Twenty-First Century Fox 2014 Annual Report Download - page 25

19
Government Regulation
General
Various aspects of the Company’s activities are subject to regulation in numerous jurisdictions around the
world. The Company believes that it is in material compliance with the requirements imposed by those laws and
regulations described herein. The introduction of new laws and regulations in countries where the Company’s
products and services are produced or distributed (and changes in the enforcement of existing laws and regulations
in those countries) could have a negative impact on the interests of the Company.
Cable Network Programming and Direct Broadcast Satellite Television
Asia. The Company broadcasts television programming over a “footprint” covering approximately 53 Asian
countries. Most countries in which the Company operates have a regulatory framework for the satellite and cable
television industry. Government regulation of direct reception and redistribution via cable or other means of satellite
television signals, where it is addressed at all, is treated differently in each country. At one extreme are absolute
bans on private ownership of satellite receiving equipment. Some countries, however, have adopted a less restrictive
approach, opting to allow ownership of satellite receiving equipment by certain institutions and individuals but
allowing them to receive only authorized broadcasts. At the opposite end of the spectrum are countries where private
satellite dish ownership is allowed and laws and regulations have been adopted which support popular access to
satellite services through local cable redistribution.
Most television services within Asia, whether free-to-air or pay television, are also subject to licensing
requirements. In addition, most countries in which the Company operates control the content offered by local
broadcast operators through censorship requirements to which program suppliers, such as the Company, are subject.
Certain countries also require a minimum percentage of local content. Other countries require local broadcast
operators to obtain government approval to retransmit foreign programming.
Additional categories of regulation of actual or potential significance to the Company are restrictions on
foreign investment in distribution platforms, television programming production, limitations on exclusive
arrangements for channel distribution and non-discrimination requirements for supply or carriage of programming
and anti-competition or anti-trust legislation. Such restrictions are different in each country.
India. In India, private satellite dish ownership, including DTH, is allowed. Television viewers receive
broadcast television signals primarily through terrestrial and cable delivery and, in more recent years, through DTH
and IPTV delivery. Terrestrial broadcasting remains the domain of government-owned broadcast stations.
All cable television operators are required to carry certain government-operated channels. Retransmissions of
foreign satellite channels, such as STAR India’s channels, are permitted, subject to licensing requirements and
compliance with local applicable laws, including programming and advertisement codes. The Indian government
requires that all film and media content, whether produced in India or abroad, be certified by the Central Board of
Film Certification prior to exhibition in India and also places certain restrictions on advertising content. The Indian
Broadcasting Foundation has issued Self Regulatory Guidelines that apply to the programming on non-news and
current affairs channels.
Certain wholesale and retail channel tariffs are under review after intervention by the Indian courts. While
there is no tariff regulation for DTH at the retail level, broadcasters are required under an interim order by the court
to offer their channels to DTH platforms at 42% of the rates charged to analog cable. Broadcasters are also required
to provide their channels on non-discriminatory terms to all distributors if no carriage charges are being sought from
broadcasters. In 2011, the Cable Television Act was amended and new rules were issued mandating that cable
networks switch from analog to digital systems. The TRAI issued rules that mandated, among other things, basic
service tiers comprised of free-to-air channels be compulsorily offered to consumers. This new regime, which will
bring digital cable pricing in line with DTH, is expected to be fully implemented by the end of calendar year 2014.
The TRAI has recently enacted a 27.5% increase in channel rates that will be implemented by January 1, 2015.