[Federal Register Volume 61, Number 112 (Monday, June 10, 1996)]
[Rules and Regulations]
[Pages 29312-29314]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14571]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 76
[CS Docket No. 95-178; FCC 96-197]
Definition of Markets for Purposes of the Cable Television Must-
Carry Rules
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: The Commission amends its rules to continue to use Arbitron's
1991-1992 ``Area of Dominant Influence'' (``ADI'') market list for
determining local markets for the must-carry/retransmission consent
election that must be made by commercial broadcast television stations
by October 1, 1996. The Commission will switch to Nielsen's
``Designated Market Area'' (``DMA'') list beginning with the 1999
election, and will use updated Nielsen market lists for subsequent
elections. The Commission's previously established procedures to
determine local television markets for signal carriage purposes assumed
that Arbitron would continue to publish market designations and that
updated ADI market lists would be available for each triennial must-
carry/retransmission consent election. However, Arbitron has ceased
publication of its ADI market list and it is now necessary for the
Commission to adopt a revised mechanism for determining local markets
for signal carriage purposes. By postponing the change to market
designation procedures until the 1999 election, the Commission and
affected parties will have an opportunity to consider transitional
mechanisms to facilitate the switch from one market designation to
another. The Further Notice of Proposed Rulemaking segment of this
decision is summarized elsewhere in this issue of the Federal Register.
EFFECTIVE DATE: July 10, 1996.
FOR FURTHER INFORMATION, CONTACT: Marcia Glauberman or John Adams,
Cable Services Bureau, (202) 418-7200.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's
Report and Order, CS Docket No. 95-178, FCC 96-197, adopted April 25,
1996, and released May 24, 1996. The full text of this decision is
available for inspection and copying during normal business hours in
the FCC Reference Center (room 239), 1919 M Street, NW., Washington, DC
20554, and may be purchased from the Commission's copy contractor,
International Transcription Service, (202) 857-3800, 1919 M Street,
NW., Washington, DC 20554.
Synopsis of the Report and Order
1. The Report and Order amends Sec. 76.55(e) of the rules, 47 CFR
76.55(e), to continue to use Arbitron Ratings Company's 1991-1992
Television ADI Market Guide as the source of local market designations
for signal carriage purposes for the must-carry/retransmission consent
election that must take place by October 1, 1996, and will become
effective on January 1, 1997. The rule also is amended to use Nielsen
Media Research's DMA Market and Demographic Rank Report to determine
markets beginning with the 1999 election, which becomes effective
January 1, 2000.
2. Under the signal carriage provisions added to the Communications
Act (``Act'') by the Cable Television Consumer Protection and
Competition Act of 1992 (``1992 Cable Act''), commercial broadcast
television stations are permitted to elect once every three years
whether they will be carried by cable systems in their local markets
pursuant to the must-carry or retransmission consent rules. Section 614
of the Act, 47 U.S.C. 534, provides that a station electing must-carry
status is entitled to insist on carriage of its signal. A station
electing retransmission consent as set forth in Section 325 of the Act,
47 U.S.C. 325 negotiates a carriage agreement with each cable operator
and may be compensated for its station's carriage. The next election
must be made by October 1, 1996, and will become effective on January
1, 1997.
3. For purposes of these carriage rights, a station is considered
local on all cable systems located in the same television market as the
station. As enacted in 1992, section 614(h)(1)(C) of the Act required,
through a cross-reference to a Commission rule dealing with broadcast
ownership issues, that a station's market shall be determined using the
Arbitron Ratings Company's ``areas of dominant influence'' or ``ADI.''
The rules adopted in 1993 to implement these signal carriage provisions
established a mechanism for determining a station's local market for
each must-carry/retransmission consent cycle based on ADI market lists.
For the initial election in 1993, Arbitron's 1991-1992 Television ADI
Market Guide was used to define local markets and for each subsequent
election cycle an updated ADI market list was to be used. For example,
the rule specified that Arbitron's 1994-1995 ADI list would be used for
the 1996 election.
