Washington Post 2006 Annual Report Download - page 27

programming or programming provider falls within one of several exemptions. Network programming is closed captioned
when delivered to network affiliates for broadcast, but the cost of captioning locally originated and certain syndicated
programming must be borne by the broadcast stations themselves.
Pursuant to the ""must-carry'' requirements of the Cable Television Consumer Protection and Competition Act of 1992 (the
""1992 Cable Act''), a commercial television broadcast station may, under certain circumstances, insist on carriage of its
analog signal on cable systems serving the station's market area. Alternatively, such stations may elect, at three-year
intervals that began in October 1993, to forego must-carry rights and insist instead that their signals not be carried without
their prior consent pursuant to a retransmission consent agreement. Stations that elect retransmission consent may negotiate
for compensation from cable systems in the form of such things as mandatory advertising purchases by the system
operator, station promotional announcements on the system, and cash payments to the station. The analog signal of each
of the Company's television stations is being carried on all of the major cable systems in the stations' respective local
markets pursuant to retransmission consent agreements. The Satellite Home Viewer Improvement Act of 1999 gave
commercial television stations similar rights to elect either must-carry or retransmission consent with respect to the carriage
of their analog signals on direct broadcast satellite (""DBS'') systems that choose to provide ""local-into-local'' service
(i.e., to distribute the signals of local television stations to viewers in the local market area). Stations made their first DBS
carriage election in July 2001, with subsequent elections occurring at three-year intervals beginning in October 2005. The
analog signal of each of the Company's television stations (and the digital signal of most of the Company's television
stations) is being carried by DBS providers EchoStar and DirecTV on a local-into-local basis pursuant to retransmission
consent agreements.
In 2001 the FCC issued an order governing the mandatory carriage of DTV signals by cable television operators. The FCC
decided that, pending further inquiry, only stations that broadcast in a DTV-only mode would be entitled to mandatory
carriage of their DTV signals. In February 2005 the FCC issued another order in the same proceeding affirming its earlier
decision and thus declined to require cable television operators to simultaneously carry both the analog and digital signals
of television broadcast stations. In the same 2005 order, the FCC affirmed an earlier decision that only a single stream of
video (that is, a single channel of programming), rather than a television broadcast station's entire DTV signal, is eligible
for mandatory carriage by cable television operators. (In a pending proceeding, the FCC has sought comment on how it
should apply digital signal carriage rules to DBS providers.) Thus, at present, a television station wishing to insure that
cable operators carry both the analog and digital signals of the station, and all of the program streams that may be present
in the station's digital signal, can achieve those objectives only if it is able to negotiate appropriate retransmission consent
agreements with cable operators. Cable operators are required to carry the portion of the DTV signal of any DTV station
eligible for mandatory carriage in the same format in which the signal was originally broadcast. Thus, an HDTV video
stream eligible for mandatory carriage must be carried in HDTV format by cable operators. However, it is still unclear
whether cable operators will be required to insure that their set-top boxes are capable of passing DTV signals in their full
definition to the consumer's DTV receiver. As noted previously, all of the Company's television stations are transmitting both
analog and digital broadcasting signals; with the exception of WJXT, each of those stations' digital signals are being
carried on all of the major cable systems in their respective markets pursuant to retransmission consent agreements.
The Communications Act requires the FCC to review its broadcast ownership rules periodically and to repeal or modify any
rule it determines is no longer in the public interest. In June 2003, following such a review, the FCC modified its national
television ownership limit to permit a broadcast company to own an unlimited number of television stations as long as the
combined service areas of such stations do not include more than 45% of nationwide television households, an increase
from the previous limit of 35%. Subsequently, legislation was enacted that fixed the national ownership limit at 39% of
nationwide television households and removed the national ownership limit from the periodic FCC review process.
In 1999 the FCC amended its local television ownership rule to permit one company to own two television stations in the
same market if there are at least eight independently owned full-power television stations in that market (including non-
commercial stations and counting the co-owned stations as one), and if at least one of the co-owned stations is not among
the top four ranked television stations in that market. The FCC also decided to permit common ownership of stations in a
single market where one of the stations is failing or unbuilt. These rule changes permitted increases in the concentration of
station ownership in local markets, and all of the Company's stations are now competing against two-station combinations
in their respective markets.
In June 2003 the FCC issued an order that modified several of its local broadcast ownership rules. In its decision, the FCC
expanded the circumstances under which co-ownership of two television stations in a market is permitted, and provided
that in a market with 18 or more television stations, one entity may own up to three television stations. The FCC retained,
however, the requirement that a single entity may not own more than one of the top four ranked television stations in a
market. Waivers of these local ownership limits would be available where a station is failing and under certain other
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