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Battle over channels

FCC could make initial ruling by late March

Posted: March 10, 2013 - 12:05am
Rik Pruett, Production & Operations Manager for KATH-TV, checks over his video camera at their downtown station on Friday.  Michael Penn / Juneau Empire
Michael Penn / Juneau Empire
Rik Pruett, Production & Operations Manager for KATH-TV, checks over his video camera at their downtown station on Friday.

Should the FCC approve a deal between GCI and local NBC affiliates KATH and KSCT, some Southeast viewers could see a switch-up of their current NBC feed.

However, a majority of Alaska’s broadcasters, including licensees of local affiliates KTUU and KJUD, have filed a petition with the Federal Communications Commission to either deny the purchase or to impose criteria that would force GCI to play nice with Alaska’s content providers.

“We and the other Alaska TV operators want the license transfer for KTVA in Anchorage and KATH in Juneau and its Sitka sister station, KSCT, to have conditions that guarantee a level playing field in television and news.” Andy MacLeod, general manager for KTUU, said.

GCI is required to respond to the petition by March 15. The FCC will then make an initial ruling, which could come as early as March 22, MacLeod said.

“If they accept our petition,” MacLeod said, “Then the process goes on for some time, minimally six months.”

General Communications Inc. announced in November 2012 its intent to purchase two NBC stations in Southeast Alaska and Anchorage CBS station KTVA channel 11, through its subsidiary Denali Media Holdings.

On the panhandle, GCI plans to purchase low-power NBC stations KATH-TV and KSCT-TV from North Star Television Network. Dan Etulain established Juneau’s KATH in 1998 as a sister station to his Sitka-based KSCT.

KATH-TV can be found over the air in downtown Juneau and Douglas on HD digital channel 5, UHF Frequency 35, and on GCI HD cable channel 652 and GCI cable channel 15.

GCI President Ron Duncan has said his company intends to turn the three stations into industry leaders of statewide news and entertainment.

But before this can happen, GCI must win approval from the FCC.

“The key issue for us at this point is our reply comments, [which] are due next Friday,” David Morris, spokesperson for GCI, said.

In his dealings with the FCC and the media, Morris said he would not go “tit for tat” on comments laid out in the petition, which he said “range from skewed to outright wrong.” The petition as a whole he said is “pretty outrageous.”

“At the heart of this you have television companies that have a potential new interest coming into the market,” Morris said — an interest with a vision “and (that) is committed to provide resources to make that happen. It is not unlike any other industry that we have interest in where the incumbents file protests saying that a lot of bad things will happen.”

GCI plans to start with standard television broadcasts, Morris said. As time goes on, the company may add online features where there may be cross platform advantages. Morris gave the example of a customer missing a preferred show.

“If you want to watch the news at 6 p.m. but don’t get home until 6:30 p.m.,” Morris said. “You could download a video of that broadcast and watch it from the top.”

Television broadcasts made available through internet-connected computers, and more and more, broadband data phones is where the industry is going, Morris said.

“People are consuming information differently,” Morris said. “You have to accept that fact.”

There is a fight going on between distribution companies that own the transmission infrastructure, and the businesses that own the content transmitted over this infrastructure, say, GCI’s cable network. The concern of content providers is when a distribution company owns a content company it may give preference to its own data over competitors when managing traffic on its network.

However, this on only a small part of the petitioners’ concerns. Some have said that GCI’s distribution monopoly would only strengthen with the addition of three television stations. And that it would use this monopoly to promote certain views in its news service.

Morris disagrees with this assumption.

“It is in our interest that we make a television product that people want to watch,” Morris said. The idea that GCI could broadcast only the information and messages it wanted “is insulting to Alaskans,” he said. “If GCI is skewed, you can always change the channel.”

Whether or not the permit proceeding will delay GCI’s plans for its new stations remains to be seen. However, Morris said the company had hoped the transition would take place in the second quarter of 2013. He said changes to the stations’ broadcasting would not roll out until the third quarter.

“We never anticipated that it would be a quick change for the viewership,” Morris said. And delays could pile up as the petition to deny goes through the FCC bureaucracy, he said. “It is going to take as long as it takes.”

GCI financials released Wednesday show that the state’s largest cable provider had revenues in 2012 of more than $710 million — up 4.5 percent from 2011.

GCI also owns the TERRA-Southwest broadband network that serves Southwest Alaska and a sister project that would extend service to Kotzebue. Sales of broadband service on the network in 2012 increased the company’s managed broadband revenues by 36.9 percent to $86.6 million.

GCI controls 70 percent of consumer broadband internet connections and its cable service is subscribed to by 45 percent of the state.

It is this domination of Alaska’s communications market that concerns the Alaska broadcasters who filed the petition.

Alaska lacks television markets for 144,000 of its residents, mostly rural, including Southeast Alaskans outside of the greater Juneau market. In these areas GCI would not be required by the FCC to transmit its competition’s content – meaning some Southeasterners would see their NBC stations switched, according to the petitioners.

Currently, Anchorage stations provide distribution to much of the state’s non-television markets. The feed for Sunday night football in Nome would come from Anchorage. If GCI acquires KTVA in Anchorage, KTUU would not longer provide content to Nome, Scott Centers, manager of Coastal Television Broadcasting LLC, said.

"You will be watching the GCI signal," Centers said.

Currently, Juneau receives its NBC feed from KTUU. Centers said he doubts that would last.

"Do you think that will happen with GCI owning an NBC station there?” Centers asked.

Coastal owns ABC affiliate KJUD-TV and FOX in Juneau. It is one of four station licensees to sign the petition, along with Vision Alaska I LLC and Vision Alaska II LLC, Ketchikan TV LLC and Northern Lights Media, Inc. owner of KTUU.

Centers said comments from GCI heads indicated to him that the larger company means to push him out of the news business.

“I was like you have got to be kidding me,” Centers said. "The acquisition hasn't changed my business model."

“What could change for me directly?” Centers said. “In Southeast Alaska, [for] communities that are outside of the Juneau television market, my signal would no longer be carried there. The three television markets [Juneau, Fairbanks and Anchorage] have to carry us. But outside of that they don’t. That is my biggest concern.”

However, Centers said if the FCC agrees to the petition’s criteria “you wouldn’t see that much change.”

“If there are no conditions, then they pretty much control the distribution,” Morris said. “They are the only transport company, the only cable company.”

Dropping Root Sports and its coverage of Mariner’s baseball in 2012 is an example of GCI’s ability and willingness to control what a large majority of Alaskans do and do not see, Centers said.

“It is an example of what GCI could do to other stations,” Centers said.

In response to the critique, Morris had this to say.

“I’ll be interested to see where it is wrong. I’ll be interested to see where he thinks it is outrageous.”

Juneau-based KTOO was not available to reply to questions by deadline.

• Contact reporter Russell Stigall at 523-2276 or at russell.stigall@juneauempire.com.

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