4. However, since we established these procedures, Arbitron left
the television research business and the market list specified in the
rules for this year's election is unavailable. Congress recognized that
Arbitron no longer publishes television market lists and the
Telecommunications Act of 1996 (``1996 Act''), Pub. L. 104-104, 110
Stat. 56 (1996), amended the definition of local market that referenced
ADIs. Specifically, section 614(h)(1)(C) of the Act was amended by
Section 301 of the 1996 Act to provide that for purposes of applying
the mandatory carriage provisions, a broadcasting 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 * * *.''
5. In addition, section 614(h) of the Act requires the Commission
to consider petitions for market modifications to add communities to or
exclude communities from a station's local market based on historical
carriage, signal coverage, local service, and viewing patterns. The
1996 Act modified this provision to require the Commission to act on
all petitions for market modifications within 120 days.
6. Prior to the 1996 Act, but consistent with its amended
definition of local market, we issued the Notice of Proposed Rulemaking
(``NPRM'') in this proceeding, summarized at 61 FR 1888 (January 24,
1996), seeking comment on three proposals for revising the mechanism
for determining local markets. First, the Commission could substitute
Nielsen Media Research's ``designated market areas'' or ``DMAs''
[[Page 29313]]
for Arbitron's ADIs. While similar in many ways, the differences
between DMA and ADI market areas could result in a change in the area
in which a station can insist on carriage rights and a change in the
stations that a cable system is required to carry. The second option
would be to continue to use Arbitron's 1991-1992 Television ADI Market
Guide to define market areas, subject to individual review and
refinement through the section 614(h) process. Under this option, the
local market definition would remain unchanged, subject only to future
individual market modifications. A third proposal would be to retain
the existing market definitions for the 1996 election period and switch
to a Nielsen based standard for subsequent elections.
7. The Commission concludes that Nielsen's DMA market assignments
provide the most accurate method for determining the areas served by
local stations. DMAs have become the television market standard for
commercial purposes in the absence of any alternative and represent the
actual market areas in which broadcasters acquire programming and sell
advertising. Moreover, in general, we continue to believe that our 1993
decision to use updated market designations for each election cycle to
account for changing markets is appropriate. Nielsen also provides the
only generally recognized source for information on television markets
that would permit us to use updated market designations for each
election cycle to account for changing markets, consistent with our
1993 decision.
8. However, from the data provided in the record, it is clear that
a greater number of stations, cable systems, and cable subscribers
would be affected by a switch to DMAs than would be affected by simply
using an updated ADI market list, as the rules had contemplated. In
particular, we are concerned about the impact of changing the market
definition in certain types of situations, such as cases where the
differences in methodology and procedures between Arbitron and Nielsen
result in significant changes in market areas. In addition, the
statements of costs and burdens put forth by cable operators do not
provide a means to determine whether there are potential problems
associated with a change in definition that could be ameliorated in
some manner through transitional procedures. Further, while some cable
subscribers will be affected by changing signal carriage requirements
resulting from a switch to a DMA standard, there may be ways to
minimize the disruptions to their service.
9. The Commission also is concerned about the impact of changing
the market definition on the section 614(h) market modification
decisions already in force. It is unclear whether cable operators could
face conflicting obligations based on a revised market standard when
these modifications are considered in conjunction with a new market
definition. In addition, without extensive evidence, we are unable to
determine the burden on the Commission to remedy such conflicts that
might result from an immediate switch to DMAs.
10. Thus, the Commission decides to continue to use the 1991-1992
ADI market list for the 1996 election and to establish a framework that
uses updated DMA market lists for the 1999 and subsequent elections. In
addition, the home county exception is retained in order to ensure that
a station is carried in its home county in the limited instances where
the station is assigned to an ADI market by Arbitron or a DMA market by
Nielsen that is not the same as its home county's market. For the time-
being, the Commission also will rely on market modifications determined
pursuant to Section 614(h) to refine market boundaries to account for
changes in viewing patterns and market conditions.
Final Regulatory Flexibility Analysis
11. Pursuant to the Regulatory Flexibility Act of 1980, 5 U.S.C.
601-12, the Commission's final analysis with respect to the Report and
Order is as follows:
12. Need and Purpose of this Action: This action is necessary
because the procedure for determining local television markets for
signal carriage purposes relies on a market list no longer published by
the Arbitron Ratings Company.
