Washington Post 2006 Annual Report Download - page 38

cable television systems. Such services might also present additional revenue opportunities for the Company's television
stations from the possible distribution on such services of the stations' news and other local programming.
Cable television systems operate in a highly and increasingly competitive environment. In addition to competing with the
direct reception of television broadcast signals by the viewer's own antenna, such systems (like existing television stations)
are subject to competition from various other forms of video program delivery. In particular, DBS services (which are
discussed in more detail in the preceding paragraph) have been growing rapidly and are now a significant competitive
factor. The ability of DBS operators to provide local-into-local service (as described above) has increased competition
between cable and DBS operators in markets where local-into-local service is provided. Although DBS operators are not
required by law to provide local-into-local service, in connection with the 2003 acquisition by News Corporation (""News
Corp.'') of a controlling interest in DirecTV, DirecTV agreed with the FCC to provide that service in all U.S. markets by the
end of 2008. EchoStar has announced that it also intends eventually to provide local-into-local service in all U.S. markets.
While some smaller markets may not receive this service for another year or so, local-into-local service is currently being
offered by both DirecTV and EchoStar in most markets in which the Company provides cable television service. News
Corp. is a global media company that in the United States owns the Fox Television Network, 35 broadcast television
stations, a group of regional sports networks and a number of nationally distributed cable networks (including the Fox
News Channel, FX, the Fox Movie Channel, the Speed Channel and Fox Sports Net), and its acquisition of a controlling
interest in DirecTV was approved by the FCC in an order that, among other things, requires News Corp. to offer carriage
of its broadcast television stations and access to its cable programming services to cable television systems and other
multichannel video programming distributors on nonexclusive and nondiscriminatory terms and conditions. Notwithstanding
the requirements imposed by the FCC, this acquisition has the potential not only to enhance DirecTV's effectiveness as a
competitor, but also to limit the access of cable television systems to desirable programming and to increase the costs of
such programming. Certain of the Company's cable television systems have also been partially or substantially overbuilt
using conventional cable system technology by various small to mid-sized independent telephone companies, which
typically offer cable modem and telephone service as well as basic cable service. At the end of 2006, such overbuilt
systems accounted for approximately 4% of the homes passed by the Company's cable systems. The Company
anticipates that some overbuilding of its cable systems will continue, although it cannot predict the rate at which
overbuilding will occur or whether any major telephone companies like Verizon, Qwest or AT&T will decide to overbuild
any of its cable systems. Even without constructing their own cable plant, local telephone companies can also compete with
cable television systems in the delivery of high-speed Internet access by providing DSL service. In addition, some telephone
companies have entered into strategic partnerships with DBS operators that permit the telephone company to package the
video programming services of the DBS operator with the telephone company's own DSL service, thereby competing with
the video programming and cable modem services being offered by existing cable television systems. Finally, it now seems
clear that telephone companies and others will be able to compete with cable television systems in providing high-speed
Internet access over large areas by constructing wireless networks based on WiMAX and other advanced transmission
standards. Indeed, at the end of 2006 approximately 20% of the homes passed by the Company's cable systems also
had access to WiMAX systems that offer high-speed Internet access, with most of that total accounted for by WiMAX
systems owned by Clearwire Corporation that overlap several of the Company's cable systems in Idaho.
According to figures compiled by Publishers' Information Bureau, Inc., of the 247 magazines reported on by the Bureau,
Newsweek ranked sixth in total advertising revenues in 2006, when it received approximately 2.0% of all advertising
revenues of the magazines included in the report. The magazine industry is highly competitive, both within itself and with
other advertising media (including Internet-based media) that compete for audience and advertising revenue.
The Company's publications and television broadcasting and cable operations also compete for readers' and viewers'
time with various other leisure-time activities.
Executive Officers
The executive officers of the Company, each of whom is elected for a one-year term at the meeting of the Board of
Directors immediately following the Annual Meeting of Stockholders held in May of each year, are as follows:
Donald E. Graham, age 61, has been Chairman of the Board of the Company since September 1993 and Chief Executive
Officer of the Company since May 1991. Mr. Graham served as President of the Company from May 1991 until
September 1993 and prior to that had been a Vice President of the Company for more than five years. Mr. Graham also
served as Publisher of
The Washington Post from 1979 until September 2000.
Veronica Dillon, age 57, became the Vice President, General Counsel and Secretary of the Company in January 2007.
Ms. Dillon began her career with the Company in February 1991 as corporate counsel at Kaplan, Inc. She was
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