Washington Post 2015 Annual Report Download - page 32

Reauthorization Act (STELAR), enacted in December 2014, Congress directed the FCC to undertake additional
rulemakings concerning retransmission consent issues. For example, the FCC has adopted new rules required by
STELAR prohibiting same-market television broadcast stations from coordinating or jointly negotiating for
retransmission consent unless such stations are under common control. The FCC also has commenced a
rulemaking required by STELAR reviewing the Commission’s “totality of the circumstances” test for good faith
retransmission consent negotiations. In addition, the FCC has solicited comments on a proposal to eliminate its
network non-duplication and syndicated exclusivity rules. If such a proposal were adopted, cable operators, direct
broadcast satellite systems and other distributors classified by the FCC as multichannel video programming
distributors (MVPDS) might be permitted to import the signals of out-of-market television stations with
duplicating programming during retransmission consent disputes or otherwise. Further changes to the
retransmission consent and/or exclusivity rules could materially affect the GMG stations’ bargaining leverage in
future retransmission consent negotiations, and the Company cannot predict the net effect that such an order
would have. Congress may also pass additional legislation that would affect the must-carry/retransmission
consent regime.
Under STELAR, the statutory copyright license for satellite carriage of distant broadcast television signals was
extended through December 31, 2019. The Company cannot predict whether this distant signal copyright will be
extended again, nor can it predict whether or how Congress may otherwise change the communications or
copyright regimes. The net effect that changes to these regimes would have on the Company’s broadcast
operations, or on the Company overall, cannot be predicted.
Ownership Limits. The Communications Act and the FCC’s rules limit the number and types of media outlets
in which a single person or entity may have an attributable interest. Among other restrictions, the FCC’s local
television ownership rule generally prohibits one company from owning two television stations in the same
market unless there would remain at least eight independently owned full-power television stations in that
market, and at least one of the commonly owned stations is not among the top-four-ranked television stations in
that market. In addition, by statute, a single person or entity may have an attributable interest in an unlimited
number of television stations nationwide, as long as the aggregate audience reach of such stations does not
exceed 39% of nationwide television households and as long as the interest complies with the FCC’s other
ownership restrictions. In April 2014, the Commission released a report and order determining that certain
television joint sales agreements (JSAs) are attributable in calculating compliance with the ownership limits.
Pursuant to the Consolidated Appropriations Act of 2016 through September 30, 2025, the new JSA attribution
standard will not apply to JSAs that were in effect as of March 31, 2014, and any party to such a JSA will not be
considered in violation of the FCC’s ownership rules by reason of the application of the new JSA attribution
standard. GMG stations are not parties to JSAs, but the FCC’s rule change could limit GMG’s ability to enter
into possible transactions in the future.
The FCC also restricts so-called “cross-ownership” of newspapers and broadcast stations within a market.
In April 2014, the FCC released a notice of proposed rulemaking, proposing to retain the local television
ownership rule, seeking comment on a possible waiver standard for smaller markets and proposing a modest
relaxation of the newspaper/broadcast rule. The notice also addresses the FCC’s radio ownership and radio/
television cross-ownership rules, and it asks whether the FCC should require disclosure of shared service
agreements. The proceeding is pending, and it is not possible to predict its outcome or ramifications.
Separately, in March 2014, the FCC released a Public Notice, characterized as “guidance,” that the FCC will
“closely scrutinize” any transaction that involves both a sharing agreement and certain kinds of financial
interests.
Programming. Four of GMG’s five stations are affiliated with one or more of the national television networks,
which provide a substantial amount of programming to their television station affiliates. The expiration dates of
these affiliation agreements are set forth at the beginning of the Television Broadcasting section. GMG’s
17 GRAHAM HOLDINGS COMPANY