Washington Post 2003 Annual Report Download - page 25

Competition Act of 1992 (the ""1992 Cable Act''), a commercial television broadcast station may, under certain
circumstances, insist on carriage of its analog signal on cable systems serving the station's market area. Alternatively, such
stations may elect, at three-year intervals that began in October 1993, to forego must-carry rights and insist instead that
their signals not be carried without their prior consent pursuant to a retransmission consent agreement.
Stations that elect retransmission consent may negotiate for compensation from cable systems in the form of such things as
mandatory advertising purchases by the system operator, station promotional announcements on the system, and cash
payments to the station. The analog signal of each of the Company's television stations, with the exception of WJXT, is
being carried on all of the major cable systems in the stations' respective local markets pursuant to retransmission consent
agreements. WJXT's analog signal is being carried on cable in WJXT's local market pursuant to that station's must-carry
rights. The Satellite Home Viewer Improvement Act of 1999 gave commercial television stations similar rights to elect either
must-carry or retransmission consent with respect to the carriage of their analog signals on direct broadcast satellite
(""DBS'') systems that choose to provide ""local-into-local'' service ( i.e. , to distribute the signals of local television
stations to viewers in the local market area). Stations made their first DBS carriage election in July 2001 and will make
subsequent elections at three-year intervals beginning in October 2005. The analog signal of each of the Company's
television stations is being carried by DBS providers EchoStar and DirecTV on a local-into-local basis pursuant to
retransmission consent agreements.
In January 2001 the FCC issued an order governing the mandatory carriage of DTV signals by cable television operators.
The FCC decided that, pending further inquiry, only stations that broadcast in a DTV-only mode would be entitled to
mandatory carriage of their DTV signals. In a pending proceeding, the FCC has sought comment on issues related to
whether broadcasters should be able to seek mandatory cable carriage rights for both their analog and their digital
signals, including the need for such carriage to further the transition to DTV and the burden of such carriage on cable
operators. (The FCC also has sought comment on how it should apply digital signal carriage rules to DBS providers.) At
present, stations broadcasting both analog and digital signals may negotiate retransmission consent agreements for
carriage of part or all of their digital signals. In determining what parts of a DTV signal must be carried by cable operators,
the FCC has ruled that only a single stream of video (that is, a single channel of programming) together with any
additional ""program-related'' material is eligible for mandatory carriage. In the pending cable DTV proceeding, the FCC is
considering the scope of what constitutes ""program-related'' material in the digital context. Cable operators will be
required to carry the DTV signal of any DTV station eligible for mandatory carriage in the same format in which the signal
was originally broadcast. Thus, an HDTV signal of a station eligible for mandatory carriage must be carried in HDTV format
by cable operators. However, until the FCC's January 2001 order is clarified, it is unclear whether cable operators will be
responsible for ensuring that their set-top boxes are capable of passing DTV signals in their full definition to the consumer's
DTV receiver. As noted previously, all of the Company's television stations are transmitting both analog and digital
broadcasting signals; most of those stations' digital signals are being carried on at least some local cable systems pursuant
to retransmission consent agreements.
The Telecommunications Act of 1996 requires the FCC to review its broadcast ownership rules every two years and to
repeal or modify any rule it determines is no longer in the public interest. In June 2003, following such a review, the FCC
modified its national television ownership limit to permit a broadcast company to own an unlimited number of television
stations as long as the combined service areas of such stations do not include more than 45% of nationwide television
households, an increase from the previous limit of 35%. Subsequently, the fiscal 2004 omnibus appropriations bill was
signed into law by the President on January 23, 2004, and that bill included a provision that fixes the national ownership
limit at 39% of nationwide television households, removes the national ownership limit from the periodic review process
and also changes the frequency of such reviews from every two years to every four years.
In August 1999 the FCC amended its local television ownership rule to permit one company to own two television stations
in the same market if there are at least eight independently owned full-power television stations in that market (including
non-commercial stations and counting the co-owned stations as one), and if at least one of the co-owned stations is not
among the top four ranked television stations in that market. The FCC also decided to permit common ownership of stations
in a single market if their signals do not overlap, and to permit common ownership where one of the stations is failing or
unbuilt. These rule changes permitted increases in the concentration of station ownership in local markets, and all of the
Company's stations are now competing against two-station combinations in their respective markets. In April 2002 the U.S.
Court of Appeals for the District of Columbia Circuit found that the FCC's rule permitting co-owned stations in markets with
at least eight independent full-power stations had not been adequately justified because of a failure to consider the
significance of other types of media and remanded the rule to the FCC for further consideration.
On June 2, 2003, the FCC issued an order that modified several of its broadcast ownership rules and responded to the
remand from the D.C. Circuit. In its decision, the FCC further relaxed the local television ownership rule and also relaxed
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