Before the

Federal Communications Commission

Washington, D.C. 20554

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| In the Matter of:                | * | CSR-5358-M                   |
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| SAH Acquisition Corporation II   | ) |                              |
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| Charter Communications           | * |                              |
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| Request for Mandatory Carriage   | ) |                              |
| of Television                    | * |                              |
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| Station KCNS-TV, San Francisco,  |   |                              |
| California                       | * |                              |
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MEMORANDUM OPINION AND ORDER

**Adopted: December 15, 2000** **Released: December 19, 2000**

By the Chief, Consumer Protection and Competition Division, Cable
Services Bureau:

# introduction

1.  SAH Acquisition Corporation II ("SAH"), licensee of television
    broadcast station KCNS-TV, San Francisco, California ("KCNS" or "the
    Station"), has filed a must carry complaint claiming that Charter
    Communications ("Charter")[^1] has failed to commence carriage of
    KCNS on its system serving Gilroy, California and the surrounding
    areas ("cable communities").[^2] Charter filed an Opposition. On
    March 24, 2000, SAH filed an untimely Reply to Charter's Opposition,
    which we will accept.[^3]

# Background

2.  Section 614(h)(1)(C) of the Communications Act, as amended by the
    Telecommunications Act of 1996, provides that a station's market
    shall be determined by the Commission by regulation or order, using,
    where available, commercial publications which delineate television
    markets based on viewing patterns.[^4] Until January 1, 2000,
    Section 76.55(e) of the Commission's rules provided that Arbitron's
    "Areas of Dominant Influence," or ADIs, published in the "*1991-1992
    Television Market Guide*," be used to implement the mandatory
    carriage rules. Effective January 1, 2000, however, Section 76.55(e)
    requires that a commercial broadcast television station's market be
    defined using Nielsen Media Research's Designated Market Areas
    ("DMAs"). For the must carry/retransmission consent elections that
    took place on October 1, 1999, commercial television stations were
    required to make their elections based on DMAs.[^5]

# discussion

3.  SAH maintains that KCNS is entitled to mandatory carriage on the
    Gilroy, California cable system because the Station is a qualified
    local commercial station as defined under the Commission's must
    carry rules.[^6] SAH explains that KCNS is licensed to San
    Francisco, California, which is in the San Francisco-Oakland-San
    Jose DMA. SAH states that Charter operates a cable television system
    serving Gilroy and the surrounding areas, which are also within the
    San Francisco-Oakland-San Jose DMA.[^7] SAH also contends that
    because KCNS is located within the same DMA as Gilroy, it is
    entitled to mandatory carriage on that system.[^8]

4.  In support of its request, SAH states that by letter dated October
    5, 1998, it informed Charter that SAH was the new licensee of KCNS
    and requested mandatory carriage on the Gilroy system.[^9] SAH notes
    that in the same letter, it indicated to Charter that the Station
    was prepared to provide the necessary equipment to deliver a good
    quality signal to Charter's Gilroy headend.[^10] SAH claims that
    Charter did not respond to the October 5^th^ letter in violation of
    Section 76.62(a)(2) of the Commission's rules, which requires cable
    operators to respond within 30 days of such requests.[^11] According
    to SAH, on November 11, 1998, it sent a second letter to Charter
    asking for its reasonable cooperation in measuring the Station's
    signal strength for carriage.[^12] SAH asserts that on November 17,
    1998, Charter denied mandatory carriage rights to KCNS because the
    Gilroy system had already met its maximum complement of one-third of
    its activated channels for broadcast television signals.[^13]

