Washington Post 2007 Annual Report Download - page 28

Closed Captioning. Effective January 1, 2008, the FCC increased the amount of programming aired on broadcast
stations that must contain closed captioning. The FCC maintained its existing requirement that all programming first
published or exhibited after January 1, 1998 or first prepared for digital television after July 1, 2002 and aired
between 6 a.m. and 2 a.m. must be captioned unless the programming or programming provider falls within one of
several exemptions. The January 1, 2008 change expands the percentage of programming prepared before those
dates that must contain closed captioning unless it is otherwise exempt. Network programming is closed captioned
when delivered to network affiliates for broadcast, but the cost of captioning locally originated and certain syndicated
programming must be borne by the broadcast stations themselves.
Carriage of Local Broadcast Signals. 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 is being
carried on all of the major cable systems in the stations’ respective local markets pursuant to retransmission consent
agreements.
Under the FCC’s rules, only stations that broadcast in a DTV-only mode and elect must-carry are entitled to mandatory
carriage of their DTV signals. For stations that are entitled to such mandatory carriage, 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 a cable television operator. Thus, a television station can presently obtain carriage of both its
analog and digital signals or of a multicast stream only through retransmission consent agreements
The FCC’s rules require cable operators 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. In addition, to ensure that all cable
subscribers have the ability to view the digital signals of local broadcast stations, cable operators must either
down-convert the signals of must-carry stations to analog format for analog cable subscribers, or, if the cable system is
all-digital, carry the must-carry signals only in digital format, provided that all subscribers with analog television sets
have the necessary equipment to view the broadcast content. Although a cable system that is not “all-digital” will be
required to carry analog versions of all must-carry signals to ensure that analog subscribers can view the signals, the
digital signals of stations carried pursuant to retransmission consent may be carried in any manner that comports with
the private agreements of the parties. As noted previously, all of the Company’s television stations are transmitting both
analog and digital broadcasting signals; with the exception of WJXT, each of those stations’ digital signals are being
carried on all of the major cable systems in their respective markets pursuant to retransmission consent agreements.
The Satellite Home Viewer Improvement Act of 1999 gave commercial television stations the right 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). In addition, the Satellite Home Viewer Extension and Reauthorization Act of 2004
gave DBS operators the option to offer FCC-determined “significantly viewed” signals of out-of-market (or “distant”)
broadcast stations to subscribers in local markets. Stations made their first DBS 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 (and the digital signal of most 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 a
pending proceeding, the FCC has sought comment on how it should apply digital signal carriage rules to DBS
providers.
Ownership Limits. The FCC maintains rules to limit the number of broadcast licenses a single entity may control. The
Communications Act requires the FCC to review these broadcast ownership rules periodically and to repeal or modify
any rule it determines is no longer in the public interest. In June 2003, the FCC conducted such a review, and it issued
an order that relaxed several of its local broadcast ownership rules. The FCC’s decision to modify its ownership 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, in June 2004 the Third Circuit held that the FCC did not
adequately justify its revised rules and remanded the case to the FCC for further proceedings.
12 THE WASHINGTON POST COMPANY