F.C.C. 69-867 BEFORE THE FEDERAL COMMUNICATIONS COMMISSION In Re WASHINGTON, D.C. 20554 CEASE AND DESIST ORDER TO BE DIRECTED Docket No. 18630 ORDER TO SHOW CAUSE (Adopted August 13, 1969) BY THE COMMISSION: COMMISSIONER BARTLEY DISSENTING; COMMISSIONER COX CONCURRING IN THE RESULT. 1. Kar-Mel CATV Systems, Inc., owns and operates a CATV system at Mount Carmel, Pa., which provides its subscribers with the following television signals: WVIA-TV (educational), WNEP-TV (ABC), and WDAŬ-TV (CBS), Scranton, Pa.: WBRE-TV (NBC), Wilkes-Barre, Pa.; WLVT-TV (educational), Allentown, Pa.: WHP-TV (CBS), and WTPA (ABC), Harrisburg, Pa.; WLYH-TV (CBS), Lebanon, Pa.; WGAL-TV (NBC), Lancaster, Pa.; KYW-TV (NBC), WCAU-TV (CBS), WFIL-TV (ABC), WPHL-TV (NBC and ABC on per program basis), Philadelphia, Pa.: WHYY-TV (educational), Wilmington, Del.; and WMARTV (CBS), Baltimore, Md. Mount Carmel is within the predicted grade A or better contours of stations WBRE-TV, WNEP-TV, and WVIA-TV, and within the predicted grade B contours of WLYHTV, WDAÚ-TV, WGAL-TV, and WTPA. 2. On September 25, 1968, WBRE-TV, Inc., licensee of station WBRE-TV, Wilkes-Barre, Pa., filed a petition asking that an order be issued requiring Kar-Mel CATV Systems, Inc., to show cause why it should not be directed to cease and desist from operating its system in violation of section 74.1103 (e) of the Commission's rules. This petition was supported by Taft Broadcasting Co., licensee of station WNEP-TV, Scranton, Pa., and by Stephen P. Jepko, owner and operator of the Jepko Community CATV system at Mount Carmel, Pa., and was opposed by Kar-Mel. 3. In opposition to WBRE-TV's petition, Kar-Mel does not deny that it is not complying with the program exclusivity requirement but argues that its competitor, Jepko, is not complying with the rules and that imposition of the exclusivity requirement on it and not on Jepko would be unfair and destructive to it. we are 4. It is unnecessary to rule on Kar-Mel's argument because w issuing an order denying Jepko's request for waiver of section 1 1 See F.C.C. 69-866, adopted this date. 18 F.C.C. 2d 74.1103(e) of the rules and directing it to comply with section 74.1103 of the rules. We will therefore issue the requested order to show cause. We note that the hearing may be avoided by Kar-Mel reporting its compliance with the program exclusivity requirement to the hearing examiner when one is designated. 5. The public interest requires that the hearing process be conducted as expeditiously as possible. The examiner is so directed and shall issue his initial decision as promptly as possible after the conclusion of the hearing. Further, pursuant to section 0.365 of the rules, any review of the initial decision shall be by the Commission rather than the Review Board. Accordingly, It is ordered, That pursuant to section 312 (b) and (c) and 409(a) of the Communications Act of 1934, as amended, 47 U.S.C. 312 (b) and (c) and 409 (a), Kar-Mel CATV Systems, Inc. Is directed to show cause why it should not be ordered to cease and desist from further violation of section 74.1103 (e) of the Commission's rules and regulations on its CATV system at Mount Carmel, Pa. It is further ordered, That Kar-Mel CATV Systems, Inc., Is directed to appear and give evidence with respect to the matters described above at a hearing to be held at Washington, D.C., at a time and place before an examiner, to be specified by subsequent order, unless the hearing is waived in which event a written statement may be submitted. It is further ordered, That WBRE-TV, Inc., Taft Broadcasting Co., Stephen P. Jepko, and Chief, Broadcast Bureau, Are made parties to this proceeding. It is further ordered, That the examiner shall conduct the hearing expeditiously and issue an initial decision as promptly as possible, in accordance with paragraph 5 above. It is further ordered. That the Secretary of the Commission shall send copies of this order by certified mail to Kar-Mel CATV Systems, Inc. FEDERAL COMMUNICATIONS COMMISSION, 18 F.C.C. 2d F.C.C. 69-614 BEFORE THE FEDERAL COMMUNICATIONS COMMISSION WASHINGTON, D.C. 20554 In Re Application of CENTRAL COAST BROADCASTERS, INC. (KCOY- Docket No. 16430 TV), SANTA MARIA, CALIF. For Construction Permit File No. BPCT-3580 ORDER (Adopted June 4, 1969) BY THE COMMISSION: COMMISSIONER COX CONCURRING AND ISSUING A STATEMENT; COMMISSIONER H. REX LEE DISSENTING TO PARAGRAPH 3. 1. The Commission has before it: (1) An application filed by Central Coast Broadcasters, Inc., on December 2, 1968, for review of the Review Board's decision, F.C.C. 68R-446, 14 F.C.C. 2d 985, released October 29, 1968; (2) oppositions thereto, filed December 23, 1968, by the Chief, Broadcast Bureau, and Key Television, Inc.; and (3) Central Coast's reply, filed January 6, 1969. 2. It is ordered, That the application for review, filed December 2, 1968, by Central Coast Broadcasters, Inc., Is denied. 3. It is further ordered. That on the Commission's own motion, section 1.519 of the rules Is waived to permit Central Coast Broadcasters, Inc., to file a new application or applications for modification of its present facility for the purpose of expanding its present service area, provided that the new proposal complies with all of our rules for the technical quality of service to Santa Maria, Calif., and provided further that appropriate provision is made for continuation of existing service (by such means as TV translators) to the areas outside of Santa Maria which would otherwise lose service. FEDERAL COMMUNICATIONS COMMISSION, CONCURRING STATEMENT OF COMMISSIONER KENNETH A. Cox I concur in this result, though I would have preferred to grant the present application on the condition that any areas which might lose service as a result would be provided service by translators or other similar means. 