5.  In opposition, Charter notes that the Gilroy system is an integrated
    system straddling two DMAs-- the San Francisco-Oakland-San Jose DMA
    and the Monterey-Salinas DMA. Charter argues that as a result, the
    Gilroy headend cannot carry KCNS as SAH requests because the system
    cannot technically segregate channels between portions of the San
    Francisco-Oakland-San Jose DMA and those from the Monterey-Salinas
    DMA.[^14] In support, Charter cites *Pacific FM, Inc. San Francisco,
    California* ("*Pacific FM*")[^15] and *Paxson San Jose License, Inc.
    vs. Falcon Cable* ("*Paxson San Jose*"),[^16] where two other
    commercial television broadcast stations sought carriage on the
    Gilroy system. Charter points out that in those cases, the Cable
    Services Bureau (the "Bureau") denied mandatory carriage rights to
    the petitioners, after it determined that the Gilroy system was an
    integrated system. Charter notes further that the Bureau also found
    that the Gilroy system was already carrying sufficient local
    commercial television broadcast stations to meet the requirements of
    Section 614(b)(1)(B) and, therefore, had reached its quota of must
    carry signals.[^17] Charter argues that as a result of the Bureau's
    findings, which were made after examining essentially the same facts
    as in this case, the instant complaint should be dismissed.[^18]
    Finally, Charter states that, in the future, when its system upgrade
    is completed, carriage of KCNS may be feasible.[^19]

6.  SAH in reply contends that it has come into possession of new
    information that indicates that the Gilroy system is now capable of
    segregating the KCNS signal and keeping it solely within the San
    Francisco-Oakland-San Jose DMA without straddling the
    Monterey-Salinas DMA.[^20] SAH maintains that KCNS's Chief Engineer,
    during a visit to the Gilroy headend microwave transmit site,
    personally observed that Charter has made significant changes to the
    signal distribution system at that headend.[^21] The Chief Engineer
    notes that four separate microwave feeds that allowed the system to
    relay separate signals to the cable communities in question. He also
    relates that the headend's Head Technician confirmed that the
    microwave feeds "were relaying signals separately to the communities
    of Gilroy, Morgan Hill, Hollister and Spring Hill."[^22]

7.  SAH maintains that the Gilroy headend can add the KCNS signal to its
    list of must carry stations because despite Charter's assertions
    concerning meeting the statutory carriage of one-third its activated
    channels, Charter Gilroy's channel line-up indicates otherwise.[^23]
    SAH contends that while the Gilroy system has 35 activated channels,
    it is no longer obligated to carry 4 of the 13 must carry stations
    it carries because they are now out-of-market, non-must carry
    stations.[^24] SAH argues that, as a result, Charter cannot include
    those four stations as part of its mandatory statutory one-third
    limit of must carry stations the Gilroy system is required to
    carry.[^25] SAH states that the Chief Engineer also observed
    "thirty-two (32) separate microwave transmitters that process and
    feed separate signal complements to the four separate microwave
    dishes."[^26] Based on these observations, SAH asserts that Gilroy
    is no longer a technically integrated system, unable to segregate
    television broadcast signals between the two DMAs. Rather, SAH
    maintains that the Gilroy system can now filter out signals from and
    between the two DMAs, allowing carriage of the KCNS signal in the
    San Francisco-Oakland-San Jose DMA cable communities, but not in
    those in the Monterey-Salinas DMA.[^27] Based on this information,
    SAH requests that Charter be ordered to start carrying the KCNS
    signal on channel 38, or a channel mutually agreeable to both
    parties, on the Gilroy and Morgan Hill cable systems.[^28] Finally,
    SAH asserts that signal measurements taken with permission from
    Charter during the visit to the Gilroy site, revealed a reading of
    +27.4dBmv, which, according to SAH, shows that KCNS delivers a good
    quality signal to the Charter headend in question.[^29]

8.  We grant SAH's complaint. We find that SAH's undisputed
    representations demonstrate that KCNS is a local full power
    commercial television station qualified for carriage on Charter's
    cable system serving Gilroy, California and the cable communities in
    the San Francisco-Oakland-San Jose DMA portion of the system. Under
    the Commission's must carry rules, cable operators have the burden
    of showing that a commercial station located in the same television
    market as a cable operator is not entitled to carriage.[^30] Charter
    has presented no evidence that KCNS is not entitled to carriage on
    its Gilroy system. Furthermore, SAH claims that KCNS delivers a good
    quality signal to Charter's Gilroy headend as shown by the signal
    strength readings it presented. In any event, KCNS has made a
    commitment to acquire and install all the necessary equipment needed
    to provide Charter with a good quality signal.[^31]

