Washington Post 2011 Annual Report Download - page 29

adopted certain modifications to its set-top box and CableCARD rules, which included extending the relief previously
provided to Cable ONE to all cable operators nationwide. While this change should facilitate the availability of low cost
set-top boxes, other changes adopted by the FCC that impact how cable operators bill for set-top boxes and the types
of CableCARDs they must deploy could increase operational costs for such operators. Also in 2010, the FCC initiated a
broader regulatory proceeding to consider whether it should require all multichannel video program distributors, which
include cable operators, to develop and provide a new, universal set-top box solution that allows access to both online and
traditional video. The Company cannot predict whether, how or when the issues raised in this proceeding will be resolved.
Disability Access. In September 2010, Congress passed the Twenty-First Century Communications and Video Accessibility
Act (CVAA). This act directs the FCC to impose additional accessibility requirements on cable operators. For example, pursuant
to CVAA, the FCC has reinstated the video description regulations that the FCC had adopted in 2000 (which had been
invalidated on appeal), with certain modifications specified in the act. Thus, cable operators that serve 50,000 or more
subscribers must provide 50 hours of video description per calendar quarter during prime time or on 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.
Compliance is required by July 1, 2012, and will impose certain costs on the Company. 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. Compliance
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. Compliance with the new rules would impose certain costs on the Company. The FCC has established an
effective date of January 1, 2014, for the closed-captioning portion of these rules, and compliance will impose certain
costs on the Company.
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 some of the rules were rejected by the Office of
Management and Budget (OMB) as inconsistent with the U.S. 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. Proposals to amend or repeal certain of these rules are pending before the FCC, but the
Company cannot predict whether, how or when the Commission will act on these proposals. 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 Internet service as an “information service.” As a result,
Internet service is not subject to the full panoply of regulations that applies to “cable services” or “telecommunications
services” under the Communications Act, nor is it subject to state or local government regulation. In response to the U.S.
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
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