Twenty-First Century Fox 2014 Annual Report Download - page 28

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never completed. In early 2014 the FCC announced its intention to combine the 2011 review with the quadrennial
review scheduled for 2014. In the 2014 review, which is pending, the FCC again proposed minor modifications that
are not likely to affect the impact of the FCC ownership rules on the Company’s ownership of media properties.
Fox Television Stations is in compliance with the rules governing ownership of multiple stations in the same
market and with the national station ownership cap established by Congress. In September 2013, the FCC
commenced a proceeding to consider elimination of the so-called “UHF discount” under which UHF stations are
attributed with only 50% of the television households in their markets for purposes of calculating compliance with
the national station ownership cap. If the FCC decides to eliminate the UHF discount it may affect the Company’s
ability to acquire television stations in additional markets. It is not possible to predict the timing or outcome of the
pending proceeding.
Fox Television Stations owns two television stations in the New York DMA. By virtue of its common
ownership with News Corp due to the Murdoch Family Trust’s ownership interest in both News Corp and the
Company, Fox Television Stations also retains an attributable interest in The New York Post, a daily newspaper in
the New York DMA. On October 6, 2006, the FCC reaffirmed the Company’s permanent waiver of the
newspaper/broadcast cross-ownership rule, which allows the common ownership of the Post and WNYW(TV), and
granted a two-year temporary waiver of the rule to continue to allow the common ownership of the Post and
WWOR-TV (the “October 2006 Order”). The Company has asked the FCC to extend the permanent waiver to
WWOR-TV. The temporary waiver remains in effect pursuant to FCC precedent pending FCC action on this
request. Parties opposed to the October 2006 Order filed a petition for reconsideration with the FCC, which was
denied on May 22, 2009. Other opponents of the October 2006 Order have asked the FCC to reconsider its May 22,
2009 decision and have filed an opposition to the Company’s request for a permanent waiver. It is not possible to
predict the timing or outcome of the FCC’s action on this request for reconsideration or its effect on the Company.
In addition, as a result of these rules, the Company’s future conduct, including the acquisition of any broadcast
networks, or stations or any newspapers, in the same local markets in which News Corp owns or operates
newspapers or has acquired television stations, may affect News Corp’s ability to own and operate its newspapers or
any television stations it acquires or otherwise comply with the rules. Therefore, the Company and News Corp
agreed in the Separation and Distribution Agreement that if the Company acquires, after the Separation, newspapers,
radio or television broadcast stations or television broadcast networks in the U.S. and such acquisition would impede
or be reasonably likely to impede News Corp’s business, then the Company will be required to take certain actions,
including divesting assets, in order to permit News Corp to hold its media interests and to comply with such rules.
Under the Communications Act, no broadcast station licensees may be owned by a corporation if more than
25% of the corporation’s stock is owned or voted by non-U.S. persons, their representatives, or by any other
corporation organized under the laws of a foreign country. The Company owns broadcast station licensees in
connection with its ownership and operation of U.S. television stations. On April 18, 2012, the Company announced
that it had suspended 50% of the voting rights of the Class B Common Stock held by non-U.S. stockholders in order
to maintain compliance with U.S. law. As of October 2013, the suspension of voting rights of shares of Class B
Common Stock held by non-U.S. stockholders was 35%. This suspension will remain in place for as long as the
Company deems it necessary to maintain compliance with the Act. The FCC could review the Company’s
compliance with the Act in connection with its consideration of Fox Television Stations’ license renewal
applications.
FCC regulations implementing the Cable Television Consumer Protection and Competition Act of 1992
require each television broadcaster to elect, at three-year intervals, either to (i) require carriage of its signal by cable
systems in the station’s market (“must carry”) or (ii) negotiate the terms on which that broadcast station would
permit transmission of its signal by the cable systems within its market (“retransmission consent”). Generally, the
Company has elected retransmission consent for the stations owned and operated by Fox Television Stations. The
Satellite Home Viewer Improvement Act of 1999 requires satellite carriers to carry upon request all television
stations located in markets in which the satellite carrier retransmits at least one local station pursuant to the
copyright license provided in the statute (“Carry One, Carry All”). FCC regulations implementing this statutory
provision require affected stations to elect either mandatory carriage at the same three year intervals applicable to
cable “must carry” or negotiate carriage terms with the satellite operators. Several cable and satellite operators filed
a petition for rulemaking with the FCC seeking changes in the retransmission consent regulations, including the