9.  Charter's reliance on *Paxson San Jose* and *Pacific FM* is
    misplaced because the facts concerning the Gilroy system appear to
    have changed since the time that those two *Orders* were released.
    Based on the undisputed information SAH submitted, it appears that
    the Gilroy system is no longer technically incapable of segregating
    the over-the-air signals it receives from local television stations
    and distribute them to cable communities solely within the DMA the
    stations belong to. Also, because the system is now non-integrated,
    Charter's reliance on the Bureau's determination that the Gilroy
    system is not required to carry any additional local stations
    entitled to mandatory carriage is also misplaced. In *Paxson San
    Jose*, the Bureau stated that "\[a\] cable system, like Falcon's,
    that operates in more than one ADI may segregate its signal to
    ensure that only local signals are carried by the system in their
    proper \[DMAs\], but is not required to do so if its not technically
    feasible."[^32] Now that the Gilroy system apparently is technically
    capable of filtering out television broadcast signals between DMAs,
    Charter cannot include local and out-of-market stations to satisfy
    the statutory one-third channel capacity requirement for each DMA.
    In that regard, the Commission has stated that "if the cable
    operator is technically capable of segregating the channels provided
    to each community served, it may select, for must-carry purposes,
    from among those qualified commercial stations that are in the
    \[DMA\] in which each particular community is located."[^33]
    Charter's Gilroy, California channel line-up shows that the system
    is carrying four stations from the Monterey-Salinas DMA. Because of
    the material changes in the nature of the cable system, those four
    stations are no longer considered local stations for must carry
    purposes in the portion of the system serving the San
    Francisco-Oakland-San Jose DMA. The four stations are located in San
    Benito and Monterey counties, which are in the Monterey-Salinas DMA.
    In the *Must Carry Order*, the Commission has stated that "each
    broadcast television station will be considered local in those
    counties listed in the same \[DMA\] to which it is assigned."[^34]

10. Finally, concerning SAH's channel positioning request for KCNS, we
    find that it has properly requested carriage on channel 38 on
    Charter's cable system, the same channel number on which it is
    broadcast over-the-air. Under the Commission's rules, cable
    operators must comply with the channel positioning requirements
    absent a compelling technical reason.[^35]

# ordering clauses

11. Accordingly, **IT IS ORDERED**, pursuant to Section 614 of the
    Telecommunications Act of 1934, as amended (47 U.S.C. § 534), that
    the complaint filed by SAH Acquisition Corporation II **IS
    GRANTED**. Charter Communications **IS ORDERED** to commence
    carriage of television station

    KCNS-TV on channel 38 of its Gilroy, California headend microwave
    transmit site serving the City of Gilroy (CA0101), Santa Clara
    County (CA0103) and City of Morgan Hill (CA0184), within sixty (60)
    days from the date of this *Order*.

12. This action is taken pursuant to authority delegated under Section
    0.321 of the Commission's rules.[^36]

    FEDERAL COMMUNICATIONS COMMISSION

    Deborah E. Klein, Chief

    Consumer Protection and Competition Division

    Cable Services Bureau

[^1]: This Complaint was initially filed against Falcon Communications
    Corporation. Since then, the cable system in question was sold to
    Charter Communications. Reply at 2. Therefore, Falcon's name will be
    substituted with Charter's, its successor-in-interest.

