Washington Post 2013 Annual Report Download - page 37

otherwise change the communications or copyright regimes in connection with any related legislation. The net effect that
changes to these regimes would have on the Company’s cable and broadcast operations, or on the Company overall,
cannot be predicted.
Ownership Limits. The Communications Act and the FCC’s rules limit the number and types of media outlets in which a
single person or entity may have an attributable interest. Among other restrictions, the FCC’s local television ownership
rule generally prohibits one company from owning two television stations in the same market unless there would remain at
least eight independently owned full-power television stations in that market, and at least one of the commonly owned
stations is not among the top-four-ranked television stations in that market. In addition, by statute, a single person or entity
may have an attributable interest in an unlimited number of television stations nationwide, as long as the aggregate
audience reach of such stations does not exceed 39% of nationwide television households and as long as the interest
complies with the FCC’s other ownership restrictions.
The FCC also restricts so-called “cross-ownership” of newspapers and broadcast stations within a market.
In December 2011, the FCC issued a notice of proposed rulemaking, proposing to retain the local television ownership
rule, seeking comment on a possible waiver standard for smaller markets and proposing a modest relaxation of the
newspaper/broadcast rule. The notice also addresses the FCC’s radio ownership and radio/television cross-ownership
rules, and it asks about shared services agreements and local news agreements, including whether such arrangements
should be attributable for purposes of the ownership rules. The proceeding is pending, and it is not possible to predict its
outcome, but changes to the FCC’s ownership rules could affect PNS’s operations.
Programming. Five of PNS’s six stations are affiliated with one or more of the national television networks, which
provide a substantial amount of programming to their television station affiliates. The expiration dates of these affiliation
agreements are set forth at the beginning of the Television Broadcasting section. PNS’s Jacksonville station, WJXT, has
operated as an independent station since 2002. In addition, each of the Company’s stations receives programming from
syndicators and other third-party programming providers. PNS’s performance depends, in part, on the quality and
availability of third-party programming, and any substantial decline in the quality or availability of this programming could
materially affect PNS’s operations.
Public Interest Obligations. To satisfy FCC requirements, stations generally are expected to air a specified number of
hours of programming intended to serve the educational and informational needs of children and to complete reports on a
quarterly basis concerning children’s programming. In addition, the FCC requires stations to limit the amount of
advertising that appears during certain children’s programs.
In April 2012, the FCC adopted a rule that requires television stations to submit electronically most of their public
inspection files to the FCC, for hosting on the FCC’s website. The National Association of Broadcasters (NAB) has
challenged the rule in the U.S. Court of Appeals for the D.C. Circuit; the appeal is being held in abeyance, pending
the FCC’s consideration of a petition for reconsideration of the rule change. The rule could affect PNS’s operations
and regulatory compliance costs.
The FCC has other regulations and policies to ensure that broadcast licensees operate in the public interest, including rules
requiring the closed-captioning of programming to assist television viewing by the hearing impaired; video description
rules to assist television viewing by the visually impaired; rules concerning the captioning of video programming distributed
via the Internet; rules concerning commercial loudness; and a rule requiring station licensees to provide equal opportunity in
employment to all qualified job applicants and prohibiting discrimination against any person based on race, color, religion,
national origin or gender. Compliance with these rules imposes additional costs on the PNS stations that could affect PNS’s
operations.
Political Advertising. The FCC regulates the sale of advertising by PNS’s stations to candidates for public office and
imposes other restrictions on the broadcast of political announcements more generally. The application of these regulations
may limit the advertising revenues of PNS’s television stations during the periods preceding elections.
Broadcast Indecency. The FCC’s policies prohibit the broadcast of indecent and profane material during certain hours
of the day, and the FCC regularly imposes monetary forfeitures when it determines that a television station violated that
policy. Broadcasters have repeatedly challenged these rules in court, arguing, among other things, that the FCC has failed
to justify its indecency decisions adequately, that the FCC’s policy is too subjective to guide broadcasters’ programming
decisions and that its enforcement approach otherwise violates the First Amendment. In June 2012, the U.S. Supreme Court
held that certain fines against broadcasters for “fleeting expletives” were unconstitutional because the FCC failed to provide
advance notice to broadcasters of what the FCC deemed to be indecent, but it also upheld the FCC’s authority to regulate
broadcast decency. This ruling could result in additional regulatory risks. The FCC is currently reconsidering its indecency
policies.
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