Twenty-First Century Fox 2013 Annual Report Download - page 28

“repacking” of channel assignments to increase efficient spectrum usage. If voluntary measures fail to yield the
amount of spectrum the FCC deems necessary for wireless broadband deployment, the Broadband Plan proposes
various mandates to reclaim spectrum, such as forced channel sharing. In response to the Broadband Plan,
Congress passed legislation in February 2012 authorizing the FCC to conduct voluntary auctions of television
broadcast station spectrum. Stations that continue their operations may have to change channels once the FCC
“repacks” broadcast spectrum. The legislation requires the FCC to assist stations in retaining their current
coverage areas, provides that no stations will be forced into the VHF band and establishes a fund to reimburse
broadcasters for reasonable channel relocation expenses. The broadcast industry is exploring additional uses for
currently allocated spectrum. In April 2010, Fox Television Stations and eleven other major broadcast station
group owners formed Mobile Content Venture (“MCV”), a joint venture to develop a new national mobile
content service utilizing the stations’ digital broadcast spectrum. MCV launched DyleTM mobile television
service in 35 markets at the end of 2012. It is expected that FCC auctions and repacking will involve multiple
rulemaking proceedings and may take several years to complete. It is not possible to predict the timing or
outcome of implementation of the Broadband Plan, FCC spectrum auctions and repacking, or their effect on the
Company.
On February 4, 2008, the FCC issued an order that concluded the quadrennial review of its broadcast
ownership regulations required by the 1996 Telecom Act (the “February 2008 Order”). The FCC decided there
should be no changes to its multiple ownership rules relating to the ownership of more than one television station
in the same market. Those rules (i) permit the ownership of two television stations with overlapping coverage
areas if the stations are in separate DMAs; and (ii) permit the ownership of two stations in the same DMA if their
coverage areas do not overlap or if eight independently owned full power television stations will remain in the
DMA after the stations that had been independently owned become commonly owned, and one of the merged
stations is not among the top four-ranked stations in the market, based on audience share. The FCC modified its
rule prohibiting common ownership of a broadcast station and a newspaper in the same market to allow such
combinations in certain situations. The February 2008 Order was appealed by several parties, including the
Company. On July 7, 2011, the United States Court of Appeals for the Third Circuit affirmed the FCC’s decision
to retain its multiple ownership rules and vacated and remanded the revision to the newspaper/broadcast cross-
ownership rule on the grounds the FCC failed to comply with procedural notice and comment requirements. On
December 22, 2011, the FCC commenced the next quadrennial review, in which it proposed minor modifications
to its ownership regulations. The proposed modifications are not likely to affect the impact of the FCC ownership
rules on the Company’s ownership of media properties. The Company has filed comments in the current
proceeding, which is pending.
Fox Television Stations is in compliance with the rules governing ownership of multiple stations in the same
market and with the national station ownership cap established by Congress. Fox Television Stations owns two
television stations in the New York DMA. By virtue of its common ownership with News Corp due to the
Murdoch Family Trust’s ownership interest in both News Corp and the Company, Fox Television Stations also
retains an attributable interest in The New York Post, a daily newspaper in the New York DMA. On October 6,
2006, the FCC reaffirmed the Company’s permanent waiver of the newspaper/broadcast cross-ownership rule,
which allows the common ownership of the Post and WNYW(TV), and granted a two-year temporary waiver of
the rule to continue to allow the common ownership of the Post and WWOR-TV (the “October 2006 Order”).
The Company has asked the FCC to extend the permanent waiver to WWOR-TV. The temporary waiver remains
in effect pursuant to FCC precedent pending FCC action on this request. Parties opposed to the October 2006
Order filed a petition for reconsideration with the FCC, which was denied on May 22, 2009. Other opponents of
the October 2006 Order have asked the FCC to reconsider its May 22, 2009 decision and have filed an opposition
to the Company’s request for a permanent waiver. It is not possible to predict the timing or outcome of the FCC’s
action on this request for reconsideration or its effect on the Company.
In addition, as a result of these rules, the Company’s future conduct, including the acquisition of any
broadcast networks, or stations or any newspapers, in the same local markets in which News Corp owns or
operates newspapers or has acquired television stations, may affect News Corp’s ability to own and operate its
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