[^2]: According to SAH, Charter's Gilroy system serves the following
    communities: City of Gilroy (CA0101), Santa Clara County (CA0103),
    and City of Morgan Hill (CA0184), in Santa Clara County, California;
    Hollister (area)(CA0102), San Benito (area)(CA0721), and City of San
    Juan Bautista (CA0812), in San Benito County, California; and Oak
    Hills (area)(CA0622), La Mesa Village (CA0745), Rancho Tierra Grande
    (area)(CA0844), Prunedale (area)(CA0890), Las Lomas/Pajaro
    (area)(CA1013), Carmel Highlands (area)(CA1048), Laguna Seca
    (area)(CA1049), Aromas (area)(CA1118), Monterey County (N)(CA1189),
    Castroville (area)(CA1190), Monterey County (CA1287), and Elkhorne
    (area)(CA1386), in Monterey County, California. Complaint at Exhibit
    1.

[^3]: The ongoing upgrade of the Gilroy system, which Charter mentions
    in its Opposition, appears to have been completed during the
    pendency of this proceeding. After the upgrade was completed, SAH
    filed a reply when it came into possession of new information
    regarding the Gilroy system. Section 1.65 of the Commission's rules
    requires applicants to furnish additional information to the
    Commission if and when it becomes available. 47 C.F.R. § 1.65.
    Accordingly, we will accept SAH's filing.

[^4]: *See* 47 U.S.C. § 534(h)(1)(C).

[^5]: *See Definition of Markets for Purposes of the Cable Television
    Broadcast Signal Carriage Rules*, Order on Reconsideration and
    Second Report and Order, 14 FCC Rcd 8366 (1999)("*Modification Final
    Report and Order*").

[^6]: Complaint at 4.

[^7]: *Id*.

[^8]: *Id*. at 5.

[^9]: *Id*. at 1-2.

[^10]: *Id*. at 2 and 5; Exhibit 3.

[^11]: 47 C.F.R. § 76.62(a)(2).

[^12]: Complaint at 2.

[^13]: *Id*. at 3.

[^14]: Opposition at 3.

[^15]: 10 FCC Rcd 3479 (1995).

[^16]: 11 FCC Rcd 6915 (1996).

[^17]: Opposition at 2.

[^18]: *Id*. at 1-2.

[^19]: *Id*. at 4.

[^20]: Reply at 1-3.

[^21]: *Id*. at 1 and Exhibit 1.

[^22]: *Id*.

[^23]: Reply at 2.

[^24]: *Id*. SAH notes that television stations KION, KSBW, KCBA and
    KSMS are licensed to communities in the Monterey-Salinas DMA. Reply,
    Exhibits 3 and 4.

[^25]: Reply at 3.

[^26]: *Id*. at 4.

[^27]: *Id*.

[^28]: *Id*.

[^29]: *Id*. and Exhibit 1. Section 76.55(c)(3) of the Commission's
    rules provides that an UHF television broadcast station, able to
    deliver a signal level of --45dBm to a cable system's principal
    headend, is entitled to mandatory carriage on that system. 47 C.F.R.
    § 76.55(c)(3). The +27.4dBmv reading equals --21.35dBm. *See
    Implementation of the Cable Television Consumer Protection and
    Competition Act of 1992*, Broadcast Signal Carriage Issues ("*Must
    Carry Order*"), 8 FCC Rcd 2065, 2989 (1993).

[^30]: *See Id*. at 2990.

[^31]: Pursuant to the Commission's rules, a station's failure to
    provide the requisite over-the-air signal quality to a cable
    system's principal headend will not foreclose its carriage if the
    station, at its own expense, provides a cable operator with
    specialized equipment to improve the station's signal to an
    acceptable quality at the cable system's principal headend. *Id*. at
    2991. *See* also 47 U.S.C. § 534(h)(1)(B)(iii).

[^32]: 11 FCC Rcd at 6917.

[^33]: *Must Carry Order*, 8 FCC Rcd at 2975-76.

[^34]: 8 FCC Rcd at 2975.

[^35]: 47 C.F.R. § 76.57; *See Must Carry Order*, 8 FCC Rcd at 2988.

[^36]: 47 C.F.R. § 0.321.