOLUME 79 (2d Series) Pages 652 to 960 Reported by the Commission FEDERAL COMMUNICATIONS COMMISSION Charlies DO. Ferris, Chairman Robert E. Lee Joseph R. Fogarty James H. Quel Tyrone Brown Abbott Washburn Anne P. Jones UNITED STATES GOVERNMENT PRINTING OFFICE e WASHINGTON, D.C. For sale by the Superintendent of Documents, U.S. Government Printing Office Washington, D.C. 20402 - on a subscription basis Notice: The contents of this pamphlet are subject to correction by means of an errata appearing in the bound volumes of the F.C.C. Reports. Users are requested to notify the F.C.C. Publications Branch of errors so that an errata can be inserted in the bound volume. minute programs to federal candidate found reasonable, August 20, 1980, mimeo No. No. 35087 (Delegated A — te 112 Educational B/ eing Corporation; re renewal of educational TV station conditionally granted, BC 78-181 OO en HN and reconsideration of revised processing guidelines denied, RM-3635, (FCC 80-389) ..... Grayson Enterprises, Inc., et al.; re i for ‚—ͤ—k-Ni V n P — — EERE 3303—õ —* ũ2—*ẽ * 901 Subject Digest nacceptable Commission denies application to increase power and antenna height f — — operation exceeds a hed implementation of il a 1 4 i improving the. prime time — 1 r 1 the number of i eae ate d eee was wnat in Commission staff, through delegated authority, finds no violation by broadcaster for refusal to sell specific class of time to non-federal candidate 45-day before primary. Broadcaster’s actions were in e Act.-Hernstadt, William H., Senator ee cable television distant and syndicated exclusivity rules. Criteria evaluated before elim these rules were consumer welfare, distributional equity, and external effects. to cable retransmission consent is beyond — aden authority.-CA 7 V Syndicated Program Exclus. Rules 20988 CATV Distant Si Rules ( . relationship Commission granted liberal time period for initial comments, twice extended time to sub nit comments and reply comments, accepted and considered a late-filed :tudy and several other untimely filed comments to insure full and adequate participation. CATV Syndicated Exclus. Rules 20988. CA (See: TV Carriage Economic lope CAT Syndicated Program (See: CATV Carriage-CA TV Syndicated Program Exclus. Rules) Common Carrier, Data Processing Service Motions for Partial of Second Computer Inquiry Decision (77 FCC 2d 384) granted in l of decision which found enhanced services not subject to Il and motion to defer effective date of that period of decision regulation, e denied. -Second Computer Inquiry 20828 Application for construction permit to FM Station transmitter — 72 — 11 Commission finds this will neither increase interference to FM station nor change class status of permittee.-Santa Monica B/cing, Inc. Educational Noncommercial TV Station, License Renewal of educational TV station conditionally granted. Licensee must establish a full studio in station's dir of Henan, — public file at station’s f ties, and utilize local recruitment sources.-Educational B/eing oration Employment, Minority, Level Of By Licensee (EEO) Petitions for rule and reconsideration of revised equal employment (EEO) guidelines — states that are not in nature and do not 2 ing devices determining which employment trends-EEO Processing Guidelines . oo — 9 Unacceptable-Cincinnati University Board Of (See: —— Economic Impact-CATV Syndicated Program ee eng, assignment applications because s procedures were unclear as to whether li could sell — 1 stations while in hearing on character issues. Commission new procedure which enables them to decide before the whether or not multiple owner can sell non-involved stations while one station is in hearing-Grayson Enterprises, Inc. ae Application, Unacceptable-Cincinnati University Board of Trustees) Interference, FM Station (See: Construction Permit Modification Of-Santa Monica B/cing, Inc.) License, Assignment Of, Volun (See: — 2 —— fh’ Om ee Ca CATY, Carriage, Boonomic Impact-CATY Sud Program 22 11 Petition To Deny (See: Construction Permit Modification Of-Santa Monica B/cing, Inc.) Political Broadcast, Program Time, Period (See: Authority Delegated, Action On-Ed Noble U.S. Senate Committee) Political Candidate, Federal Candidate, Reasonable Access (See: Authority Delegated, Action On-Ed Noble U.S. Senate Committee) Political Candidate, Purchase Of Time (See: Authority Delegated, Action On-Hernstadt, William H., Senator) Political Candidate, State Or Local Office (See: Authority Delegated, Action On-Hernstadt, William H., Senator) Petition, Denial Of Petitions for rule making and reconsideration of revised equal rong een mae pee eng amr, Eno my sparen =P ogee revised guidelines are not substantive in nature and do not — 4 — — —— «ve Ae a receive staff review for EEO compliance, and are reflective of industry employment Trends.-EEO Processing Guidelines Review By Commission (See: Hearing, Procedure-Grayson Enterprises, Inc.) Renewal, Granted Conditionally (See: Educational Noncommercial TV Station, License-Educational B/cing Corporation) Ret tat (See: CATV Carriage-CA TV Syndicated Program Exclus. Rules) Rules, Amendment Of (See: CATV Carriage-CATV Syndicated Program Exclus. Rules) Rule Making, Petition For Denied (See: Employment, Minority, Acceptable Level Of By Licensee (EEO) EEO Processing Guidelines) Tariff, Regulation Of (See: Common Carrier, Data Processing Service-Second Computer Inquiry) Television Station (See: CATV Carriage, Economic Impact-CATV Syndicated Program Exclus. Rules) CATV Carriage, Economic Impact CATV Program Exclusivity, Syndicated Programming Hearing Oral Argument Television Station Requests for evidentiary hearing and oral arguments in economic relationship between television broadcasting and cable television denied. Commission granted liberal time period for initial comments, twice extended time to submit comments and reply comments, accepted and considered a late-filed study and several other untimely filed comments to insure full and adequate In the Matter of Cable Television Syndicated Program | Docket 20988 Exclusivity Rules RM-2721 In the Matter of Inquiry Into the Economic Relationship | Docket 21284 Between Television Broadcasting and Cable | RM-2919 MemMoRANDUM OPInion AND Ones (Adopted: July 22, 1980; Released: September 9, 1980) By tHe Commission: Commissioners Lee, QueLto anp WasHBuRN DISSENTING. 1. On July 12, 1979, the Commission denied a “Joint Motion for Revision of Procedures” filed by the Association of I 79 PCC. ad CATV Syndicated Program Exclus. Rules 653 proceeding for hearing before an Administrative Law Judge who would take evidence and certify the record to the Commission.' Since the ity for submission of initial comments had yet to expire, the ission expressed its opinion that the better course of action would be to withhold a determination on this request until ccmments been filed. Accordingly, the Commission’s denial of the quest made without prejudice to the parties’ renewing their request at a later date. On September 17, 1979, the Motion Picture Association of America, in formal comments filed in this proceeding, reiterated a request for evidentiary hearing.2 On November 7, 1979 the National Association of Broadcasters (NAB) filed a “Request for Oral Argu- ment” in this proceeding. Evidentiory Hearing 2. We are able to approach the question of the utility of cross- examination procedures in informal rulemaking matters, such as the proceeding herein, with the assistance of considerable, sometimes divergent, discussion of this subject by both courts and commentators. Indeed, commentary on the sufficiency and adequacy of notice and comment procedures as provided for by the Administrative Procedure Act in informal rulemaking proceedings as well as on the value of extra-procedural tools in these kinds of proceedings has been quite extensive. Some commentators suggest that the reasoning of some of those court decisions’ recommending extra-procedural devices in certain circumstances has some “intuitive appea!,” but believe that such an approach could lead toward “over-proceduralization” and overkill of the very purpose for which administrative agencies were created. Se, e. g., Wright, “Court of Appeals Review of Federal Regulatory Agency Rulemaking,” 26 Admin. L. Rev. 199 (1974). Others suggest that the benefits of cross-examination, when actually ana- lyzed, are in reality very limited and that a far more important consideration which agencies should concern themselves with is the “1 The joint motion had recommended as well that the Commission suspend the submission of comments and reply comments and set dates for findings and comments upon conclusion of the proposed evidentiary hearing. 2 Only the Motion Picture Association of America and the National Association of Broadcasters renewed the request. The Caucus for Producers, Writers, and Directors, the National UHF Broadcasting Association and Screen Actors Guild not only did not renew their request but filed no comments at all. Other parties in their comments have expressed support for the initial request. 3 See, ¢g., International Harvester Co. v. Ruckelshaus, 478 F. 2d 615, 629-681 (D.C. Cir. — — — 4 — — of cross-examination techniques in rulemaking proceedings, where the court indicated “that a right of crous-examination, consistent with time limitations, might well extend to particular cases of need” but in this case held “that the absence of a general right of cross-examination” was not “a departure from ‘basic considerations of fairness.’ See also Appalachian Power Co. v. EPA, N F. 2d 496 (4th Cir. 1973); Walter Holm & Co. v. Hardin, 449 F. 2d 1009 (1971); O'Donnell v. Shaffer, 491 F. 2d 59 (D.C. Cir. 1974). FCC. vital principle of “assuring challengers timely access to the critical —— 1 — See, e. g., Williams, “ Hybrid under the Administrative Procedure Act, A Legal and Empirical Analysis, 42 C. Chi. L. Rev. 401 (1975). Professor Davis, who is a leading commentator in the administrative law area, welcomes the trend favoring the use of new devices for providing procedural r the subject of specific use of eross- examination, appears to concede that experience with this procedural device has proved less than satisfactory. See, Davis, 1 Administrative Law Treatise §6.39 (2d Ed. 1978). Instead of the different approaches expounded by the courts on the matter in which agencies should handle “identified issues of specific fact,” Professor Davis would prefer that of Recommendation 72-5 of the Administrative Conference of the United States which favors “trial-type hearings in rulemaking ‘on issues of specific fact’ ” and suggests “that ‘Congress should never require trial-type proce- dures for resolving questions of policy or of broad or general fact.’ Id. at §6.20. What underlies this current thought on the subject by both courts and commentators is not, however, that particular procedural devices should be mandated but rather that the administrative process utilized, when considered as a whole, assures that agency decisions are reached in a manner consistent with notions of fairness and adequate public participation and that they are supported by sufficient data and sufficiently comprehensible projections and policy judgments. See Wright, supra, at 200.4 3. Very recently, the Supreme Court had occasion to consider the adeyuacy of the procedures prescribed by the Administrative Proce- dure Act in rulemaking matters in Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., 435 U.S. 519 (1978). Therein, the Court said “that generally speaking this section (5 U.S.C. 553] of the Act established the maximum procedural requirements which Congress was willing to have the courts impose upon agencies in ee rulemaking procedures.” Jd. at 524. (footnote omitted). The multitudinous 279, 290 (1965), quoting from Federal Communications Commission v. Pottaville Broadcasting Co., 309 U.S. 134, 143, (1940). Id. at 543. The basic principle to be distilled from this case is that as long as the administrative agency employs at least the statutory minima, reviewing courts should refrain from “engrafting their own For additional commentary on the subject, see Verkuil, “Judicial Review of Informal ” 60 Va.L.Rev. 185 (1974); Hamilton, “Procedures for the Adoption of Rules of General Applicability: The Need for Procedural Innovation in Administra- tive Rulemaking,” 60 Calif.L.Rev. 1276 (1972). CATV Syndicated Program Exclus. Rules 655 notions of proper procedures upon agencies entrusted with substantive functions by Congress. Id. at 525. 4. We believe that this decision is especially relevant to the present petition under consideration here to the extent that this petition strongly suggests that the Commission is obligated to have as a minimum a limited evidentiary hearing in this rulemaking proceeding. The Vermont Yankee case specifically addressed a lower court decision which had determined the intervenors’ primary argument to be whether “the decision to preciude ‘discovery or cross-examination’ denied them a meaningful opportunity to participate in the proceed- ings as guaranteed by due process” and which considered the issue for decision to be “whether the procedures provided by the agency were sufficient to ventilate the issues. Even though the lower court admitted that, absent extraordinary circumstances, reviewing courts should not prescribe the procedural format which an agency should use to explore a given set of issues and even though the court appeared to ize that the agency had employed all the procedures required under Section 553 of the Administrative Procedures Act, the clear import of its decision was to require the agency to undertake additional procedures beyond those called for under the Act.“ The Vermont Yankee case, in overruling the lower court decision, would seem to indicate quite clearly that administrative agencies have wide discretion in determining whether procedural devices in addition to those required under Section 553 of the Administrative Procedure Act are necessary and that the necessity in undertaking the fashioning of additional procedural safeguards in rulemaking matters is, if such circumstances exist, extremely rare. 5. We believe that this summary of the relevant law places in —— our responsibility under the Administrative Procedure Act and applicable case law thereunder with respect to the present request. “8 The Court did indicate, however, that there may be circumstances which might justify overturning agency action on the basis that the agency failed to employ adequate procedures b ut stated that “such circumstar.ces, if they exist, are extremely rare.” Id. at 524. The Court did state that “[a]gencies are free to grant additional procedural rights in the exercise of their discretion,” Id. at 524, but seemed to caution that “a totally unjustified departure from well settled agency procedures of long standing might require judicial correction.” Id at 542. (footnote omitted). * Natural Resources Defense Council, Inc. v. United States Nuclear Regulatory Commission, 547 F. 2d 683, (D.C. Cir. 1976). 