There are a lot of inconsistencies in the counts provided in the 1963 document. It reports "VHF homes", even in then-#69 Scranton/Wilkes-Barre PA, which was always an all-UHF market during the analog days. On pg. 130, it says that if a market includes both VHF and UHF stations, only VHF stations are counted - no surprise, as VHF stations had superior coverage. Some markets include satellite stations; others don't. Scranton/W-B includes CATV homes, which was how my family got TV in that market in the late '60s/early '70s. Also, the TV homes counted were actual, not potential, so a market with low TV penetration, such as Zanesville OH (51%) wouldn't rank as high as a market with higher TV penetration, such as Amarillo (88%).
Remember also that the overall population of the U.S. has grown about 66% over the past 50 years, from about 189 million in 1963, to about 314 million in 2012. A market would have to have grown 66% just to keep up; many of the Rust Belt markets have about the same population as or even fewer people than 50 years ago, so because they didn't keep up with the national growth, their rankings dropped.
No surprise that the Phoenix market (including 9 of the state's then-14 counties) rose from #77 then to #12 today. The 1963 report counted about 253,100 actual TV homes. With 89% penetration, that represents about 285,000 potential homes. Based on 1963 US population estimates and total US household count on pg. 131, a household represented about 3.4 people (today, it's closer to 2.5), so the Phoenix market had about 970,000 people living in it, versus about 5 million today. The Phoenix market's 400%+ growth easily surpasses the nation's average.
On the other hand, Providence reported 710,400 TV homes then with a 95% penetration rate, or about 748,000 total households, for a population of about 2,540,000, about 2/3 of that number in Massachusetts. In 2012, Providence reported about 620,000 TV homes (I'm guessing near 100% penetration now?) for a population of about 1,575,000. Rhode Island gained about 200,000 population, so the Massachusetts part of the market lost over 1 million people. I'm guessing that a lot of that loss was due to counties transferring from the Providence market to Boston. If I were living in Southern Massachusetts, I'd much rather tune to a Boston station for a more professional product and for Massachusetts-centric news.