Twenty-First Century Fox 2014 Annual Report Download - page 30

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Modifications to the Company’s programming to reduce the risk of indecency violations could have an
adverse effect on the competitive position of Fox Television Stations and FOX. If indecency regulation is extended
to cable and satellite programming, and such extension was found to be constitutional, some of the Company’s cable
programming services could be subject to additional regulation that might affect subscription and viewership levels.
The FCC continues to enforce strictly its regulations concerning political advertising, children’s television,
environmental concerns, equal employment opportunity, technical operating matters and antenna tower
maintenance. FCC rules require the closed captioning of almost all broadcast and cable programming. A federal law
enacted in late 2010 requires affiliates of the four largest broadcast networks in the 25 largest markets to carry 50
hours of prime time or children’s programming per calendar quarter with video descriptions, i.e., a verbal
description of key visual elements inserted into natural pauses in the audio and broadcast over a separate audio
channel. Cable and satellite operators with 50,000 or more subscribers must do the same on each of the top five non-
broadcast networks they carry. Compliance has been required since July 1, 2012 and applies to FOX affiliates in the
Top 25 markets. Fox News Channel, which is among the top five non-broadcast networks, falls within the statutory
exemption for “live or near-live” programming. The same statute requires programming that was captioned on
television to retain captions when distributed via Internet Protocol apps or services. Although not required by FCC
regulation, the Company has committed to provide program ratings information for its broadcast network
programming for use in conjunction with V Chip technology, which blocks the display of television programming
based on its rating. The Company has also agreed to make this ratings information available for all full-length
entertainment programs that stream on websites the Company controls. FCC regulations governing network
affiliation agreements mandate that television broadcast station licensees retain the right to reject or refuse network
programming in certain circumstances or to substitute programming that the licensee reasonably believes to be of
greater local or national importance. Violation of FCC regulations can result in substantial monetary forfeitures,
periodic reporting conditions, short-term license renewals and, in egregious cases, denial of license renewal or
revocation of license.
Filmed Entertainment
United States. TCFF is subject to the provisions of so-called “trade practice laws” in effect in 25 states relating
to theatrical distribution of motion pictures. These laws substantially restrict the licensing of motion pictures unless
theater owners are first invited to attend a screening of the motion pictures and, in certain instances, also prohibit
payment of advances and guarantees to motion picture distributors by exhibitors. Further, pursuant to various
consent judgments, TCFF and certain other motion picture companies are subject to certain restrictions on their trade
practices in the United States, including a requirement to offer motion pictures for exhibition to theaters on a theater-
by-theater basis and, in some cases, a prohibition against the ownership of theaters.
Other International Regulation. In countries outside of the United States, there are a variety of existing or
contemplated governmental laws and regulations that may affect the ability of TCFF to distribute and/or license its
motion picture and television products to cinema, television or in-home media, including copyright laws and
regulations that may or may not be adequate to protect its interests, cinema screen quotas, television quotas, contract
term limitations, discriminatory taxes and other discriminatory treatment of U.S. products. The ability of countries to
deny market access or refuse national treatment to products originating outside their territories is regulated under
various international agreements, including the World Trade Organization’s General Agreement on Tariffs and
Trade and General Agreement on Trade and Services; however, these agreements have limited application with
respect to preventing the denial of market access to audio-visual products originating outside the European Union.
Internet
The Children’s Online Privacy Protection Act of 1998 (“COPPA”) prohibits websites from collecting
personally identifiable information online from children under age 13 without prior parental consent. The
Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (“CAN-SPAM”) regulates the
distribution of unsolicited commercial emails, or “spam.” The Video Privacy Protection Act (“VPPA”) prohibits the
knowing disclosure of information that identifies a person as having requested or obtained specific video materials
from a “video tape service provider.” Online services provided by the Company may be subject to COPPA, CAN-
SPAM and VPPA requirements.