7 Eg., the court stated: review is to be meaningful, it must focus on the actual operation of the whole range of procedures in a particular —including ‘context of fact, statutory frame- work and nature of action. Id. at 644-645. (footnotes omitted). CC. ad 656 Federal Communications Commission Reports We come therefore to the question of whether the requested evidenti- ary hearing would be appropriate, or is necessary, in the context of this specific rulemaking proceeding. Among the major arguments pressed upon us in support of this petition is that the use of this procedure is necessary to assure that a full opportunity is afforded intereste This question reveals a lack of understanding of our non-duplication rules. Ardmore-Ada is a hyphen- ated market. The cable system in Bryan, Oklahoma is further than 55 miles from station KTEN, Ada, but is within the 55 mile zone of protection of KXII, Ardmore. Thus KXII is entitled to protection and KTEN is not. 125. MPAA also states that if we were asked to single out one case to illustrate the inaccuracy, unreasonableness, and prejudicial nature of the Park Study, we would rest our case on county #30 [Jackson, Alabama]. (Emphasis in original.) We believe this statement demonstrates the lack of understanding with which MPAA has attacked the Park study. Therefore, we believe it useful to provide some extended discussion of the data for Jackson County. Park’s designation of stations being either local or distant in his original study in this proceeding was determined by Area of Dominant Influence or ADI. Stations assigned by the Arbitron audience rating service to an ADI were considered local in all areas of that ADI. However, to avoid including counties near the fringes of an ADI, Park excluded counties from his sample in which the local stations received less than 70 percent of the non-cable viewing. Although MPAA did not provide an alternative method for defining local signals, and in its major study of audience diversion in this proceeding it employed a definition of local signals which is very similar to Park's, e MPAA found Park’s definition to be unacceptable. Presumably, MPAA would prefer Park to have restricted the local area of a station to those areas which are even closer to the community of license. Interestingly, Park’s revision of his definition of a local signal to account for non-duplication protection did have this effect in some cases. One such case is county #30 (Jackson, Alabama). Originally, Park considered the stations operating in Chattanooga, Tennessee to be local in Jackson County, Alabama because of the county’s assignment to the Chattanooga ADI. 143 Additional comments of the Association of Independent Television Stations, Inc., filed in Dockets 20900 and 21284, January 10, 1980 at 4. 1# Further comments of Motion Picture Association of America, Inc., filed in Dockets 20988 and 21284, January 10, 1980 at 9. 145 Id. at 9. 146 See 47 C.F.R., Part 76, Subpart F. Appendix C to the First Report and Order in Docket 19995, 52 FCC 2d 519 (1957) contains an explanation of the rules in this type of situation in diagram form. 147 Jd. at 10. 148 See note 123 supra. FCC. 2 716 Federal Communications Commission Reports However, since the cable system in Jackson County is within the 35 mile zone of the station in Huntsville, Alabama and these stations receive non-duplication protection against the Chattanooga stations, Park has reclassified the Huntsville stations as the local signals for this county. But, as it turns out, cable television increases substantially the audience of the Huntsville stations in Jackson County. Therefore, for this case, MPAA argues explicitly that the stations further away from Jackson County should be designated the local stations for this county. While it demonstrates the difficulty of finding perfect definitions of local and distant signals, we find MPAA’s conclusion with respect to the definitions used to be not only unreasonable, but inconsistent with their previous criticisms of the Park study. 1% In summary, we reject the commenting parties’ criticisms of both Park’s definition of local signals and his procedure for dealing with non-duplication protection. 126. Additionally, in its comments on the Park revision, INTV argues that the revisions altered the results significantly.'5° This argument also is without merit. Park summarizes his revision by saying “although the new estimates differ from the earlier ones in a number of ways, the resulting audien e diversion projections are changed very little.”'5' The appropriate comparisons are Tables 7 and 8 in the original report and Tables 3 and 4 in the revision, respectively. The difference is no greater than three percentage points for any of the simulations. d. Total Audience Model. 127. The Park study estimates a total audience model and an audience share model to generate audience diversion projections. The total audience model is formulated to test the hypothesis that the increased viewing in cable versus non-cable homes is attributable to the tendency of heavier viewers to subscribe to cable television (i.., the self-selection hypothesis). If the hypothesis is true, the greater amount of viewing observed in cable versus non-cable homes is not attributable to cable television, and therefore cable has the potential to divert more audience from local stations. After testing this hypothesis, however, Park concludes that he has “not succeeded in settling the question of whether or not cable should get the credit for higher viewing in cable homes.“ 5 Faced with this limitation, Park proceeds to provide a range of estimates of audience diversion from cable e Previously, for example, MPAA argued in the Joint Motion (supra, at n. 92) that Park disregarded the distance between the local stations and the cable systems in the sample. It was noted that the Grade B contour of KXON is at least 100 miles short of Brown County (which Park considered local to KXON). 18 Supra, at n. 143, at 6-7. 151 Park, Appendix A, Report in Docket 21284 at 3. 152 Park, Appendix A, Report in Docket 21284 at 23. 79 FCC. 2d CATV Syndicated Program Exclus. Rules 717 television by making the alternative assumptions that cable gets all of and none of the credit for the higher viewing in cable homes. 183 However, Park finds that “the question of which assumption is correct (or where, in between, the truth lies), although interesting, turns out not to be too important” because “the range of values calculated by using the extreme assumptions is quite narrow, usually only two or three percentage points wide.“ 1. 128. Upon reviewing the Park study, Dr. Fisher finds Park's total audience equations to be very unreliable. 15 Fisher also finds that “the obviously unsatisfactory audience equation can make a substan- tial difference [in projections of audience diversion]. 188 As it turns out, however, the example that Fisher uses in attempting to demon- strate this substantial difference is arithmetically in error. Thus, we find Fisher’s criticism to be without merit. 129. To summarize our position on this question, we continue to believe that “we can do no better than provide upper and lower bounds on the magnitude of audience diversion which has resulted from the presence of cable.“ 1 Hence, we rely upon both share and rating data (in a procedure identical to Park’s) to reach our conclusions. For example, in our grandfathered market analysis, we found that the broadcast stations in the San Diego television market lose approxi- mately 1 to 4 percent of their potential audience because of cable television. 18 That is, they lose one percent if the greater amount of — in cable homes is attributable to cable television; four percent, if not. e. Signal Reception. 130. New data on the television viewing of cable and non-cable households are available for individual counties. These data provide a substantial improvement over previously available marketwide view- ing data because signal reception differences between households within each unit of observation (i. e., the county as opposed to the entire market) are reduced significantly. Even so, Dr. Fisher argues that “some stations cannot be seen in all of the county from which the data come” which “will directly affect the audience diversion estimates. 1 Fisher contends that “the results can be substantially affected.“ 10 We believe Park’s decision onthe point to be entirely reasonable. For our 183 This procedure also was employed in our detailed case study analysis in the Report in Docket 21284. 154 Supra, n. 124, at 23. 155 Supra, n. 92, at 2. 186 Jd. at 11. 15? See Park, supra, n. 124, at 28. 138 Report in Docket 21284 at n. 136. 1% See the Report in Docket 21284 at Table 2-3 of Section IV. % Supra, at n. 92, at 15, 17. 161 Supra, at n. 92, at 19. 79 FCC. 2d 718 Federal Communications Commission Reports purposes, however, it is sufficient to note that while the Park and NAB studies choose different methods for dealing with reception differences across counties, they come out with similar results, suggesting that adjusting for receivability does not affect the results substantially. This conclusion is given further support by comparison of the results of the previous studies that employed marketwide viewing data, the current studies that employ county wide viewing data without adjusting for 1 quality, and — study by Video Probe Index ie which restriets the areas from which viewing data are drawn to particular communities. Clearly, the reception quality of the signals viewed off - the- air differs significantly between the households com- prising each unit of observation (i.e., market, county, community) in these studies. Yet, here again, the fact that the results of these studies are broadly consistent leads us to conclude that adjusting for receivability in a study of audience behavior is not very important to the “bottom line” estimates. Hence, we find Fisher's criticism to be overstated and, as a result, we do not believe it is necessary for Park to account for receivability in his study. 131. INTV attempts to take the signal reception argument one step further by contending that “any proper measurement of audience impact due to importation of distant signals must assume equality of reception in cable and non-cable homes in order to eliminate improve- ment in reception as a variable.“ 6 We believe this contention is unreasonable. An important effect that cable television has on local stations is an improvement in their signal reception and an expansion in their coverage area. For example, in our analysis of independent stations that operate in markets with high cable penetration, s“ we found that the UHF independent stations analyzed receive audience gains from cable television within their own ADI, despite the carriage of at least 5 distant signals. Therefore, to eliminate improvement in reception is to eliminate an important effect of cable television on local station audiences from the analysis. Hence, we reject INTV’s conten- tion. f. The Sample. 132. The sample for Park’s study of audience behavior between cable and non-cable households was selected by the Commission staff. The primary criterion in selecting the sample was that each unit of observation (i.e., each county) have consistent viewing options on cable. In this manner, the relationship between the availability of distant signals and viewer behavior could be monitored carefully. To insure this consistency of viewing options on cable, the Commission staff 162 See National Cable Television Association, Comments in Docket 21284, March 15, 1978, Exhibit D. 163 Supra, n. 113, at 18. 14 Report in Docket 21284, Section IV. FCC. 2d CATV Syndicated Program Exclus. Rules 719 limited the sample to ali those counties that contain only one cable system. Additionally, it was required that viewing data be available for both cable and non-cable households in each county. Finally, the sample was restricted further by excluding those cable systems (i.e., counties) that provide syndicated exclusivity protection to local broadcast stations. 16 Upon receiving a sample of 166 counties from the Commission, Park excluded an additional forty-five counties located near the fringe of their markets. Local stations were required to attract at least 70 percent (and actually received on average 92 percent of the total off-the-air audience in the sample counties. 133. Several parties have questioned the adequacy and representa- tiveness of the Park sample. For example, Fisher concludes that “the gain in ‘cleanliness’ [from restricting the sample to counties with only a single cable system] does not seem worth the sacrifice of large amounts of information and of the representativeness of the sample of counties. % We do not believe that the choice between selecting a sample for its cleanliness or its representativeness was an unreason- able one. In reviewing the signal carriage of cable systems for our case study analysis in the Report in Docket 21284, we found frequent and significant differences in the signal carriage of cable systems located within the same county. Therefore, one also may argue that the other audience studies in this proceeding suffer because of a lack in cleanliness in their samples. Indeed, if Park had chosen to expand his sample at the cost of cleanliness, the commenting parties just as easily could have criticized his judgment. It is apparent to us that there is no perfect solution to the problem. This is typical of all econometric work. Of primary importance, however, is the fact that studies employing different selection criteria for their samples come out with generally consistent results. This provides us reason to believe that the selection criteria for choosing a sample (if not purposely biased) will not influence significantly the magnitude or direction of the estimates. From our perspective of viewing all of the studies on audience diversion in the record, the cleanliness of the data for the Park study is worth its costs. 