Washington Post 2010 Annual Report Download - page 32

children’s programming, on each channel on which they carry one of the top five national nonbroadcast networks. In
addition, cable operators of all sizes must pass through video description that is provided for each broadcast station
or nonbroadcast network that they carry. The act also directs the FCC to adopt rules to help ensure that certain video
programming distributors convey emergency information in a manner that is accessible to persons who are blind or
visually impaired. The Company cannot predict when the FCC will adopt these rules. Complying with the new rules
would impose certain costs on the Company.
In addition, the act requires the FCC to subject devices designed to receive, play back, or record video programming
transmitted simultaneously with sound, such as set-top boxes, to regulations governing (1) the display of closed-captioned
video programming, (2) the transmission and delivery of video description services and (3) the conveyance of emergency
information. Complying with the new rules would impose certain costs on the Company. The Company cannot predict
when the FCC will adopt these rules.
Other Requirements. In February 2008, the FCC issued revised commercial leased access rules that require cable
operators to make a certain portion of their systems’ capacity available to parties desiring to transmit programming via
cable on a leased basis. These revised rules could substantially reduce the rates for parties desiring to lease capacity
on cable systems and also impose a variety of leased access customer service, information and reporting standards.
Implementation of these new rules has been stayed by the courts, and certain of the rules also were rejected by the
Office of Management and Budget (“OMB”) as inconsistent with the federal Paperwork Reduction Act. Certain parties
have requested that the FCC override the OMB ruling, but no action has been taken on that request. The FCC has not
indicated its intent to move forward with implementation of these new rules. If they take effect, however, they likely will
increase Cable ONE’s costs and could cause additional leased access activity on Cable ONE’s cable systems. As a
result, Cable ONE may find it necessary to either discontinue other channels of programming or opt not to carry new
channels of programming or other services that may be more desirable to its customers.
The FCC also regulates various other aspects of cable television operations. Long-standing FCC rules require cable
systems to black out from certain distant broadcast stations the syndicated programs for which local stations have
purchased exclusive rights and requested exclusivity, and to delete, under certain circumstances, duplicative network
programs broadcast by distant stations. The FCC also imposes certain technical standards on cable television operators,
exercises the power to license various microwave and other radio facilities frequently used in cable television operations
and regulates the assignment and transfer of control of such licenses.
Internet Access Services
In 2005, the U.S. Supreme Court upheld the FCC’s classification of cable modem service as an “information service.”
As a result, cable modem service is not subject to the full panoply of regulations that applies to “cable services” or
“telecommunications services” under the Communications Act of 1934, as amended (the “Communication Act”), nor
is it subject to state or local government regulation. In response to the Supreme Court’s decision, the FCC ruled that a
telephone company’s offering of digital subscriber line (“DSL”) Internet access service and a mobile wireless company’s
offering of similar wireless broadband service also are “information services.”
Cable ONE currently offers broadband Internet access service on virtually all of its cable systems and is the sole Internet
service provider on those systems. Cable ONE does not restrict the websites that its broadband Internet access
subscribers may view; however, regulations that distinguish between interference with subscriber access and reasonable
network management are evolving and, over time, could begin to interfere with Cable ONE’s ability to manage its
network or provide services to its subscribers. In 2010, the FCC imposed certain “net neutrality” obligations on providers
of broadband Internet access services. Included among those obligations are requirements that fixed broadband Internet
service providers disclose publicly accurate information regarding their network management practices; refrain from
blocking lawful content, applications, services and non-harmful devices of the end user’s choosing; and refrain from
unreasonably discriminating in the transmission of lawful traffic. Wireless broadband Internet service providers are subject
to fewer regulations, and the application of all such regulations is subject to the broadband Internet service provider’s
ability to engage in reasonable network management. The FCC’s net neutrality rules also establish a process through
which complaints about the network management practices of broadband Internet service providers can be brought.
Congress, from time to time, also has considered whether to impose net neutrality requirements on providers of
broadband Internet access service that would limit the ability of such providers to prioritize the delivery of particular types
of content, applications or services over their networks, or whether to limit the FCC’s ability to regulate such activity.
The FCC’s December 2010 order imposing certain net neutrality obligations on providers of broadband Internet access
services has been appealed, and the Company cannot predict the outcome of this appeal. If the FCC’s order is upheld,
these new obligations could cause the Company to incur certain compliance costs.
16 THE WASHINGTON POST COMPANY