Washington Post 2004 Annual Report Download - page 21

The Company's Detroit, Houston and Miami stations each commenced DTV broadcast operations in 1999, while the
Company's Orlando station commenced such operations in 2001. The Company's two other stations (San Antonio and
Jacksonville) began DTV broadcast operations in 2002.
In 1998 the FCC issued a decision implementing the requirement of the Telecommunications Act of 1996 that it charge
broadcasters a fee for offering certain ""ancillary and supplementary'' services on the DTV channel. These services include
data, video or other services that are offered on a subscription basis or for which broadcasters receive compensation
other than from advertising revenue. In its decision, the FCC imposed a fee of 5% of the gross revenues generated by such
services.
In September 2004 the FCC established certain rules for the DTV operations of low-power television stations. Among other
things, the FCC decided to allow certain low-power television stations to use a second channel for DTV operations while
continuing analog operations on their existing channels. Although the FCC decided that low-power television stations must
accept interference from and avoid interference to full-power broadcasters on their second channels, the use of second
channels by low-power television stations could cause additional interference to the signals of full-power stations. The FCC
also decided that low-power television stations may convert to digital operations on their current analog channels, which
might in some circumstances cause additional interference to the signals of full-power stations and limit the ability of full-
power stations to modify their analog or DTV transmission facilities.
The FCC has a policy of reviewing its DTV rules every two years to determine whether those rules need to be adjusted in
light of new developments. In September 2004 the FCC issued an order concerning the second periodic review of its DTV
rules. This review broadly examined the rules and policies governing broadcasters' DTV operations, including interference
protection rules and various operating requirements. In that order the FCC established procedures by which stations will
elect the channel on which they will operate after the transition to digital television is complete. In most cases, stations will
choose between their current analog channel and current DTV channel, provided that those channels are between
channels 2 and 51. All of the Company's TV stations except for WKMG have two channels that are within this range; for
WKMG, only its analog channel is within this range and, because of technical issues related to its analog channel, WKMG
is seeking another channel between channels 2 and 51 to use as its DTV channel when all-digital operations commence.
The FCC has received comments in long-pending proceedings to determine what public interest obligations should apply to
broadcasters' DTV operations. Among other things, the FCC has asked whether it should require broadcasters to provide
free time to political candidates, increase the amount of programming intended to meet the needs of minorities and women,
and increase communication with the public regarding programming decisions. In November 2004 the FCC released a
Report and Order adopting new obligations concerning children's programming by digital television broadcasters
(although some new obligations apply to the analog signals as well). Among other things, the FCC will require stations to
air three hours of ""core'' children's programming on their primary digital video streams and additional core children's
programming if they also broadcast free multicast video streams. Many of these requirements do not go into effect until
2006.
Pursuant to the ""must-carry'' requirements of the Cable Television Consumer Protection and 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 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. On February 23, 2005, the FCC issued another order in the same proceeding affirming its
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