134. The Park sample also has been criticized for not having enough local independents. Park does not deny this criticism, nor the criticism that his estimation procedure will fail to properly estimate diversion from local independents. He states that “the question of 165 While this degree of control was not interjected explicitly into the other studies of audience diversion in this proceeding, all of the studies are roughly indicative of a marketplace functioning without syndicated exclusivity protection. (See the Report in Docket 20988 at para. 56.) Thus, to the extent that distant signals do not affect adversely the television service provided by local broadcast stations, this implies that the syndicated exclusivity rules are not necessary to stem any adverse consequences to consumers emanating from additional competition to local broad- cast stations. 166 Supra, n. 92, at 19. 7 FCC. 720 Federal Communications Commission Reports whether or not independents lose a larger share of their audience than do affiliates is probably unanswerable by statistical methods until we have accumulated more experience with cable systems carrying distant i into large markets. % As it turns out then, both the NAB- WEFA and Park models suffer from data limitations and methodologi- cal problems in assessing the incremental effect of additional distant independent signals on local independent station audienees. Hence, our summary of the results of these studies for markets containing independent stations is restricted to the provision of only one estimate of impact for the entire market. Additionally, it should be noted that for policy purposes, we can rely more confidently on the results of our case study analysis, which reflects actual marketplace experience, in assessing the effect of cable television on independent stations than on the NAB-WEFA and Park studies. 135. Finally, in its response to the Park revision, MPAA alleges that numerous problems exist with the data for the Park study. For example, MPAA states that “in our opinion, the Park study—as initially presented and as modified—is a classic example of the failure to recognize that the conclusions arrived at from an analysis of insignificant, unreliable data are also insignificant and unreliable. The underlying problem, we believe, is the very small number of valid diaries in the Arbitron samples for the vast majority of the counties used by Park for this analysis. 1 We believe this statement reveals a lack of appreciation and understanding of statistical analysis. At first blush, we note that the number of diaries in Park’s sample exceeds substantially the number of diaries that A. C. Nielsen collects for its weekly survey of total nationwide viewing patterns. Thus, without elaborate explanation, it should be obvious that “smallness” of sample size for statistical estimation does not imply inadequacy of sample size. 16 MPAA also argues that the size of the sample can affect Park’s findings. However, here again, MPAA fails to consider a basic tenet of statistical analysis. That is, there always is some variation introduced 167 Supra, n. 124, at 38. — 168 Further comments of Motion Picture Association of America, January 10, 1980, Attachment at 1. 16° MPAA notes that Park's sample includes 79 counties for which there are less than 50 in-tab diaries. In an attempt to discredit the Park study, it compares Park's sample composition which is based on Arbitron's sampling procedures for county- wide viewing to the procedure employed by A. C. Nielsen for its marketwide viewing surveys. It should be noted that these Nielsen surveys are not equivalent to the Nielsen nationwide survey mentioned above. The appropriate sampling procedure for a survey will differ depending upon the population that one is trying to estimate. Indeed, MPAA's comparison of Nielsen's procedure for estimating marketwide viewing to Arbitron's procedure for estimating countywide viewing is invalid. For example, Nielsen does not report audience data for any market if the number of in-tab diaries is below 50 because such a response signifies that a small proportion of the households in the survey have responded. However, this is not necessarily, nor even likely to be, the case if less tan 50 diaries are returned for a county. FCC. 2d CATV Syndicated Program Exclus. Rules 721 by taking a sample of an entire population. But sample size affects enly the statistical significance of the estimates, and not the expected value of the estimates. 7 Indeed, we note that despite the alleged scarcity of in- tab diaries, Park’s estimate coefficients are estimated quite precisely in a statistical sense. Finally, we note that for sample size to affect Park’s results significantly, there must be a systematic bias in measurement by Arbitron at varying sample sizes. We are not aware of any such bias. 136. MPAA also questions the accuracy of the data provided by Arbitron. For example, MPAA contends that the “inconsistencies between ‘shares’ and ‘Net Weekly Circulation’ data are so substantial and so numerous, we believe that all NWC figures should be eliminated from the econometric manipulation which are basic to the Park study.“ 71 We note, however, that Park does net employ NWC data for any of his estimates. Furthermore, given the intensive scrutiny that the data used by Park has received, we believe that the cleanliness of this data far exceeds that of most econometric analyses. Therefore, we find frivolous MPAA’s “conviction that the Park study is science fiction.“ 7: We note, once again, that we believe our “consensus effect” is a sound conclusion derived from all of the available evidence and from the careful analysis and interpretation of that evidence. 137. Additional Miscellaneous Comments. A number of additional comments relating in part to the econometric studies and in part more generally to our Economic Inquiry Report were also received. For example, ABC criticizes us and the Park study for “assum[ing] the same availability of program product in the future, despite evidence that the siphoning of major sports and other highly attractive program product from television broadcasting to CATV is highly realistic and would greatly affect projected audience diversion and resultant revenue losses.”'73 We are not aware of any persuasive “evidence” of this shift in program product taking place. And it should be noted that even if this phenomenon were to occur, it is unlikely that Park’s audience diversion estimates would be affected substantially, for if it were to occur, it would not affect materially the relative attractiveness of local broadcast stations vis-a-vis distant broadcasting stations because all broadcast stations presumably would be subject to the same programming shifts. The relative attractiveness of distant versus local stations is the relevant focus of the Park study. In addition, since no evidence has been presented to us which suggests that siphoning will 178 See, g., Mood, Graybill and Boes, /ntroduction to the Theory of Statistics (1974). * Supra, n. 168, Attachment at 6. 172 Id. at 5. 173 Supra, n. 89, at 22. 79 FCC. 2d 722 Federal Communications Commission Reports occur, we do not believe it is appropriate for us to factor any alleged adverse effect of siphoning into our analysis of station profitability.'"* Others suggest that loosening of restrictions on broadcast signal carriage will result in decreased carriage of nonbroadcast program- ming and an overall decrease in diversity of program content. We find no evidence to support this view. 138. In our Notice of Proposed Rulemaking in Dockets 21284 and 20988, we addressed a petition from the National Association of Broadcasters requesting the Commission to commence rulemaking leading toward the adoption of rules designed to insure that local television broadcast service is not harmed by the development of superstations. We denied that petition because of the lack of any evidence that a regulatory problem exists or is being fomented. Nevertheless, INTV, in its latest comments in this proceeding, claims that “satellite distribution of signals has created unforeseen inequities that mandate retention of the rules.“ 7 INTV claims that “indepen- dent stations, and particularly UHF independents, are disproportion- ately sensitive to audience loss, * INTV also maintains that “satellite carriage often impacts to the superstation’s detriment as well.“ 77 However, as in NAB’s petition, the facts supporting these arguments are either missing or incorrect. For example, one of the most significant findings of the Report in Docket 21284 was that UHF independents frequently are helped by cable in their local markets, even in instances where many distant signals are carried by cable. Thus if satellite carriage increases the demand for cable television it may help UHF stations. Additionally, our conclusion for audience diversion due to cable applies to the importation of television signals currently distributed by satellite as well as by other means. It is the number and type of distant signals that affect local station audiences and not the means by which they are imported. Furthermore, in the Report in Docket 20988, we concluded that it is likely that superstations will receive some measure of compensation for the audiences they attract in distant communities. Thus, satellite carriage may be beneficial, rather than detrimental, to superstations. Nevertheless, it is the public interest that is paramount here, and not financial well-being of any one particular kind of station. ““ Here again, no facts have been 114 See Home Bor Office, Inc. v. FCC, supra, at 42. 175 Supra, n. 113, at 54. 176 Jd. at 54-55. 177 Id. at 56. 178 We are aware, for example, that INTV requests the retention of the rule because of “unforeseen inequities.” More specifically, competition from cable is said to be more keen for independent stations than for network affiliates. However, we are aware of no statutory mandate that requires us to consider the equities involved in shifting profits among firms. In fact, the U.S. Court of Appeals, District of Columbia Circuit in Carroll Broadcasting Co. v. FCC, 258 F. 2d 440 (D.C. Cir. 1958) concludes that “the question whether a station makes $5,000, or $10,000 or $50,000 is a matter in which the public has no interest so long as service is not adversely 79 FCC. 2d CATV Syndicated Program Exclus. Rules 72 presented which suggest the public will be disserved by the satellite carriage of programming. 139. NAB criticizes the Commission for “its failure to consider numerous and related factors which may compound the adverse impact on broadcast service—namely, audience fragmentation due to pay television, reallocation of advertising expenditures from broadcast to cable television, and audience and e:ivertising reduction which may result from such services as satellite to home broadcasting. e This proceeding addresses the effect of the distant signal carriage and syndicated exclusivity rules on television service to the public. Our methodological approach has been to ascertain the amount of audience diversion that will occur in the absence of the rules and to determine whether these losses, if any, will affect the service from television broadcast outlets. With this in mind, pay cable and other services emerging in the market are relevant to this proceeding only to the extent that they will affect television broadcast profitability. At this point we are lacking any evidence that they do. 140. In addition, cable systems do not compete significantly in advertising markets. For example, even though almost one out of five households in the nation subscribed to cable television, advertising revenues for the cable television industry were less than one tenth of one percent of those of the television broadcast industry in 1978. Thus, we do not envision that the growth of cable television will compound any adverse impact that cable may have on television stations’ profits by siphoning advertising revenues from broadcast stations for cable tems. 141. NAB also alleges that the Commission has made no attempt to consider how . . . carriage of specialty stations carrying substantial amounts of syndicated programming will increase the degree of program duplication dramatically.”'*! However, as noted in para. 63 of the Report in Docket 21284, we previously had determined that the cable carriage of specialty stations would contribute to the welfare of consumers, while not adversely affecting the ability of commercial broadcasters to provide a satisfactory level of service to the public. Moreover,our conclusion in this proceeding is that the unregulated cable carriage of syndicated programming also will act to promote the affected.” It is clear that our mandate is to best judge that which is in the public interest. The criteria we employ to make this judgment are described in the first section of this Report and Order. 179 Supra, n. 93, at 111. 180 We are aware that some parties have submitted partial summaries of the data in the “Nielsen Pay Cable Report.” We are unable to ascertain the effect of pay cable television on local station audiences from the data submitted. However, other studies suggest that pay cable will not affect significantly the audiences of local television stations. See the survey by Video Probe Index, supra, n. 162. See also Stations KMIR-TV and KPLM-TV, 66 FCC 2d 576 at 582-3 (1977). 18! Supra, n. 93, at 143. 7 FCC. 4 T2A Federal Communications Commission Reports public interest. Nothing has been presented here to suggest that our decision in 1977 to permit unlimited cable carriage of specialty stations was incorrect. 142. Capital City Television et al. finds it “curious that the Commission has so far shown little regard for these smaller market broadcasters, and instead has focused in its conclusions almost exclusively on impact on big city television stations.” However, to the contrary, the work on audience diversion due to cable in this proceeding has focused in large measure on small market stations. For example, Dr. Fisher and MPAA categorize the Park sample as being geared mostly to smaller markets. NCTA analyzec all markets with greater than 33 percent cable penetration. The najority of these markets rank below one hundred. NAB-WEFA und MPAA, by analyzing most if not all counties with greater than lv vercent cable penetration, also incorporate a substantial amount of infurmation on audience diversion due to cable in smaller television markets in their studies. Lastly, we focused on smaller television markets throughout our case study analysis. Our conclusions are directed appropriately to both big city and small market television stations. 