Washington Post 2010 Annual Report Download - page 34

determined that states may impose state universal service fund fees on interconnected VoIP service providers subject to
certain limitations and requirements. State universal service fund contributions are based on a percentage of revenues
earned from end-user intrastate interconnected VoIP services, and Cable ONE is typically permitted to recover these
contributions from their customers. Cable ONE cannot predict whether or how the imposition of such state-based universal
service fees will affect its operations and business.
Intercarrier Compensation. The FCC is considering various proposals designed to reform the manner in which
providers of telecommunications and VoIP services compensate one another for transporting and terminating various forms
of network traffic. FCC determinations regarding the rates, terms and conditions for transporting and terminating such
traffic can have a profound and material effect on the profitability of providing voice and data services. It is not possible
to predict what actions the FCC might take in this area or the effect that they will have on Cable ONE.
CPNI. In 2007, the FCC adopted rules expanding the protection of customer proprietary network information (“CPNI”)
and extending CPNI protection requirements to providers of interconnected VoIP service. CPNI is information about the
quantity, technical configuration, type, location and amount of a voice customer’s use. These requirements generally have
increased the cost of providing interconnected VoIP service, as providers now must implement various safeguards to
protect CPNI from unauthorized disclosure.
Access for Persons With Disabilities. FCC regulations require providers of interconnected VoIP services to comply with
all disability access requirements that apply to telecommunications carriers, including the provision of telecommunications
relay services for persons with speech or hearing impairments. These requirements generally have had the effect of
increasing the cost of providing VoIP services.
Service Discontinuance Obligations. In 2009, the FCC adopted rules subjecting providers of interconnected VoIP
services to the same service discontinuance requirements applicable to providers of wireline telecommunication services.
These requirements typically apply when a service provider exits a region or eliminates services. Along with other
FCC actions described in this section that impose legacy telecom obligations on interconnected VoIP providers, this
development will subject the Company’s interconnected VoIP services to greater regulation and thus greater burdens
and costs.
Regulatory Fees. The FCC requires interconnected VoIP service providers to contribute to shared costs of FCC
regulation through an annual regulatory fee assessment. These fees have increased Cable ONE’s cost of providing
VoIP services.
Local Number Portability. Providers of interconnected VoIP services and their “numbering partners” must ensure that
their subscribers have the ability to port their telephone numbers when changing service providers, and local exchange
carriers and commercial mobile radio service providers must port numbers that they control to an interconnected VoIP
service provider upon a valid port request. Cable ONE, along with other providers of interconnected VoIP service, must
contribute funds to cover the shared costs of local number portability and the costs of North American Numbering Plan
Administration. The FCC currently is considering whether additional numbering requirements (such as allowing consumers
access to abbreviated dialing codes like 211 and 311) should be applied to interconnected VoIP service providers.
Although consumers’ ability to port their existing telephone numbers to interconnected VoIP service has created additional
opportunities for Cable ONE to gain voice customers, the local number portability and associated rules overall have had
the effect of increasing the cost of providing VoIP service.
Newspaper Publishing
The Company’s newspaper publishing operations include results for its flagship newspaper and Internet site, The
Washington Post, The Slate Group and a number of additional newspapers and websites.
The Washington Post
WP Company LLC (“WP Company”), a subsidiary of the Company, publishes The Washington Post, which is a morning
daily and Sunday newspaper primarily distributed by home delivery in the Washington, DC, metropolitan area, including
large portions of Maryland and northern Virginia. The Post’s two primary sources of revenue are advertising and
subscription fees, which accounted for 66% and 32% of its total revenue in 2010, respectively. Advertising revenue is
derived from the sale of display and classified advertisements, as well as the insertion and other distribution of preprinted
advertisements.
The following table shows the average paid daily (including Saturday) and Sunday circulation of the Post for 52-week
periods ended September 28, 2008 and September 27, 2009, as reported by the Audit Bureau of Circulations (“ABC”)
and as estimated by the Post for the 53-week period ended October 3, 2010 (for which period ABC had not completed
18 THE WASHINGTON POST COMPANY