13. Summary of Issues Raised by the Public in Response to the
Initial Regulatory Flexibility Analysis: There were no comments
submitted in response to the Initial Regulatory Flexibility Analysis.
14. Significant Alternatives Considered and Rejected. The
Commission proposed three alternatives in its NPRM and comments were
submitted that addressed the administrative burdens of each
alternative. In order to minimize the administrative burdens on
broadcasters and cable operators, the decision contained herein retains
the existing market definitions and the existing market modification
process for the 1996 must-carry/retransmission consent election cycle.
This decision postpones a change in market definition from Arbitron's
ADI to Nielsen's DMA until the 1999 election in order to provide an
opportunity for the Commission and affected parties to consider
transitional mechanisms that could minimize the effects of changing
market definitions on broadcasters and cable operators, including small
business entities.
Ordering Clauses
15. Accordingly, it is ordered that, pursuant to sections 4(i),
4(j) and 614 of the Communications Act of 1934, as amended, 47 U.S.C.
154(i), 154(j) and 534, and section 301 of the Telecommunications Act
of 1996, Pub. L. 104-104 (1996), Part 76 is amended as set forth below,
July 10, 1996.
16. It is further ordered that, the Secretary shall send a copy of
the Report and Order, including the Regulatory Flexibility Analysis, to
the Chief Counsel for Advocacy of the Small Business Administration in
accordance with paragraph 603(a) of the Regulatory Flexibility Act.
Pub. L. 96-354, 94 Stat. 1164, 5 U.S.C. 601 et seq. (1981).
List of Subjects in 47 CFR Part 76
Cable television.
Federal Communications Commission
William F. Caton,
Acting Secretary.
Rule Changes
Part 76 of Chapter I of Title 47 of the Code of Federal Regulations
is amended as follows:
PART 76--CABLE TELEVISION SERVICE
1. The authority citation for Part 76 continues to read as follows:
Authority: 47 U.S.C. 151, 152, 153, 154, 301, 302, 303, 303a,
307, 308, 309, 312, 315, 317, 325, 503, 521, 522, 531, 532, 533,
534, 535, 536, 537, 543, 544, 544a, 545, 548, 552, 554, 556, 558,
560, 561, 571, 572, 573.
2. Section 76.55 is amended by revising paragraph (e) to read as
follows:
Sec. 76.55 Definitions applicable to the must-carry rules.
* * * * *
(e) Television market. (1) Until January 1, 2000, a commercial
broadcast television station's market, unless amended pursuant to
Sec. 76.59, shall be defined as its Area of Dominant Influence (ADI) as
determined by Arbitron and published in the Arbitron 1991-1992
Television ADI Market Guide, as noted below, except that for areas
outside the contiguous 48 states, the market of a station shall be
defined using Nielsen's Designated Market Area (DMA), where applicable,
as published in the Nielsen 1991-92 DMA Market
[[Page 29314]]
and Demographic Rank Report, and that Puerto Rico, the U.S. Virgin
Islands, and Guam will each be considered a single market.
(2) Effective January 1, 2000, a commercial broadcast television
station's market, unless amended pursuant to Sec. 76.59, shall be
defined as its Designated Market Area (DMA) as determined by Nielsen
Media Research and published in its DMA Market and Demographic Rank
Report or any successor publication, as noted below.
(3) A cable system's television market(s) shall be the one or more
ADI markets in which the communities it serves are located until
January 1, 2000, and the one or more DMA markets in which the
communities it serves are located thereafter.
(4) In addition, the county in which a station's community of
license is located will be considered within its market.
Note to paragraph (e): For the 1996 must-carry/retransimission
consent election, the ADI assignments specified in the 1991-1992
Television ADI Market Guide, available from the Arbitron Ratings
Co., 9705 Patuxent Woods Drive, Columbia, MD, will apply. For the
1999 election, which becomes effective on January 1, 2000, DMA
assignments specified in the 1997-98 DMA Market and Demographic Rank
Report, available from Nielsen Media Research, 299 Park Avenue, New
York, NY, shall be used. The applicable DMA list for the 2002
election will be the 2000-2001 list, etc.
* * * * *
[FR Doc. 96-14571 Filed 6-7-96; 8:45 am]
BILLING CODE 6712-01-P