143. One commenting party, WBOC-TV, went so far as to request “a replication study of the statistical analysis contained in the ‘Economic Inquiry,’ using data for the years in question supplied by Arbitron’s competitor, A. C. Nielsen, Ine.“ Replication of the statistical analysis undertaken to date in this proceeding easily could add more than another year to the termination date of this proceeding. The gain in accuracy that might occur certainly is not required at this point. After almost three years of study, we have been presented with no good reason to believe that Arbitron data is less reliable than Nielson data, since the estimates supplied therein are in statistical tolerance of each other. Thus, we do not find it desirable to further deley the conclusion of this proceeding in order that a very small degree of confidence might be added to its conclusions. 144. Summary. Our Report in Docket 21284 concluded that the incremental audience losses to local broadcast stations from eliminat- ing the signal carriage rules will be less than 10 percent in the foreseeable future except for the most extreme cases. This conclusion was drawn from all of the substantive work on au hence diversion that was wadertaken for this proceeding—NCTA, MPAA, NAB-WEFA, Park and the case studies—after necessary adjustments were made to the studies. It is important to note that no new study has been submitted which suggests that this conclusion is incorrect. In fact, the majority of comments on the Report in Docket 21284 consist of criticisms of only one of the five audience studies—the Park study. 182 See the Firsi Report and Order in Docket 20553, 58 FCC 2d 442 (1976). 183 WBOC-TV, Comments in Dockets 20988 and 21284, September 17, 1979 at 4. 79 FCC. 2d CATV Syndicated Program Exclus. Rules 725 However, in the Report, we characterized the Park Study as overstat- ing the effect of cable television on local station audiences and we provided numerous reasons and examples demonstrating the validity of this characterization. Our analysis essentially has been ignored. Instead, the commenting parties have submitted a large number of criticisms of the Park study attempting to establish that it understates audience diversion due to cable. These criticisms address what we have shown in this Report and Order to be minor problems that do not significantly affect Park’s results. Our belief remains that Park overestimates the effect of cable television on local television station audiences. 145. Additionally, several parties have attempted to obfuscate our criticisms and adjustments to the NAB-WEFA model. However, the issue here is clear and simple. WEFA’s employment of a “logit” ification for its structural equations causes an inherent bias in ir results because small independent stations must be predicted by the model to suffer greater percentage losses in audience from distant signals than larger stations, regardless of what the data actually may indicate. The responses to our criticisms of the NAB-WEFA model have acted to confirm, rather than contradict, this conclusion. We also have provided numerous reasons and examples demonstrating that the NAB-WEFA predictions of audiences losses to independent stations from cable television are overstated. 146. Finally, and most importantly, our detailed analysis of “grandfathered” markets and “worst case” broadcast stations has received criticism relating only to the procedure employed to deter- mine audience diversion. However, not only did the commenting parties fail to show how our results would be changed with different methodology, but also we have found that these criticisms are invalid. (See discussion below.) 147. In summary, we believe our analysis demonstrates convinc- ingly that 1) the data relied upon describe accurately the cable television and television broadcast industries; 2) the methodology employed is valid and has been applied properly; and 3) the conclusions are derived correctly from the available information. 148. The Impact of Distant Signals on Public Service Program- ming by Local Stations. The Commission has long been concerned about the effect the presence of cable television might have on the ability of local stations to fulfill their obligations to serve the public by providing local programming options to their viewers. Our concern has been that if cable succeeds in diverting viewers from watching the signals of local stations to those of distant ones, the resulting decline in revenues of the local stations might force these stations to reduce the public service programming that they provide. 149. Traditionally, we have attached particular importance to local public service programming because of the effect it may have in shaping the attitudes and values of citizens, in making the electorate 79 FCC. 2d 726 Federal Communications Commission Reports more informed and responsible, and in contributing to greater understanding and respect among different racial and ethnic groups. Since the social benefits of this programming exceed the private benefits of the actual viewers, we have sought to assure that the public will capture these benefits and, thus, for example, the Commission has recognized the necessity for licensees to “devote a reasonable percent- age of their broadcast time to the presentation of news and programs deboted to the consideration and discussion of public issues of interest to the community served by the particular station.” Fairness Report, 48 FCC 2d 1, 2 (1974) quoting Report on Editorializing, 13 FCC 1246, 1249 (1949). 150. In this proceeding, we are interested in determining what effect the carriage of distant signals has on the ability and propensity of local broadcast stations to provide local public service programming. To measure this effect precisely would require an elaborate set of information. Unfortunately, however, a fully descriptive or accurate set of the information necessary for this determination is unavailable. Most importantly, the expense data collected from television licensees by the Commission suffer from a lack of uniformity in accounting policies.'** Thus, the reported results for station expenses and profits cannot be relied upon in a cross-sectional econometric analysis that is undertaken for policy purposes. 151. Faced with these data limitations, studies have attempted to estimate statistically the relationship between station rever ese 1 — — 2 2 =F a> ~- oa 91 92 95- 96 93- 95 10 94- 93 100-101 18 1 8 91 $33 2313 3 — 2. 32 — * data ne by K.. pemetreticn ia nete of cach type. 79 F. CC. 2d CATV Syndicated Program Exclus. Rules . 96 99-100 // 96 T- 92 92 94 1 93 ‘a 68 66-90 „„ 08 97- 99 94- 96 6 69 87- 69 91 93 aS- 67 78- 60 “@oe 20 63 * 95 7 09 21 84 ile 76 7 96 89- 91 a- 83 12 06 40 39- 62 . — penetration when the amass aurtet 2 wenred, calculated using equecios (*) is Bar \iEB7i, . 27). 79 FCC. 2d Reports Federal Communications Comm 850 SSS 222 S52 888 S22 ses Sas #8 sag ere 1 le l t f t e 14 467 770 822 828 $22 $25 322 828 aoe baa 85 22 — 882 518 P82 HS 22 32393 er ik bed ii GER kit eie baa tet bt ebe 444 444 444 444 4464 244 41 444 282 2283 ‘ ssn 282 — gag 2328 S82 444 888 333 S53 “we nee “a@ee “» + 5x 32) = 238. Thus its total audience is .408 x .280 x 64T + .238 x .209x = 0.987T. If there is no cable and cable does not lead to increased viewing: Of those households that would not subscribe to cable if it were offered, the fraction using television is 280. The corresponding fraction of households that would subscribe if they could is .299; these are more avid viewers, even in the absence of cable. The station attracts a 408 share of both portions of the audience, for a total of 408 x .280 x .64T + 408 x 299 x .36T = .1170T. If there is no cable and cable does lead to increased TV viewing: Of those households that would not subscribe to cable if it were available, the fraction .280 is using television. The fraction for households that would subscribe is the same. They would watch more if they did subscribe, but without cable they are indistinguishable from the others. The station gets a .408 share of both portions. Its total audience is .408 x 280 x .64T = 408 x 280 x 36T = .1142T. These three audience calculations «re the basis for the audience diversion projection. The network VHF station's audience with cable (0.987T) is 84 percent of its audience without cable if the self-selection hypothesis is true (.1170T), and 86 ep pp gpa ag ta ˖ — toe ama the correct range is from 84-86 percent using Fisher's weighted averages, 79 FCC. 2d CATV Syndicated Program Exclus. Rules 853 In fact, it makes almost no difference at all which averages are used. Projections based on Fisher’s weighted averages and my revised audience share equation for the full day? are shown in Tables 12 and 13. They differ from the projections using my averages (Tables 3 and 4) by at most one percentage point. ~~ compared with 84-87 percent calculated in (1979a) using my averages and 79-80 in Fisher’s erroneous calculation. Similar calculations for the UHF affiliate yield a range of 92-94, compared with 92-95 in (1979a) and 84-86 in Fisher. ? This Note, Table 2. 79 FCC. 2d 854 Federal Communications Commission Reports Top-30 Markets 310 98 0 0 2 11 986 8 9 102-103 & K 0 0 5 11 9 % 7 99-100 + 97Tt- 0 3 6 11 96 * 9 „ 6 „% „11 98 80 = 0 0 2 16 7 * 97+ 9H 102-103 se 0 0 6 16 93- * „ „„ 96 + 252" 0 3 6 10 92- 92 = „„ „ „ 1 0 So 0 0 2 8 98 101-1011 „ « 0 0 6 * % * 9 9 „L110 0 3 6 > 95- % 97-98 & oe: 10 9 9 0 0 3 20 4- 3 -s ° 0 0 „ 20 90- 91 * 91 0 3 0 20 99 90 “ow... an: 10 9 0 0 0 2 17 6 7 — 0 0 3 17 93 4 339 139 9 0 0 0 2 is 94- „ 101 * r 0 3 3 is 1 = 9 1 2 0 9 0 i 0 2 20 91 92 51 1 0 5 20 + 0 ow 1 5 a 23— . “ewe Below 100 nerkece 180 9 0 0 0 1 29 96 968 94 4) 0 0 29 9 91 ear 0 3 4 29 7 69 sae , = 9 0 1 0 1 1 7 09 - 06 ase 1 0 * n 60 62 @& 67 243 1 1 s 11 76 % = & 90 01 0 9 0 2 3 1 41 7 79 5 . 2 0 * 41 70 72 70 7 2 3 * — 6 70 42 “average present penetration in markets of sech cy. Bate cuppliaed by FCC Gin tees audience ever the full breadcast dey. ‘Tae See (100 perenne) is the @udiomee if cable Gece aot exist; tt coewmes that al) ae endicnce wommthes lecal St tene ia the aheence of cable (thet is, there are ae erecleppiong eageels free edjecent eartats). 79 FCC 2d CATV Syndicated Proyram Exclus. Rules 855 Cable Tadex of Local Statice 2822 ee oe 1— Ser Total enen 2 0 3 2 0 0 2 8 „ 97 95+ 97 105-107 96- 96 0 0 ‘ 27 0 92 90- $2 98-100 91-93 0 3 ~ 37 BS 8S- 67 95-97 86- Os 3 0 1 1 0 0 2 26 33-86 „ 104-106 95- 97 0 a ‘ a 89 87+ 89 95- 97 - 90 0 3 ‘ 37) A> 8s 62- 4 91- 93 63- 83 3 0 0 2 0 0 2 m M 95 102-104 33-7 0 0 6 2 17 86 94- 96 (6 89 0 3 ‘ 1-83 69 % 2 64 3 0 9 | 0 0 3 3% 1-827 91 93 0 0 6 2 - 87 45-67 0 3 * 76 80 7 10 D 3 6 29 0 0 0 2 W * | * 95 0 0 3 1 . 0 7 6 0 3 3 41 8 & 83 40 62 i 1 29 0 0 0 2 2 v0 92 «(99-101 $2- % 0 0 3 12-4 90- 92 14 66 0 3 3 . „ . 86 * ze 9 0 1 0 2 12 4 12 64 0 3 1 N- 73 51 73 3 3 620s 62+ 65 42 65 Below-100 Markece 3 4 9 0 0 0 1 a „ 96 * 98 0 0 4 1 8 71 29 91 0 3 4 8 123-83 15-43 3 °° 1 0 1 2 . 81 1 4 12 83 i 0 4 7 (38-73-76 67 70 1 3 ‘ „ „ „ K % 36 61 10 9 0 2 0 1 7% (0 63 9 63 1 0 * % 43 47 8 47 2 3 * W „. 17 3?- „ “Bvencual equilibriue penetration wees the whole market is wired, calculated using „eee eudionce ever the full breedeast day. The base (100 percent) te the oot all the sudience wetches lecal FCC. 2d 856 Federal Communications Commission Reports Conclusion Fisher's criticism of my total audience equation is irrelevant to my projections. | use the equation only to calculate a sort of average total audience. The audience diversion projections are insensitive to whether I use my averages or Fisher's averages. In my earlier study, I distinguished among distant network signals only on the basis of whether they are VHF or UHF stations. As pointed out in (1979a, p. 9), and reemphasized by Fisher (1979, pp. 14-15), this treatment may mask significant IIe Se correcting this problem in this Note by further distinguishing between stations that are sometimes blacked out on the cable to provide nonduplication protection to local network affiliates, and those that are not. One expects, and the results confirm, that the former are less attractive than the latter. Some important differences may nevertheless remain unaccounted for in the new results. For example, consider a market with two local network stations. If the cable system carries only one distant station affiliated with the missing network, we would expect that station vo be just about as attractive as the local stations. In contrast, if it carries three distant stations affiliated with one of the networks already represented in the market, we would expect their attractiveness indices to be much smaller, even if they were never blacked out. Even my new estimates fail to distinguish between the two situations. Rather than complicate the model to take such differences into account (a strategy that, in my judgment, is unlikely to be productive), I ran the simulations shown in Tables 14 and 15 to see what difference this additional complication might make. For these simulations, I assume that distant primary network stations have attractiveness indices equal to one.' The resulting diversion projections differ from those in Tables 3 and 4 only for ne- two-station markets. In such markets, the Table 14 and 15 projections show quite a lot more diversion due to cable operating under present rules (2 to 7 percentage points more in the near term, 5 to 12 percentage points more in the long term) and somewhat moe for cable operating under relaxed rules (1 to 4 near term, 3 to 6 long term). For policy purposes, however, one is perhaps most interested in the incremental effect of relaxing the rules, and this is projected to be smaller in Tables 14 and 15 than in Tables 3 and 4. Rather than .38, which was estimated by lumping together all distant VHF affiliates not blacked out on the cable. I continue to use .19 as the index for duplicate networks on the cable, assuming that these stations are blacked out part of the time. 79 FCC. 2d CATV Syndicated Program Exclus. Rules 857 Top- 30 Merkete 10 12 0 0 2 11 98 99 96 99 102-103 6 99 0 0 0 11 96- 97 96- 97 99-100 96- 97 0 5 6 11 9 96 95- 96 96 99 