1 On Jan. 2, 1969, the Review Board granted the applicant leave to amend its application in order to reflect the assignment of the license of station KCOY-TV from Mili Acquistapace. Helen L. Pedotti, Burns Rick, and Marion A. Smith, doing business as Central Coast Television, to Central Coast Broadcasters, Inc., 15 F.C.C. 2d 771. BY THE COMMISSION: COMMISSIONER BARTLEY NOT PARTICIPATING; COMMISSIONER JOHNSON CONCURRING IN THE RESULT. 1. Cable TV of Santa Barabara, Inc., and Cable TV of Santa Barbara County, Inc. (both hereinafter referred to as Cable TV). operate CATV systems at Santa Barbara and the southern portion of Santa Barbara County, Calif., which provide more than 13,000 subscribers with the television signals of 14 California stations. The only signals involved here are: KCOY-TV (NBC, CBS), Santa Maria: KEYT (ABC), Santa Barbara; and KNBC (NBC) and KNXT (CBS), both Los Angeles. Stations KCOY-TV and KEYT place predicted grade A or better contours over the area served by Cable TV, and KNBC and KNXT place predicted grade B contours over the area. 2. On February 15, 1968, Central Coast Broadcasters, Inc., licensee of station KCOY-TV, requested program exclusivity vis-a-vis KNBC and KNXT pursuant to section 74.1103 (e) of the Commission's rules. Discussions between KCOY-TV and Cable TV followed, and an understanding was reached whereby Cable TV would carry duplicating KNBC and KNXT signals so long as KCOY-TV's station identification and local commercials were presented during network programing via "tone switching." Cable TV ceased its tone switching on June 19, 1969. The Commission has before it for consideration a "Petition for Order to Continue Non-Duplication Protection" filed May 6, 1969, by Central Coast, in which it asks that the Commission either order Cable TV to continue to provide tone switching or, alternatively, require Cable TV to show cause why it should not be directed to cease and desist from operating its CATV systems in violation of section 74.1103 (e) of the Commission's rules. Cable TV and Key Television, Inc., licensee of television broadcast station KEYT, Santa Barbara, Calif., have opposed the petition, and Central has replied. 3. In support of its petition, Central Coast urges: (a) That in paragraphs 49 and 56 of the second report and order, the Commission indicated that it would give full effect to private agreements between CATV operators and local television stations which provide for a different type or degree of program exclusivity than does section 74.1103 (e) of the rules; and (b) that, despite the Review Board's finding in docket No. 16430 (Central Coast Television (KCOY-TV), 14 F.C.C. 2d 985) that because of terrain factors KCOY-TV does not place an actual signal over the area served by Cable TV, KCOY-TV is entitled to program exclusivity under Shen-Heights TV Association, F.C.C. 68-168, 11 F.C.C. 2d 814, because of the priority of its predicted contour over those of KNBC and KNXT. Cable TV and Key Television assert that a determination by the Superior Court of Santa Barbara County in Central Coast Broadcasters, Inc. v. Cable TV of Santa Barbara County, Inc. (No. 83902, May 19, 1969), that no express or implied contract or agreement for continuous tone switching ever existed between the parties is res judicata here and precludes the application of paragraphs 49 and 56 of the second report and order, and that Shen-Heights TV Association, supra, is not dispositive here since the hearing on actual and predicted contours which that case sought to obviate has already occurred in docket No. 16430 and has resulted in a Review Board decision which destroys the underpinnings of KCOY-TV's claim to program exclusivity (F.C.C. 68R-446, 14 F.C.C. 2d 985, review denied, F.C.C. 69-614, 18 F.C.C. 2d). 4. We decline to grant petitioner's request that Cable TV be ordered to continue to provide tone switching. The Communications Act does not give the Commission authority to determine the validity of contracts between licensees and others. Regents of the University System of Georgia v. Carroll, 338 U.S. 586 (1950). Although a court decision is not necessarily res judicata in a subsequent administrative proceeding, we believe it appropriate to reject the alleged tone switching agreement here, particularly in view of all the public complaints which the Commission, Cable TV, and KCOY-TV have received about its operation. 5. We nevertheless believe that Cable TV should be required to afford program exclusivity to KCOY-TV, since that station's predicted grade A contour includes Santa Barbara, its signal is being carried by Cable TV, and nonduplication protection would, we find, affirmatively serve the public interest. We have previously set forth that the CATV system, if it is to carry broadcast signals, also has an obligation affirmatively to promote the public interest. Thus, in ShenHeights TV Association, supra, the Commission concluded that, in order to further our allocations policies, a CATV system coming within the terms of section 74.1103 must observe the carriage and nonduplication requirements of the rules even though a viewable offthe-air picture is not available in any part of the CATV community, in the absence of a substantial showing of unusual or exceptional circumstances justifying a waiver (11 F.C.C. 2d at 818, 819). We recognized that a waiver might be appropriate where a system established that there would be inordinate expense in obtaining the signal: e.g., where an acceptable signal is not receivable at the head end of the system (11 F.C.C. 2d at 817, 819). This case presents another instance where the CATV system, as a concommitant to carriage of broadcast signals, must also be called upon affirmatively to promote the public interest. 6. KCOY-TV is located very close to Santa Barbara, putting even a predicted grade A contour over that community. It faces, and has faced, serious financial difficulties because of its inability as a practical matter (i.e., the terrain conditions set out in the Review Board's de |