Washington Post 2005 Annual Report Download - page 22

carriage election in July 2001, with subsequent elections occurring 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. In February 2005 the FCC issued another order in the same proceeding affirming its earlier
decision and thus declined to require cable television operators to simultaneously carry both the analog and digital signals
of television broadcast stations. In the same 2005 order, the FCC affirmed an earlier decision that only a single stream of
video (that is, a single channel of programming), rather than a television broadcast station's entire DTV signal, is eligible
for mandatory carriage by cable television operators. (In a pending proceeding, the FCC has sought comment on how it
should apply digital signal carriage rules to DBS providers.) Thus, at present, a television station wishing to insure that
cable operators carry both the analog and digital signals of the station, and all of the program streams that may be present
in the station's digital signal, can achieve those objectives only if it is able to negotiate appropriate transmission consent
agreements with cable operators. Cable operators are required to carry the portion of 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 video
stream eligible for mandatory carriage must be carried in HDTV format by cable operators. However, it is still unclear
whether cable operators will be required to insure 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 Communications Act requires the FCC to review its broadcast ownership rules periodically 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, legislation was enacted that fixed the national ownership limit at 39% of
nationwide television households and removed the national ownership limit from the periodic FCC review process.
In 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 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 June 2003 the FCC issued an order that modified several of its local broadcast ownership rules. In its decision, the FCC
expanded the circumstances under which co-ownership of two television stations in a market is permitted, and provided
that in a market with 18 or more television stations, one entity may own up to three television stations. The FCC retained,
however, the requirement that a single entity may not own more than one of the top four ranked television stations in a
market. Waivers of these local ownership limits would be available where a station is failing and under certain other
circumstances. In addition to the changes to its local television ownership rules, the FCC liberalized its restrictions on
owning a combination of radio stations, television stations, and daily newspapers in the same market, allowing, for
example, one entity to own a daily newspaper and a TV station in the same market as long as there are four or more
television stations in the market. The FCC's decision to adopt these new rules, however, was appealed to the U.S. Court of
Appeals for the Third Circuit, and that court stayed the effectiveness of the new rules pending the outcome of the appeal.
Subsequently, the Third Circuit held that the FCC did not adequately justify its revised rules, remanded the case to the FCC
for further proceedings, and held that the stay would remain in effect pending the outcome of the remand. The FCC has not
yet instituted remand proceedings, nor has it resolved long-pending petitions for reconsideration of the revised rules. In the
interim, the former local ownership and cross-ownership rules remain in effect.
The Bipartisan Campaign Reform Act of 2002 imposed various restrictions both on contributions to political parties during
federal elections and on certain broadcast, cable television and DBS advertisements that refer to a candidate for federal
office. Those restrictions may have the effect of reducing the advertising revenues of the Company's television stations
during campaigns for federal office below the levels that otherwise would be realized in the absence of such restrictions.
The FCC is conducting proceedings dealing with various issues in addition to those described elsewhere in this section,
including proposals to modify its regulations relating to the ownership and operation of cable television systems (which
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