96 97 1 0 1 0 0 2 16 97- 98 * 98 102-104 97- 98 0 0 0 16 93- 95 - 94 97- 99 93- 95 0 5 0 16 92- 94 1 94 Me 97 D3- 94 180 9 2 0 0 2 a 96- 99 101-102 98- 99 0 0 4 a 96- 97 98- 99 96- 97 0 5 é U 95- 96 97- 96 96- 96 180 9 0 0 0 5 20 94- 95 * 95 0 0 3 20 90 92 90 92 3 5 4 20 89- 91 89- 91 Socom, 0_ Markee 10 9 0 0 0 2 17 908 86 0 0 5 17 93- 9 93- 94 0 5 5 17 92 83 92- 93 2 1 9 0 0 0 2 10 9 96 100-101 93- 97 0 0 5 10 90- 92 „ 96 91 93 0 3 5 is 89- 91 93- 4 0 91 2 0 9 0 1 0 2 pt) 8 90 4 — 90 1 0 5 a 23 6 8 0 1 3 3 rh) * 65 * 65 Below" 100 Machete 108 9 0 a 0 1 2 0 9 99 0 6 4 29 29 92 29 92 3 3 4 29 97 a9 17 69 1 1 9 0 1 Qa 1 11 $2- 65 - 91 4 67 1 0 a N 78-0 2 64 78 61 1 5 + n 76 „ 60- 83 78- 60 12 9 0 2 0 1 1 0 72 70 72 1 Qa & 41 “+ 66 69 7 5 a 1 63 6 65- 60 — present penetration ia earketes of each type. data supplied by FCC Cable duress. » 00 ) te che average sudience ever the full broadcast day. The base (100 percent l we 4 4 aequmes that all che sudience wetches local exist pede bof yang yyy *+ — 4 4 79 FCC. 2d Federal Communications Commission Reports Table 15 LONG-TERM EFFECT OF CABLE ON LOCAL STATICN ACDIENCE [N REPRESENTATIVE MARKETS ONDER PRESENT AMD POTENTIAL RELAXED CASLE 22GULATION Aseuming AtCractivesess [odex of Oistanc Primary Yecwork Sigoals = 1.00 — Index of Lecal Statics s Audience” If Cable Exiece Ears £ Pris. el. — — _ — . Top 50 Markece 9 0 1 2 0 0 2 23 %- 98 95- 98 105-107 96- 99 0 0 6 27 90- 92 90- 92 98-100 9I- 93 0 3 6 x7 23— 63 S5- 58 95- 98 6 49 10 1329 0 0 2 26 95- 97 94- 96 104-106 95~- 97 0 0 5 50 37 90 87- 89 95- 98 88 90 0 3 6 * $2- 45 $2- 3 71 „ 83- 65 » *« _ 0 0 2 27 93- 96 103-105 95- 97 0 0 6 5 36— 69 N 6 7 90 0 3 a BY 20 63 9 92 2 64 10 9 0 0 0 3 50 91 93 91 93 0 0 o 12 4 67 14 67 0 5 6 43 78- 61 78- 61 Second-$0 Markets » © 9 0 0 0 2 29 4 96 „ 96 0 0 5 n 86 89 96 69 0 3 5 41 $0- 65 10 83 9 6 9 0 0 0 2 32 90- 93 99-102 92- 95 0 0 5 5 $2- 65 90- 92 4 06 0 3 5 4s 73 78 63- 66 76— 79 2 0 9 0 1 0 a ak 76 80 76 80 1 0 N $i 68- 71 6 71 1 3 5 62 59- 62 59- 62 Below 100 Markets 3 0 9 0 0 0 1 26 7 99 7 99 0 0 4 11 19 91 9- 91 0 5 4 12 45 $2- 65 1 1 9 0 1 0 1 12 72— 73 1 83 S- 18 1 0 — * 61 64 68- 72 6 66 1 1 * er $2- 33 60- 63 33- $8 1 0 9 0 5 0 1 74 17 10 4?- 30 7 0 s 76 3+ a1 - «1 2 3 * 43 Jie 4 jie * a. ventual equilidetum senctration ween the ole sarket 16 wired, n % (% te Park (1971, . 27). — sudience ower tne full Sroadcest dav. ente if cable does act exist; it assumes thet all che sudience watches local at La tne ae of . (chat Ls, tete are ag overlapping signa.e {roe adjacene mckere). 79 FCC. 2d tm.culated salag The base (100 percenc) te tne CATV Syndicated Program Exclus. Rules 859 Conclusion My results in this Note distinguish between stations that are blacked out to provide audience diversion projections very much from those in my earlier report. If one further assumes that distant primary network stations are just as attractive as local affiliates, the projected diversion due to cable in one- and two-station markets is increased, but the projected incremental diversion due to relaxing present rules is decreased. Differences In Off-The-Air Reception Fisher (1979, pp. 15-17) criticizes my assumption concerning off-the-air reception.? In (1979a) (and in this Note as well), I assume that a station that attracts any audience at all off the air in a particular county can be received anywhere in that county.’ Fisher (1979, pp. 15-17) apparently advocates using a different, somewhat more — assumption, one which he previously employed in an early cable TV study (1966). He assumed that each station's NWC' measures the fruction of households in the county that can receive it.? ne 1 strongly suggest that neither Fisher’s assumption nor mine is perfectly correct. The histograms show the number of stations received in my sample counties, by off-the-air and cable households respectively, that have NWC falling in each 10 percent interval from 0 to 100.5 Fisher's assumption equates NWC and receivability. If the assumption were correct, all stations carried on the cable should have NWC equal to 100 percent in cable households, since there is no question but that they are received on the cable. They do not; there are many stations with NWC substantially smaller than 100 percent in cable households. On the other hand, if my assumption were correct, the cable and off-the-air histograms should have the same appearance. If all stations received by anyone can be received by everyone, then only programming differences remain to account for different NWC. There is no reason to expect that the distribution of programming differs much between 2 There is no difference between Fisher and me over cable reception. All subscribers to a particular cable system can receive all of the stations carried by that system. (Fisher mentions blackouts to provide nonduplication protection in the context of cable reception. I agree with him that it is important to distinguish between stations that are blacked out and those that are not, and I do so in this Note.) 3 In addition, for all of my results except those in Tables 6 and 7, I further assume that 15 local stations with no off-the-air audience in the county can also be received there. Net weekly circulation, the percent of all TV households that watch the station at least once a week. ? Fisher further assumed that any household’s ability to receive any one station is independent of its ability to receive any others. The result is that all television households in the county are divided into groups of different sizes, each of which can receive one of the possible combinations of signals. In a simple example, say there are two stations received in the county. Station A’s NWC is .7, and station B's is 4. Then Fisher's assumptions imply that 28 percent of the television households can receive both A and B, 42 percent receive A but not B, 12 percent receive B but not A, and 18 percent receive neither. (These percentages are calculated as follows: .7 x 4 = .28; 7 x (1-.4) = .42;(1-.7)x .4 = .12;(1-.7)x(1-.4) = .18.) In a formal sense, this second (independence) assumption is perfectly compatible with my treatment of reception patterns: If all TV households can (by my assumption) receive each of the stations, then all of them can receive all of the stations. (The calculation is just 1 x 1 = 1.) 3 All have positive NWC except for the 15 local stations that are assumed to be receivable even though their off-the-air NWC equals zero. 79 F.C.C. 2d 860 Federal Communications Commission Reports stations on the cable and stations received off the air, so the NWC distributions should be similar as well. They are not, implying that there are in fact off-the-air reception differences within counties. 79 F.C.C. 2d 861 CATV Syndicated Program Exclus: Rules Number of Stations 200 — 150 - 50 * 1 — 20 40 Off-the-aic NWC 100 4150 + 100 40 60 Cable NWC 60 Fig. 1—Frequency count of all stations received in 121 counties by their net weekly circulation off the air and on the cable 100 Number of Stations 79 FCC 2d 862 Federal Communications Commission Reports Conclusion I can see no reason to substitute Fisher’s more complex (and necessarily unrealistic) assumption about off-the-air reception patterns within counties for my simpler (and necessarily unrealistic) assumption. Differential Effects of Distant Signals on Independent Stations It has been asserted that allowing cable systems to carry additional independent stations will take more audience from local independents than it will from local network affiliates. (See, for example, Schink (1979)). This may or may not be true; I know of no statistical evidence that either supports or refutes the assertion. The simulations in Schink and Thanawala (1978) appear to support it by showing a larger proportionate audience loss for independents than for affiliates when the number of imported independents is increased. However, as pointed out by the FCC (1979) and confirmed by Schink (1979), this is simply a result of the assumed specification of the model. The logistic transformation of the dependent variable together with the linear form of the right-hand side of the equation assure that stations with smaller initial audience shares (like independents) will suffer larger proportionate reductions in audience when imported signals increase. My simulations in (1979a) and in this Note appear to refute the assertion by showing the same proportionate audience loss for all local stations when the number of imported independents is increased. However, this result is also hard wired into the model specification. ' I suspect that there do not yet exist data sufficient to provide a good statistical test of the assertion. So far, cable systems carrying varying numbers of distant independent stations are scarce in areas with local independent service. Certainly my data are not sufficiently rich to test the assertion, no matter how sophisticated the model fitted to them. Conclusion Neither my model nor Schink and Thanawala’s sheds any light on the possible differential effect of imported independents on local independents. The question of whether or not independents lose a larger share of their audience than do affiliates is probably unanswerable by statistical methods until we have accumulated more experience with cable systems carrying distant signals into large markets. Concluding Remarks Of the six “problems” 7 pln lige it appears that four (data problems, time period disaggregation, total audience, and duplicate programs) have almost no effect on my results. There is no simple way to check the effect of the other two (off-the-air reception patterns and differential effect on There is some case study evidence against the assertion to be found in the grandfathered market analysis by the FCC (1979). The effect of cable on the audience of the seven independent stations studied there (pp. 84-88) is much the same as its effect on all local stations in the six grandfathered markets that were also studied (pp. 74-84). In my model, the share of a station of type j is , = % Zan, where a is the attractiveness index for stations of type i, nis the number of such stations, and the summation is over all receivable stations. The proportionate effect of increasing the number of stations of type k on station j's share is 1 %j = Lan, Som which is the same for all other stations as it is for station j. Schink (1979, pp. 4-7) for — reason mistook my nonlinear model for a linear one and derived a different result. 79 FCC. 2d CATV Syndicated Program Exclus. Rules 863 the independents). But neither is there any evidence that would support adoption of industry-proposed treatment instead of the equally plausible treatment I have used. FCC. 2d 864 Federal Communications Commission Reports Appendix Tables A.1—A6 i — . v . 5 = * 5 * . — Jey ro io * 2 au o aw 63. 5 oo «8 a us -u aan a. cn 7 an — Ss oe * # ni 2 1-0 01 uu “2 +13 £09 en * cn an an ¢n vr * oe 1 2 * an oo a. on 9 0 1-0 - * 1 ou o (3.4) a. an Gn * 0 — 8 2 * on 6 * -* an as ar 10 ot, we oe) . ) 0 o * oy . - 2 on ( ao d. % (% 22 r 1% m P 1.13 os (4) (8) an «0 ar 05 le 0 G. % 2 . „%% Gn On — — — Au ass 2 — 84 1 bo -.8 LA ee * no an a.) 0.9) = * 2 aw au ‘ awn oo cw ae tn sable riering oo * u 1 1 «(oe o an an ao «a. = — 97 =» u a ae in (n an we onl „r certasio ls Us Stet lam eaere +f ‘ete em ienee tenteg „ „ Letiantes eeeffiaievte ere setrectivaness \asiers” te „** „„ „delt ere „ fee fare .9'%e) fon 6 doce rlet ies of the eral ianer gemtrelioed leeet ewneree set lanrion aerlet aeet „ © „„ „„ — „„ „„ eee 23 owt „„ f Z „n „ e „% ˙·% „„ * 1 „„ „„ „ 79 FCC. 2d CATV Syndicated Program Exclus. Rules 865 appeedia Taple 4.) N. mor n Muss ERATIONS Lo - * — id) on) (6. 5 . % (6.05 5 — 3 = . ao aw ao on) On) — io oo 0 — — 0 an (. . % (75 * — 0 1 10 66. 0% “op n Go. 5 oo -» 1. HB * * on Gam 6. % (6.0% 7 . * a7 (1. 27 (4) cn ao an — ra 2 10 ** or | a.) (. anu an * 1-6 41 wu a ® un 6. 5 on 6 = 25 5 a 1 10 mw.» ao an a.m (2.4) — Vtage 17 Lo a ua 2 * * 1 68.95 an” a 01 ee 17 . — 411 . da Ce) oo „ "= 10 a» - ua 1 o~ on 66. 7 au ae ar o * u “ue * a.e 1 * 1 * an dun W . veritable le „ „%% e „ % „ dering cons Clee period 6e roelficience ere rr „ toe Fore ene fer ener ä — K * 09 „„ — ered ereriene een =! Siereed eve “8 (eet aren (Loree seme re etee lone Fieree =F „ Pee „„ “Sie off. sent te eormmiicns to — „ — —— — 79 FCC. 2d 866 Federal Communications Commission Reports * — ‘ as U — — 2 1 ad 7 = * an af Gn =a * a 2 os aan nao an tw 27 io * 2 - * 1. * o wb 6 on ten 6.0 tun . * 1 * ” ta an 0 0 . nn —— | oo * * 1 — * an an GH t& = » = 2 2: # an oo an GH to ~~ * 2 - . * on @ an wen On * „ „ 1 * ” (eo - «© % ao — — * _ - — * = oe an an du & * s * a — *. n oo anv «9 e 11 * * 117 * — o ane «@ an a) GA OH - » * * * * (oe „% « oo en iain * oe - * 3 — o „ en „%% te „ 2 a) * ane aa mn ae io 7 1 a) 9 * W . o wn 4 on En „an wn W « * u * 1 au « ao an — Te * 1 « - - oo (np 1. N 1 * “ a * * on on” oo on oe ~~ we * “ » = * 1. * „ an o aw O8=8F 2h 609 - » * - * 1 „ * „ oo on 0 ˙·——— —1ͤ—A2A2— —ů 42 ͤ— —— „ 2 — * „ — —— (i). „ — „. * — — — —— ree — 2 2 „„ „ „„ ee „„ „ ꝶꝙ—·————̃ ——.— •W———— — =. ed —U— ꝗi! 22 1 * * „ —K« — „„ „ * * » —— 22 — | 6ꝛà•» — % „„% «% 2ĩͤ% "Ree fre ee — 22 «44 amaenmeree — 2 „ 2 ü „ 2,7 „ Tele amet): cee 79 F. CC. 2d CATV Syndicated Program Exclus. Rules 867 Appendix Table A.4 SECOND STAGE CONSTRALNTED AUDIENCE SHARE EQUATION ESTIMATED WITH SAMPLE THAT EXCLUDES LOCAL STATIONS WITH OFF-THE-AIR NWC EQUAL TO ZERO Network* Independent* L D DB L DD tx * Pull Day 1.00 10 -ll -61 -.26 () (2.6) (2.8) (3.9) (2.5) 32 (08) 18 27 — 04 (10.4) (.4) (-9) (3.8) (.2) Off-che-air viewing VEF UBF Cable viewing Ver 1.00 39 18 39 36 47 1.30 ) (9.3) (d) (3.3) (3.3) (4.8) (12.6) UEF 67 12 06 33 27 (e) (1.0) (4) (e) (3.5) NOTES: The dependent variable is the station share of total audience dur~ ing the full-day time period. Bsetimated coefficients are “attractiveness indices" in equation (1). Asymptotic t-statistics are in parentheses. See Park (1979c) for a description of the nonlinear generalized least squares estimation method used. 1 indicates local stations. D indicates distant stations not blacked out. OB indicates distant network stations blacked out to provide aon- duplication procection to local stations. dite coefficient is normalized to one as a reference value—nsot esti- mated. “this coeffictent is constrained to equal K cizes the correspondong off-the-air coefficient. k is an estimated multiplier. arb coefficient is constrained to equal BLK tines the corresponding cable coeffictenc for distance netvork stations that are sot Slacked out. BLK is en estimeced gultiplier. 