Washington Post 2008 Annual Report Download - page 30

To determine the channel on which their stations would operate after they completed their transitions to digital television,
broadcasters were generally permitted to choose between each station’s analog channel and DTV channel, provided that
those channels were between channels 2 and 51.
All of the Company’s TV stations except WKMG had two channels that are within this range, and they accordingly
elected to operate on either their analog or digital channel. Because WKMG’s current DTV channel is not within the
permitted range for post-transition channels and technical issues prevent post-transition use of the station’s analog channel,
in August 2007 the FCC approved WKMG’s request to use channel 26 as its post-transition DTV channel. All of the
Company’s stations are currently engaged in DTV broadcasting and have completed, or expect to complete within the
next several months, construction of their final post-transition facilities.
Full-power digital television stations, including the Company’s stations, may experience interference from a variety of
sources, such as other full-power stations and low-power television stations that have been authorized to provide digital
service on either the low-power station’s existing analog channel or a different channel. In addition, in the future,
broadcast stations may experience interference from electronic devices that the FCC may allow to be operated on an
unlicensed basis. In November 2008, over objections of the broadcasting industry, the FCC granted wireless providers
permission to operate such unlicensed devices. That order, called the “white spaces” order, currently is subject to an
appeal. The FCC has adopted rules to limit the amount of interference that full-power digital television stations may cause
to other stations. Low-power stations are required to accept interference from and avoid interference to full-power
broadcasters. Certain low-power stations, known as “Class A” LPTV stations, have greater interference protection rights,
and protecting such stations may limit the Company’s ability to expand its television service in the future.
Public Interest Obligations. In November 2007, the FCC adopted new “enhanced disclosure” obligations for
broadcasters. Among other changes, the FCC announced that it will require broadcasters to (i) report on the amount and
type of public interest programming they offer; (ii) make their public inspection files available over the Internet if they have
a website; and (iii) include an on-air notice twice daily that consumers may view the station’s public file on its website.
These requirements will not become effective until they are approved by the Office of Management and Budget (“OMB”).
In July 2008, the FCC submitted only the on-air station notification requirement to the OMB for approval. However,
because the requirement is closely linked to the other requirements imposed in the November 2007 decision, the OMB
refused to review this submission and directed the FCC to resubmit it at the same time that it submits the related provisions
to the OMB. The FCC has not yet done so. Moreover, the FCC is currently considering petitions for reconsideration
regarding the requirements, and it is possible that the FCC could modify the requirements in response to those petitions.
The November 2007 decision also is subject to judicial review in consolidated cases pending before the U.S. Court of
Appeals for the DC Circuit.
In a separate “localism” proceeding, the FCC has requested comment on additional proposals, including (i) its tentative
conclusions to adopt license renewal “processing guidelines” that establish minimum amounts of locally-oriented
programming to be provided by broadcast licensees and to require broadcasters to establish permanent community
advisory boards and (ii) a requirement that a licensee’s main studio be located in its community of license. The localism
proceeding is pending at the FCC. It is not possible to predict what, if any, effect it will have on the Company’s
operations.
Children’s Programming Obligations. Pursuant to children’s programming obligations for digital television that took
effect in January 2007, stations must air three hours per week of “core” children’s programming on their primary digital
video stream and additional core children’s programming if they also broadcast free multicast video streams. Stations
must also complete quarterly reports concerning the core programming that they broadcast. “Core” programming includes
programming that serves the educational and informational needs of children and meets guidelines specified by the FCC,
which generally relate to programming length and time aired. In addition, stations must limit the amount of commercial
advertising that may be broadcast during programming intended for young children.
Carriage of Local Broadcast Signals. Pursuant to the requirements of the 1992 Cable Act, and the FCC rules, a
commercial television broadcast station may, under certain circumstances, insist on carriage of either its analog or digital
signal on cable systems serving the station’s market area (“must carry”). Alternatively, stations may elect, at three-year
intervals that began in October 1993, to forego must-carry rights and allow their signals to be carried only 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. Each of the Company’s television stations is being
carried on all of the major cable systems in the station’s respective local markets pursuant to retransmission consent
agreements.
18 THE WASHINGTON POST COMPANY