Washington Post 2007 Annual Report Download - page 33

Also as explained in that section, at three-year intervals beginning in October 1993, commercial broadcasters have
had the right to forego must-carry rights and insist instead that their signals not be carried by cable systems without their
prior consent. The next-three year election cycle begins October 1, 2008, with the elections effective January 1, 2009
through December 31, 2011. Congress has barred broadcasters from entering into exclusive retransmission consent
agreements through the end of 2010. The Company’s cable systems are currently carrying all of the stations that
insisted on retransmission consent. However, in some cases the Company has been required to provide consideration
to broadcasters to obtain retransmission consent, such as commitments to carry other program services offered by a
station or an affiliated company, to purchase advertising on a station, or to provide advertising availabilities on cable
to a station. Moreover, the FCC has issued a Notice of Proposed Rulemaking to, among other things, review the ability
of a broadcast programmer to require carriage of affiliated programming as a condition of obtaining retransmission
consent.
Digital Television. As previously noted, the FCC has determined that currently only television stations broadcasting in
a DTV-only mode can require local cable systems to carry their DTV signals and that if a DTV signal contains multiple
video streams only the “primary” stream of video, as designated by the station, is required to be carried. In December
2007, the FCC issued an order requiring cable operators to ensure that following the February 17, 2009 digital
transition deadline, all local must-carry broadcast stations are “viewable” by all subscribers, either by providing
customers with both a digital and down-converted analog version of such stations (and in some instances also
providing a standard definition digital signal) or by deploying an “all-digital” system platform prior to the February 17,
2009 deadline. Moreover, where a must-carry broadcast station’s signal is transmitted in HDTV format, cable
operators will be required to carry the signal in HDTV format and cannot downconvert that signal to standard
definition. Satisfaction of these requirements by carrying the analog and the standard definition and/or the HDTV
format signal of local broadcast signals could result in the Company’s cable systems being required to delete some
existing programming to make room for all of the video streams included in broadcasters’ DTV signals. Satisfaction of
these requirements by converting to all-digital platforms in our systems would require substantial capital expenditures,
including provisioning households with analog television receivers with set-top boxes capable of down-converting the
digital broadcast signals. In addition, the FCC is considering expanded must-carry requirements for Class A low-power
television stations after the digital transition deadline that could have similar adverse effects on Cable One’s
operations.
Pole Attachments. Pursuant to the Pole Attachment Act, the FCC exercises authority to disapprove unreasonable
rates charged to cable operators by most telephone and power utilities for utilizing space on utility poles or in
underground conduits. The FCC has adopted two separate formulas under the Pole Attachment Act: one for
attachments by cable operators generally and a higher rate for attachments used to provide “telecommunications
services.” However the Pole Attachment Act does not apply to poles and conduits owned by municipalities or
cooperatives. Also, states can reclaim exclusive jurisdiction over the rates, terms and conditions of pole attachments by
certifying to the FCC that they regulate such matters, and several states in which the Company has cable operations
have so certified. A number of cable operators (including the Company’s Cable ONE subsidiary) are using their cable
systems to provide not only television programming, but also Internet access and digital telephony. In 2002, the
U.S. Supreme Court held, based on a prior FCC ruling that Internet access service provided by cable operators is not a
“telecommunications service,” that the lower pole attachment rates apply not only to attachments used to provide
traditional cable services, but also to attachments used to provide Internet access. The FCC has not yet finally
determined whether digital telephony provided by cable operators is a “telecommunications service” that would
trigger the higher pole attachment rates. In November 2007, the FCC issued a Notice of Proposed Rulemaking
exploring whether to effectively eliminate cable’s lower pole attachment fees by imposing a higher unified rate for
entities providing broadband Internet service, which could moot the foregoing precedent. While the outcome of this
proceeding can not be predicted, changes to Cable ONE’s pole attachment rate structure could significantly increase
its annual pole attachment costs.
Federal Copyright Issues. The Copyright Act of 1976 gives cable television systems the ability, under certain terms
and conditions and assuming that any applicable retransmission consents have been obtained, to retransmit the signals
of television stations pursuant to a compulsory copyright license. Those terms and conditions permit cable systems to
retransmit the signals of local television stations on a royalty-free basis; however, in most cases, cable systems
retransmitting the signals of distant stations are required to pay certain license fees set forth in the statute or established
by subsequent administrative regulations. The compulsory license fees have been increased on several occasions since
this act went into effect. The 1999 Satellite Home Viewer Improvement Act provides direct broadcast satellite (“DBS”)
with a royalty-free compulsory copyright license for distribution of the signals of local television stations to satellite
subscribers in the markets served by such stations. This act continued the limitation on importing the signals of distant
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