79 FCC. 2d 868 Federal Communications Commission Reports éppendix Table A.5 NEAR-TERM EFFECT OF CABLE ON LOCAL STATION ACDIENCE IN REPRESENTATIVE MARKETS UNDER PRESENT AND POTENTIAL SELAZED CABLE BECULATION: Composite Estimates % on Equations for Four Time Periods (Deytine, Early Fringe, Prime Time, Late Pringe) Cable ‘Index of Local Statious Distant Stations bes- 4 Le Existe Network eot Pria. Oupi. cr nn Indepencest res Top-50 Marsecs 10 139 0 0 2 11 96 99 98- 99 101-102 98- 99 0 0 6 11 96— 97 96- 7 99- 99 6 97 0 3 6 11 96- 97 95— 96 98- 99 96- 97 3 0 11 0 0 2 16 7 98 96- 98 101-102 7 98 0 0 6 16 94- 95 93- 94 96- 96 G4- 95 0 3 6 16 93- 4 9 93 95- 96 93- 9% 10 9 2 0 0 2 4 98- 99 100-101 98- 99 0 0 6 4 96- 97 98- 98 96- 97 0 3 6 4 96- 96 97 98 96- 96 10 9 0 0 0 3 20 94- 95 oe 95 0 0 6 20 90- 92 $0- 92 0 3 8 20 19 — 91 29 91 Second-50 Markets 10 9 0 0 0 2 17 96 — 98 96- 98 : = 0 5 17 93- 94 93- 94 0 3 5 17 92— 93 72 93 N. 9 0 0 0 2 is 94- 96 100-102 95- 97 0 0 5 is 9l- 92 95- 97 91 93 0 3 5 u 69- 91 e- 95 90- 92 z 0 9 0 1 0 2 26 $i- 93 9i- 93 1 0 3 rh) M- 88 16 — 8 . 3 5 20 a5- 67 GS- 67 Balow-100 Markecs 10 9 0 0 0 1 29 76— 19 96- 99 0 0 ‘ 2 90- 92 90 32 0 3 U 29 17 90 17 70 s 8 9 0 1 0 i vu 17 69 95-97 89- 92 1 0 * 71 10 $2 86 48 12 4 1 5 + n 76 60 - „ 10 12 10 9 0 2 0 1 41 77 40 7 60 2 0 ‘ 01 9 23 70- 71 2 3 . «i 4-71 9223 — greeent penetration in sareets 2f eee ee sate euppiied oy Foo cas.e Bureau. average esudience ower the full Sroetcest far. The Seee (100 percent) ie the eudience if cable toes sot exiet, t % „% chat all he audience war cee loral tat: n in adjacent wc 79 FCC. 2d „ %%% te .abie 333 t rere werlecping siqase t CATV Syndicated Program Exclus. Rules 869 Appeadix Table 4.8 LONG-TERM EFFECT OF CABLE OW LOCAL STATION AUDIENCE A wude MARKETS UNDER PRESENT AND POTENTIAL RELAIED CABLE LEGCLATION: Composice Eatimates Based on Equations for Four Tine Periods (Dayctias, Early Pringe, ?rime Time, Late Fringe) Cable Tae of Local Stacious — — — If Cable Exists Netvork Independest Prim. Dupl. Independent Ter- Markets 1 0 1 2 0 0 2 2 96- 98 95- 97 103-105 96- 99 0 0 6 27 91 93 90- 92 96- 99 71-53 0 3 6 xu 66- 89 &5- 67 93- % (6 69 10 18 0 0 2 2⁰ 93 97 94- 94 102-164 95- 97 0 0 0 » 68- 90 7 89 93- 95 84- 90 0 3 cy * 13 86 12— 84 89- 92 83- 86 9 80 0 2 0 0 2 27 94- 96 101-103 9$- 97 : 0 0 6 30 97 89 92- „ 88- 90 0 3 6 ** 11 & é7- 90 2-83 * Ww 1,506 3,294 11 a 478 00 15 7. ” ** | 1 W ht lve Oreo, | i *, im * 0 1 un. wi A %% „„ .. „n n ma 1 1 bie lew Tein rells, tive iy in * * 7 6 (100 ” 1 sany ‘snpayq wosbosy paxonpulig AL vo Pe OA Best Copy Available o-7 STATE Fe. ME) SAEETS WHEE FOTYNTIAL HARM IS AIFGED IN OPOONTS WSHRGIVE TO We MT y IN UOCKETS 20988 Anes 21204 ture? * el: in «19788 2 bn ds 1973 ism 8 1973 op. 1978 + wht 1 caty tv Sela gal. revs reve = vie Traces ume 86 ¢ r eee a 1 _(0e) % . „ eue, T™! Lid * wo 2¹ 15 16 23 390 242 ente, A is N. 11 20 23 9 10) 11 123 154 . t. ube a 11, 12 14 5¹ nm «4 i 2 „ (ALU) battle Creek, al * ., it U 2¹ 10 % wo ra) (~)to(*) 1. been o i 20 N. 21, . il 16 435 (10) 106 5 ne. ID ial *, ie 8 7 le * 0 116 ana mult (MA, UD Leweville, om EI . “ s) 5 7 40 “ E N e e. N. 17 an, 11, 10 10 0 0 a 099 tk (AY, rt tau), Ot * N. 28. (18 10 le 12 19 lM 92 ila Aw (oat llite) glee lt © rn N. 28, (15) 10 16 Included In WIL idential Financia) let MOD SUOLDRUNUWOD [LAPT 988 spioday uνEν,em Pe O04 & (*)tot-) 382 BM ane T W oe ae Bt ee eee et ad 6B) (GDS) (55%) (00"s) EP r — in 1975 wo ah (1,V) mw York, Ma ! N. 61,68 5 10 105 zin 128 4⁵ rn ew York, e N. 61 5 10 1 ſ½j% 81 69 win (Vv) tw York, 1 N66 5 10 1% 2 n 177 BTV (ivi Sante, A Bw Mit, le 27 * it} 2¹ 17 7 nie . A 91 . „ 10 12 4 5s 25 wo t. % San Fran. CA 5 N. 51. . 2⁰ * 6 % 424 i wen.t.U) tresneTulere,Ca 69 * 11 a 0 7 15 il yu? erTi 1.) ft. . I Oe , 11 1 1¹ 14 SPE auth fer, „ 11,18, ‘4 ” * 3 Confidential Pinanciel Date Deleted Best Copy Available sany ‘snpxgq wosbory pyonpulig A v Pe 994 * 8 rere — tere mn 19788 1973 978 1973 PL, an 2 1978 4 Ae (1 Vi seat (leTecumes A ld N. II, , 20 23 2 “ 100 uw) (-)eol*) , CA 5 N. 51, * 2 Sib 612 % 62,337 123,238 98 19,072 48,875 ial iN UNAS, WT 126 » it 0 se ‘ * 0 27 urn. VI 30 120 1/ STATION NOT IW CRERATION In 1973 — n „ 2/ SATELLITE STATION INCLUDED ~~ — rr 1 ane . — 92 neee Best Copy Available MOD) SUOLIDRUNUMO ea 888 spoday ue, 892 Federal Communications Commission Reports DissENTING STATEMENT OF COMMISSIONER Ropert E. Lee In Re: Caste TeLevision SIGNAL CARRIAGE Free Lunch I dissent to authorizing unlimited distant signals for CATV systems without including a syndicated exclusivity provision in the rules or at least a time for adjustment before a change in the exclusivity rules would become effective. The majority has rationalized this decision by calling it pro-competi- tive. I disagree. How can this situation be competition? The broadcast- er and the program supplier negotiate in the marketplace and establish a market price for the product which includes exclusivity. The CATV system takes the programming without participating in the market- place and without any regard for the contractual rights of those who have participated. It uses this programming for its own profit. I recognize that copyright legislation is supposed to be the solution for this problem. With syndicated exclusivity protection in our rules, it may be. As one who lived through the “Consensus Agreement,” the development of our 1972 rules, and the Copyright Act, I can assure my that maintaining syndicated exclusivity was the under- standing of all of the participants. It was one of the premises of the copyright legislation. The majority say that payment for the product one uses to make a profit is not our concern, but it is. A long line of cases starting with Southwestern Cable clearly hold that authorizing signal carriage and establishing the ground rules for that carriage from the public interest viewpoint is the essence of the Commission’s responsibility regarding CATV.! One aspect of our public interest concern, according to several of my colleagues, is fair play in the marketplace.? “Diversity” as an end in itself does not justify the Commission’s disregard for a fairly functioning marketplace, particularly when that diversity is simply a matter of timing; no programming will be excluded. I do recognize that times change and that the participants in the marketplace must adjust to change. I simply do not think that, on a warm day in July, the Commission should instantaneously change all of the ground rules governing the functioning of this marketplace and leave the participants without any time to adjust. Instead, I would have preferred to see the Commission authorize distant signals and phase out the syndicated exclusivity protection. The wiser and fairer 1 The HBO and NARUC II cases referenced by the majority deal with Commission restraints on the nonbroadcast services of CATV and, thus, have no bearing on this situation. The courts objected to FCC restrictions on CATV activities which really were competitive. Carriage of signals without any accommodation of the exclusivity rights of the broadcasters and program suppliers reminds me of the current problem pay programmers are having with the theft of their signals. My coileagues have been outraged by that situation. I don’t see how this is different. 79 FCC. 2d CATV Syndicated Program Exclus. Rules 893 decision in this proceeding would have been to provide a date certain in the future for the end of syndicated exclusivity protection. With knowledge of what our rules will be and of the period of time for adjustment, the parties could then renegotiate their contracts, settle the copyright issue, and establish a new marketplace environment that includes all of the participants. By allowing this period of adjustment, the Commission could extricate itself from its concerns about distant signal carriage without leaving chaos in the wake of its decision. Because the Commission has chosen to upset the marketplace without providing for any reasonable period of adjustment, I dissent. DissENTING STATEMENT OF FCC Commissioner JAMES H. QuELLO In Re: Report AND Orper N Docket 20988 (SYNDICATED Exc.usivity) AND Docket 21284 (Distant SiGNAL CARRIAGE). Over the past years in office I have more than supported cable deregulations—I have advocated it. I actively supported: the removal of the leapfrogging rules and the feature film restrictions, the waiver for the ARTEC cable system in Arlington, the deregulation of earth stations, the exemptions for smaller systems, stabilization of franchise fees und a host of other measures that I believed—and continue to believe—advanced the development of cable. However, I strongly believe that elimination of syndicated exclusivi- ty is inequitable, not needed, not wanted by a significant number of cable TV owners and operators, and is counter to long-term public interest. I have dissented to the Report and Order in its entirety in order to honor specific requests from the Chairman of the Committee which deals with copyright, the upcoming Chairman of the Commerce Committee, and a number of other interested Congressmen and Senators, all of whom have urged that this Commission, before undertaking any significant revision of the distant signal restrictions or syndicated exclusivity rules, should first coordinate such steps with appropriate committees in the Congress. Congressional leaders most involved with communications and copyright specifically requested that the FCC defer action until after the Copyright Royalty Tribunal review in September 1980. Among those writing were Congressman Robert W. Kastenmeier, Chairman of the subcommittee with copyright responsibility and oversight, and Congressman John Dingell, upcoming Chairman of the House Inter- state and Foreign Commerce Committee. Four key members of the Judiciary Committee, Congressmen Moorhead, Railsback, Swift and Sawyer in a jointly signed letter stated: “We know that Congressman Kastenmeier, Chairman of the Judiciary Subcom- mittee on Courts, Civil Liberties and the Administration of Justice, stated in his March 13 letter to you on this subject, a willingness for his subcommittee to review the need for legislation in this area in the next Congress. He also stressed the F.C. C. 2d 894 Federal Communications Commission Reports importance of allowing the Tribunal the opportunity to complete its first full years of duties without changing the environment within which the affected industries must function. We would like to join in urging that the Commission postpone any significant revision of the syndicated exclusivity and distant signal rules until Congress has had the opportunity to revisit this issue with the benefit of the results of the Tribunal’s first recommendations.” Other Congressional leaders who wrote letters urging deferring action were Senators Birch Bayh and Don Riegle and Congressmen Danielson and Mazzoli. I agree with their expressed concern that precipitate action could upset the delicate balance of the copyright and communi- cations policies under the 1976 Copyright Act. The action of the majority in adopting the Report and Order flaunts the requests of these concerned congressional interests. Aside from congressional warnings, I would have urged the retention of the syndicated exclusivity rule but would have been willing to eliminate those rules limiting distant signal importation by cable systems. As to the matter of retransmission consent, I would prefer to reserve judgment as to the legality of such requirement as well as the advisability in light of the 1976 Copyright Act. However, I am uncomfortable with the concept of expropriating a valuable property—a television program—with neither consent from nor compensation to the owner of that property. Although the Copyright Act of 1976 purported to deal with this problem, it is widely conceded that it has utterly failed to do so in any meaningful way. My second concern is the total disregard by the majority of the contract rights of both syndicators and broadcasters and the consequences of that disregard. Where the majority tends to view the importation of syndicated programs as some kind of free lunch for viewers, experi- ence has tau rht me that there is no free lunch. Producers of programs must have incentives and the virtual total loss of control of their productions after the initial sale to a broadcaster goes a long way toward eliminating the necessary incentives and creating a condition of program anarchy. Companies in both cable and broadcasting with a larger future stake in cable rather than broadcasting urge the retention of syndicated exclusivity (Storer, Cox, GE, etc.) The Commission’s Economic Report relied upon by the majority has received widespread criticism on methodology and objectivity. State- ments in the Storer filing in response to the Notice of Proposed Rulemaking are particularly significant. “The Report's chief defect is that the outside economists retained to prepare them had previously and publicly prejudged the questions they were retained to study. In consequence their conclusions were merely expectable and can be described, at best, as seriously flawed and negligently so. This assessment is harsh but plainly correct: the Reports pick and choose among the record materials, favoring those which support the “desired” conclusions while discounting, distorting, or even ignoring those which do not. An NCTA submission on impact was accepted uncritically while a NAB submission (the Wharton Study) was not. Two Cooper studies on behalf of 79 F.C.C. 2d CATV Syndicated Program Exclus. Rules 895 INTV were not even discussed in the Report; nor was the study by Professor Fisher of MIT or ABC’s smaller market study. “Even the Broadcast Bureau's telling critique of the economic analyses was largely ignored. Significantly, the Bureau had pointed out that they lacked analytical depth, failed to use current data, and should have employed a ‘more balanced appraisal.’ “Not content with elevating selective analysis to an art form, the economists also ignored completely the question of impact during fringe time the period of cable's greatest impact and independent television’s greatest vulnerability. Moreover, they dealt with ‘average audience losses’ in a way which recalls the six-footer in a lake with an ‘average’ depth of only three feet. The Park study had projected audience losses of 41% and 30% in single-station and two-station markets below the top 100, respectively, but the Economic Inquiry Report concludes that ‘in all but the most extreme cases the additional audience loss will be less than 10 percent in the —1— end (Par. 117). The r and devastating impact on at least 50 single-station markets subject to Park's predicted 41% audience diversion. “In short, the economic ‘analyses’ are objective only in the same sense that PLO judgment for that of the agency, can and does require that the agency base its rulings on a coherent record.” If a study or any evidence indicated that the syndicated exclusivity rule imposed a significant burden hampering the growth and develop- ment of cable television, I would carefully weigh that factor. To the contrary, the current pace of cable growth is exploding! Broadcasters are in an almost desperate rush to get into the business. Also, if it could be shown that the public stood to gain more than it will lose through abandonment of the rule, my choice would be clear; the public must be served. Arguments extolling the virtues of “time diversity” notwithstanding, we are abandoning an incentive for true diversity of programming—the production and distribution of pro- gramming not now available. We are simply providing more conduits for recirculation of the same material over and over again. I believe we can do better in promoting the public interest than assuring the presentation of “.bonanza” at all hours of the day and night. During the Commission’s deliberation of this issue, I considered a possible moratorium on abandonment of the rule. This course seemed attractive at first glance because it would protect existing syndication contracts for a period of time. However, I could not reconcile my fundamental concern about the inequity of unbridled use of a product by some entity which neither produced it nor purchased its use. The Congress has recognized that the existing Copyright Law is flawed. As mentioned before, leading members of Congress who are most responsible for eliminating these flaws have asked the Commis- sion to postpone action on both syndicated exclusivity protection and unlimited signal carriage until the Congress and the Copyright Tribunal have more opportunity to deal with the problems. I fail to FCC. 2d 896 Federal Communications Commission Reports understand why—despite those reasonable entreaties—the majority felt constrained to move with such unseemly haste. Finally, I note that the television industry today is generally prospering quite admirably, and cable television continues to expand by leaps and bounds. Cable with all types of program and pay products available is now viable for major markets. It is a very desirable additional service to those consumers who can afford to pay a monthly fee. It is not a boon to the poor in the ghettos who must rely on a TV service free of additional financial requirements. I believe there is a vital public interest in both preserving a free TV service to the consumer and yet encouraging a diversified pay service to those who can afford a monthly fee. The viewing public today has the present advantage of program diversity in various forms with more options assured for the future. It seems to me that this Commission in its efforts to readjust public interest benefits must not take out of one and put into the other until the scales are completely unbalanced. In my opinion, the long-term public interest considerations in retaining syndicated exclusivity requirements are more persuasive than those elusive benefits proclaimed by the majority in the Report and Order. I dissent to adoption of the Report and Order. DIsSENTING STATEMENT OF COMMISSIONER ABBOTT WASHBURN Re: Distant SIGNAL AND SYNDICATED ProGrRam Exc.usivity RULES Instead of acting in today’s premature fashion to eliminate, posthaste, the distant signal and syndicated exclusivity rules, a more judicious approach on the part of the Commission would have been to conduct an oral argument before making final determination. The record of these proceedings is voluminous and the report itself, with accompa” ying appendices, exceeds 500 pages. Still, even after review- ing the record, questions persist which it would have been useful to have heard addressed by the parties before the Commission. An oral argument with give-and-take from the bench would also have given us helpful new insights into the issues. Now, in my view, is not the time for the Commission to be changing the ground rules under which the 1976 Copyright Act was drafted. Congressman Kastenmeier, Chairman of the Judiciary Subcommittee, has written us, saying: . completely separate and communications policy as the Copyright Act of 1976 is now written. Therefore, I would urge the Commission to delay taking any action which would disturb the delicate balance of copyright and communications policy until the Copyright Royalty Tribunal has been given an opportunity to carry out its 1980 review and Congress is in a position to respond, if necessary. It’s all very well to say, as the item does, that this is not our business— that we're not responsible, Congress is. But meanwhile there are busic 79 FCC. 2d CATV Syndicated Program Exclus. Rules 897 inequities here, inequities which some cable industry spokesmen themselves recognize. Cable is going through the revolving door on the other fellow’s push. We at the FCC, in my judgment, cannot just blind our eyes to these inequities—for they have a bearing on how the communications facilities are used “in the public interest,” and that’s our business under the 1934 Act. In May, at the National Cable Television Association convention, Congressman Van Deerlin, Chairman of the Subcommittee on Commu- nications, stated that the Copyright Tribunal is not working, and predicted that “sooner rather than later, Congress will have to revise copyright policy for the cable television industry.” So Congress is doing some re-thinking. The Royalty Tribunal has not had adequate opportunity to function, and to complete its first five- year review required by the Copyright Act. Chairman Kastenmeier, Senator Riegel, Congressman Dingle and other Members of the House and Senate have urgently requested us not to act precipitously. Is this a good time, therefore, to change the ground rules? No, it is a bad time; and I can see no real reason for our racing to such action. As Chairman Kastenmeier in his March 13 letter to Chairman Ferris on the proposal to deregulate cable said: “We did not contemplate such a sweeping —_' in the regulatory structure when we drafted Public Law 94 py NPE CEE Oe the studies upon which today’s action relies are not conclusive. For example, the item goes to great lengths to minimize the probable impact on TV stations of the elimination of syndicated exclusivity. But there is little evidence to support this contention in situations where cable penetration is 40 to 50% of TV households in a community. This cannot but have a serious diluting effect on the viewership of the local station. Many eyeballs will shift to the other signals. How many? No one knows. Yet the cable industry is predicting future market penetrations on this order of magnitude. Finally, I am very concerned by the action of the majority in deleting the exclusivity rules without providing a transition period for those who entered into contracts in good faith reliance on our rules. These parties will now be prejudiced through no fault of their own, a result which is unjust and unfair. Instead, I would have preferred to have provided for a reasonable period of time in which existing contracts, entered into in reliance on our rules, would have remained in effect. To this end, I offered an unsuccessful motion to include language in the Order that would have provided a grace period of up to three years for the orderly phasing out of existing contracts. This would also have given the Congress needed time in which to make necessary adjustments to the Copyright Act. In summary, I must dissent to this unnecessary and ill-timed deletion of the rules, an action which unfairly and immediately voids legal contracts made in good faith on the basis of our rules. FCC. a 898 Federal Communications Commission Reports Separate STATEMENT OF COMMISSIONER JosePH R. FOGARTY In Re: Report ND Orper N Dockets 20988 anp 21284 - CaBLe TELEVISION SYNDICATED EXCLUSIVITY AND SIGNAL CARRIAGE RuLes At the commencement of this rule making proceeding,' I stated that the Commission’s existing cable television rules and policies “assumed harm to the public interest before it materialized and placed a heavy burden of proof on new technology and additional services to show that they would not injure the status quo,” and that “this regulatory approach and policy has been misguided from the standpoint of economic reality, consumer welfare, and the larger public interest.” I further stated that “something more than mere conjecture or intuitive assumptions should be required before we impose regulatory con- straints and burdens on one industry or technology in favor of another,” and that “In an era of explosive technological innovation, the public interest is better served by regulatory deference to the marketplace and competitive forces until experience, rather than speculation, demonstrates the existence of problems or inadequacies.” The extensive record amassed in this proceeding only serves to confirm these fundamental observations. The deletion of these unnec- essary and counterproductive rules is firmly premised in the public interest and this action has my complete approval and support. SEPARATE STATEMENT OF COMMISSIONER TYRONE BROWN Re: Report AND ORDER IN THE MATTER OF CABLE TELEVISION SYNDICATED ProGrRam Excvusivity Ruves (Docket 20988) When we issued our Notice of Proposed Rulemaking in this proceeding I voted enthusiastically for our proposals because I saw no basis in communications policy for continuing the syndicated exclusivi- ty rules. The record in this proceeding has more than borne out my initial tentative conclusion. I also voted to include in our NPRM a proposal providing for a transition period to ameliorate any dislocations resulting from the deletion of our rules. Given the evidence in the record, I have concluded that such a transition period is unnecessary. The record indicates that of those cable systems subject to our rules, only 27 percent have been required to provide syndicated exclusivity protection. Other evidence demonstrates that even if all stations now entitled to program protection requested it, a maximum of 4.4 percent of all television households in the nation would be affected. This figure Separate Statement of Commissioner Joseph R. Fogarty, 71 FCC 2d 949-50 (1979). See — eee 79 FCC. 2d CATV Syndicated Program Exclus. Rules 899 would rise to only 9 percent under any reasonable projection of future cable development. In light of the minuscule impact that a change in our rules will cause, I see no need to provide for a transition period. These rules have restricted consumer choices long enough without countervailing public interest benefit. SEPARATE STATEMENT OF COMMISSIONER ANNE P. Jones In Re: Report AND On DER IN Dockets 20988 ND 21284-CasBLe TELEVISION SYNDICATED EXCLUusiviTY AND SIGNAL CARRIAGE RuLes I concur in the decision to eliminate these rules because I agree that the extensive record developed in these proceedings fails to show that they serve any valid public policy purpose. As well described in the Report and Order, the rules owe their existence to what now, with the benefit of hindsight, seems rather clearly to have been an exaggerated fear of the threat posed by cable television to television broadcasters and their ability to serve the public. The burden was therefore on those who would retain the rules to demonstrate the need or desirability fortheir retention in the public interest, and in my judgment this burden was not met. The reason my vote is a concurrence is that I do not fully agree with the heavy implication in the Report and Order that for some years into the future the threat of harm to broadcast television by cable is negligible. Whether this is true depends in large measure on whether cable remains what it has been: primarily a retransmission mechanism. To the extent, however, that cable begins to realize its great potential as a mechanism for providing diverse programming, as well as myriad other services, it may be that our estimates of a maximum 48% market penetration and 10% audience diversion nationwide will prove too modest. I do not intend by this caveat to imply that if cable begins to pose a more substantial and immediate threat than the record shows it does now the Commission should respond, either at all or in any particular way. I merely say that I believe cable’s threat to television broadcasting is more problematical than the language of the Report and Order seems to imply, although I fully agree that on the present — any such perceptible threat does not justify retention of these ru On the matter of retransmission consent, I wish to express my agreement with the conclusion in the Report and Order as to the effect of the 1976 amendments t» the Copyright Act. I have carefully considered the arguments oi NTIA and others and I continue to be troubled by the argument that the compensation required under the present statutory scheme by cablecasters to program owners is unreasonably low. I have concluded, however, that, Commission authority in this area has been preempted by the statutory compulsory 7 PCC. 2 900 Federal Communications Commission Reports licensing scheme and arguments concerning the adequacy of the compensation to program owners under that scheme should be directed to the Copyright Tribunal or to Congress—and not to this agency. 79 FCC. 2d Cincinnati University Board of Trustees 901 Application, Unacceptable FM Station, Limitations Inquiry By FCC Commission denies application to increase power and antenna height for noncommercial FM station. Proposed operation exceeds maximum allowed. Grant would restrict implementation of policy relating to improving the use of FM channels reserved for noncommercial educational stations. FCC 80-343 BEFORE THE FEDERAL COMMUNICATIONS COMMISSION Wasninoton, D.C. 20554 In Re Application of Cincinnati University for modification of | File No. BPED- construction permit 7T90601AJ The Board of Trustees of the University of Cincinnati c/o Mr. Al Hulsen, Director and General Manager Radio Station WGUC-FM 1223 Central Parkway Cincinnati, Ohio 45214 August 14, 1980 Gentlemen: This is in reference to your application, File No. BPED-790601AJ, to increase your effective radiated power (ERP) and antenna height above average terrain from 32 kW and 600 feet, respectively, to 100 kW and 880 feet. This proposal represents a major change pursuant to Section 1.573 of the rules as the area encompassed by your 1.0 mV/m contour would be increased by greater than 50 percent. Section 73.511(a) of the Rules effectively provides that commercial FM stations in the Cincinnati area will not be authorized to operate in excess of 50 kW ERP. This ensures the most efficient and equitable FM channel use. As you are aware, your proposal to operate with 100 kW ERP at a proposed transmitter site in Zone 2, exceeds the maximum of 50 kW allowed by Section 73.211 of the Rules. Authoriza- tion of your proposal is inconsistent with the 1968 general policy pronouncement of the Commission which bars such operation by noncommercial educational FM stations unless and until sanctioned by ing. See Moody Bible Institute of Chicago FCC 79-86, 45 RR 2d 190 (1979); Jowa State University of Science and Technology 13 FCC 2d 751 (1968), recon. den., 17 FCC 2d 496, 16 RR 2d 59 (1969). Moreover, the Commission is currently considering in Docket No. 20735 whether 79 FCC. 2d 902 Federal Communications Commission Reports certain maximum power limits should be imposed on noncommercial FM broadcast stations. Notice of Proposed Rule Making, FCC 76-240, released April 19, 1976; Further Notice of Proposed Rule Making, FCC 78-385, 68 FCC 2d 985 (1978). Thus, it appears that grant of your application would unnecessarily restrict the Commission’s inquiry in Docket No. 20735. Your engineering study alleges that special consideration should be afforded your application due to “unique coverage requirements in southwestern Ohio” and location of the proposed transmitter site in Zone 1 approximately 2 miles from the border of Zone 2 where a maximum of 100 kW is permissible under Section 73.211. Our rules limit the maximum power with which a station may operate so as to provide an orderly, efficient, and effective development of FM broadcast service. The Commission will not move the dividing lines defining appropriate power zones for the convenience of an applicant, even where proximity to the border of two zones is 2 miles. See Stereo Corporation 61 FCC 2d 76, 38 RR 2d 867 (1976). Further, longstanding Commission policy holds that the status of being a noncommercial FM operation is not, by itself, sufficient to justify exemption from our engineering standards. We have consistently held that emphasis must be placed upon the enduring allocation characteristics of a proposal rather than generally transitory programming.' See Stereo Corpora- tion, supra. Grant of your application at this time would result in “grandfathering” a “super-power” facility based solely on existing program content and would intolerably restrict Commission flexibility to ensure the most efficient service in the future to as many communities as possible. Accordingly,we conclude that a grant of the proposed application would not serve the public interest, convenience, and necessity. However, we will afford you thirty (30) days within which to modify your proposal to comply with Commission rules and policies. If such an amendment is not filed within the specified period, your application will be dismissed pursuant to Section 73.511(a). See Notice of Inquiry in Docket Nos. 14185 and 20735, supra; See also Jowa State U. ity, supra. By Direction OF THE COMMISSION, Wu J. Tricarico, Secretary. The thrust of these policies is underscored in the provisions of Section 73.511(a), a fact expressly recognized in your application. That rule states that applications in excess of the established power limits will not be granted as of right. Further, if rulemaking shows that the present power limits are inadequate, stations will be able to renew their requests for greater facilities. Jowa Sate, supra. 79 FCC. 2d Ed Noble For U.S. Senate Committee 908 Authority Delegated, Action On Political Broadcast, Program Time, Period Political Candidate, Federal Candidate, Reasonable Access Commission staff, through delegated authority, finds broadcaster’s refusal to sell five-minute prime time segments to federal candidate reasonable. The timing of candidate’s request, the number of potential similar requests, and the technical difficulty involved was significant in the determination. Delegate Authority 35087 BEFORE THE FEDERAL COMMUNICATIONS COMMISSION Wasnincton, D.C. 20554 In Re Complaint by Ed Noble for U.S. Senate Committee against Station KJRH, Tulsa, Oklahoma Con- cerning Political Broadcast The Ed Noble for U.S. Senate Committee c/o Rosner Communications 19252 Pebble Beach Place Northridge, California 91326 Attention: Mr. James Rosner August 20, 1980 Dear Mr. Rosner: This is in response to vour complaint filed on behalf of the Ed Noble for U.S. Senate Committee (hereinafter Committee) against television station KJRH, an NBC affiliate in Tulsa, Oklahoma. Mr. Noble is a candidate for the Republican nomination to the Senate in a primary election to be held August 26, 1980. By mailgram dated August 1, 1980, the Committee filed a complaint with the Commission alleging that KJRH refused to make available to the Committee any five-minute program segments. The Committee stated that it first contacted the station on July 25, 1980 with its request for five-minute availabilities for the three-week period preceding the primary election which begins Tuesday, August 5 and ends Monday, August 25. After receiving the complaint, we made an inquiry of the station through its attorney. Subsequently, KJRH relates, “in order to accommodate the candidate’s current request, [the station] .. . changed its policy . . and informed the Committee that it would 79 FCC. 2d 904 Federal Communications Commission Reports offer a limited number of five-minute programs to the Committee. The Committee accepted the offer of most of the times made available but continues to press, at this time, its request for “all day parts, including prime time.” On August 8, the Committee and counsel for KJRH filed comments with the Commission. On August 12, KJRH filed supple- mental comments which were primarily factual in nature. The following pertinent facts are not the subject of dispute. Station KJRH is one of three television stations in Tulsa, Oklahoma. The station’s policy, prior to this complaint, was “to provide reasonable access to candidates for federal elective office by affording half-hour or hour program time in prime and non-prime hours, as well as spots in prime and non- prime hours.“ The station does not sell five-minute program slots to commercial advertisers. The station has offered Mr. Noble and other candidates half-hour program time as well as spots in prime time and access times. The Noble Committee had purchased and the station was running a schedule of spots at the time that this complaint was filed.? For financial and political strategy reasons, according to the Committee, it has not produced a half-hour campaign advertisement.’ Prior to any contact with KJRH, the Committee produced a five- minute political program focusing on the candidate: “who he is, what he and his family have done for Oklahoma, his stands and in-depth understanding of world issues today, and why be is qualified to serve the people of Oklahoma as their United States Senator running for the U.S. House of Representatives. When the station offered five-minute programs, the Committee bought most of the availabilities. The Committee booked a total of nine five-minute segments to be broadcast at 12 midnight, Friday and The “reasonable access” law is found at 47 U.S.C. 312(a\7): Ed Noble For U.S. Senate Committee 905 Saturday nights, and on Sunday afternoons (2:55-3:00 p.m., August 10 and 24; 4:55-5:09 p.m. August 17) for the three weekends preceding the primary. The Committee notes that “sign on” and “sign off” were also offered to it but the offer was not The Committee argues that Sunday afternoon offerings are far inferior to prime time programming when measured by “total viewing audience reached.” The Committee writes that from a media strategy point of view, “reasonable access usually means reaching a large percentage of the total viewing audience with enough frequency to adequately reinforce their initial impressions.” The Committee con- tinues, “[i}n the case of Ed Noble’s five-minute program, frequency is not nearly so important a consideration as reach. The job of the five- minute program is to reach as many different viewers as possible at least once or twice in an effort to afford as many different people as possible an opportunity to judge Ed Noble’s . . . background, personal accomplishments, values and character.” The Committee asserts that “the only adequate way to achieve this kind of depth or unduplicated reach is in prime time, because it is in prime time that one finds the largest audiences available and many viewers watch only prime time television.” The Committee estimates that in the short time remaining before the primary, it would require four prime time programs as well as the time already booked in order to consider a station’s “reasonable access” obligations satisfied. The station responds that if five-minute programs were available in prime time, six of the nineteen Senatorial candidates have indicated that they would be interested in purchasing the time.“ The station writes, “KJRH would have to insert a total of 28 five-minute programs in prime time.” For its part, KJRH argues that it has afforded “reasonable” access to the Committee, “[i}t has accommodated his request for five-minute programs where the time has been available withcut serious impact on service to the public through the schedule disruption that would occur . . if extended to prime time and prime time access.” The station points out that the Committee made its request late in the campaign; it has offered to preempt programming for a 30-minute program but ſiſt is not willing to disrupt and fractionalize its schedule by selling 5- minute programs in those periods which are now divided into 30- minute segments”; and “the potential for substantial disruption” exists if other Senate candidates request comparable amounts of time. In addition, KJRH describes the “serious technical problems” involved in providing a five-minute segment to a political candidate: Delaying network programming, for five minutes is not technically feasible. KJRH In addition to the six candidates who expressed interest in five-minute time blocks, KJRH reports that five candidates were not interested and eight candidates could not be located. 5 See Footnote 4, supra and accompanying text. FCC. 2 906 Federal Communications Commission Reports way for the station to handle a five-minute delay in the manner because the tape is run at 15 inches per second and five minutes of attempted looping would result in several hundred feet of tape on the floor. [An alternative rewinding and rescuing in the next 2 minutes to get the first tape on the air and c easible. The station contends that in order to accommodate a five-minute program, it would have to “(1) cut a consecutive five minutes out of the body of the program at the beginning or at a break or, (2) drop the entire scheduled network program and fill in the remaining 25 minutes with filler programming. KJRH has no such programming suitable for prime time.” In order to insert a five-minute program in access programming, the station would have to cut five minutes from the regular program or cut all commercials from a half-hour segment. KJRH reports that political spots have been scheduled in the access periods between now and the election and these spots cannot be deleted. KJRH argues that “excessive production costs” cited by the Committee could be decreased by having the candidate appear live. The licensee also compares the rates for thirty-minute program time with rates for five minutes and concludes that they “compare favorably.“ Station KJRH rests its stand firmly on Commission precedent (Honorable Donald W. Riegle, 59 FCC 2d 1314 (1976)) and argues that no subsequent rulings or opinions have altered the outcome of that case. In Riegle, a candidate for the Democratic nomination for Senator from Michigan sought to buy five-minute prime time program times on WKZO-TV in Kalamazoo. The station offered to sell five-minute program slots only on Saturday and Sunday afternoons, although they made available half-hour programs in prime time as well as spots in prime time. The candidate asserted that in order to introduce himself to voters statewide, he needed to broadcast a series of five-minute programs in prime time, and he could not afford to purchase and thirty-minute programs for use on that station. The station replied that the broadcast of five-minute programs in prime time would severely disrupt its scheduling and it contested the financial and strategic disadvantages alleged by the candidate. In short, the station insisted that its sales policies did constitute reasonable access for *A thirty-minute prime time program costs $1,200; five minutes costs $900. A 30- second spot costs $400. In the access period, the rate for a thirty-minute program is $1,000 and for a five-minute program, $750. The Committee pays $450 for each five- minute program on Sunday afternoons, and $150 for the weekend late night bookings. FCC. 2d Ed Noble For U.S. Senate Committee 907 The Commission held in that case that the station’s policies were not unreasonable. Noting that the station had offered both program times and spot announcements in prime and access times, as well as five- minute programs at other times, the Commission wrote to the candidate, [wle respect your belief that the opportunitics which the licensee offers you are not best suited to your planned campaign, but it does not appear that they can be considered unreasonable under Commission precedent and the facts of this case.” We are not persuaded by station KJRH’s reliance on Riegle, or its claim that no subsequent rulings or opinions have altered the outcome of that case. Actually, in the years since 1976, the Commission has substantially elaborated on its interpretation of Section 312(a)7). Although in 197 [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385008_0361%3A2. Public record. Not legal advice.