Cable provider General Communication Inc. has laid out its case for purchasing three Alaska television stations, responding to a petition opposing the move from several Alaska broadcasters before the Federal Communications Commission.
In a Thursday FCC filing, attorneys for GCI subsidiaries Denali Media Anchorage and Denali Media Southeast say the purchase of Anchorage-based CBS affiliate KTVA-TV, as well as Southeast Alaska NBC affiliates KATH-TV in Juneau and KSCT-TV in Sitka, would serve Alaskan viewers by increasing competition statewide.
“The public-interest benefits of GCI’s proposed ownership of KTVA, KATH and KSCT are simply inescapable,” attorneys wrote.
The four broadcasters that filed the March 1 petition seeking to block or add conditions to GCI's purchase of the stations include:
- KTUU-TV owner Northern Lights Media, Inc.
- Vision Alaska LLC, owner of ABC affiliates KYUR-TV in Anchorage, KATN-TV in Fairbanks and KJUD-TV in Juneau
- Ketchikan TV LLC, owner of Southeast Alaska CBS affiliates KXLJ-TV in Juneau, KUBD-TV in Ketchikan and KTNL-TV in Sitka
- Coastal Television Broadcasting LLC, owner of Anchorage Fox affiliate KTBY-TV
GCI’s response denies claims by the broadcasters that its proposed expansion would give it too much market power, allowing it to bias coverage or reduce distribution of competing stations. It says the purchase wouldn’t create an Alaska monopoly in video services, broadcasting or telecommunications, pointing out that it’s required by the FCC to offer competing broadcasters carriage on its network.
“Each action that the Petitioners implausibly speculate might arise would be contrary to existing FCC regulations, violate private contractual obligations, or go against GCI’s own economic interest,” attorneys wrote. “Perhaps most bizarrely, the Petitioners accuse GCI of ‘news distortion’ before it has produced a single newscast.”
GCI itself accuses broadcasters like KTUU of wielding excessive power in their markets, pointing to Channel 2’s “near-monopoly” news ratings versus those of its competitors.
“At 10 p.m., for example, 41.2 percent of all homes in Anchorage are tuning to KTUU for the news, while the next-best station (KTVA) gets only a 7.6 percent share -- less than one-fifth of KTUU’s viewership,” attorneys wrote. “The disparity is similar in mornings and even more dramatic in early evenings.”
While GCI concedes that KTVA has seen cutbacks to both staff and programming in the past year, the company says it plans to “more than double” the CBS affiliate’s newsroom staff and budget. It goes on to offer a glimpse at its plans for the station, including what it describes as a $17 million investment in the state’s first high-definition news studio.
“(GCI) will expand news content from throughout Alaska, including politics, documentaries, investigative reports, and rural coverage,” attorneys wrote. “It intends to open a news bureau in the State Capitol of Juneau. GCI also intends to add local sports coverage. In addition, GCI plans to bring back ‘beat reporting,’ to ensure comprehensive and expert coverage of areas that are underserved in today’s local news offerings.”
The company also refutes allegations made about former Channel 2 news director John Tracy’s role in the transition, after broadcasters suggested his plans to remain a partner at advertising firm Bradley Reid and Associates may constitute a conflict of interest.
“GCI has engaged Mr. Tracy as an independent contractor to advise GCI on a range of issues related to GCI’s desire to enter the market as a competitive, but inexperienced, broadcaster,” attorneys wrote. “Mr. Tracy is helping GCI to set up a functional newsroom. He will not be in the newsroom, directing copy or writing copy (but even if he were, it would not present a justiciable issue here).”
Attorneys for GCI also say that the petition opposing its action misunderstands Comcast’s 2009 purchase of a stake in NBCUniversal, which broadcasters presented as an analogy for GCI’s Alaska purchases. GCI not only says that Comcast voluntarily accepted restrictions rather than having them imposed by the FCC, as broadcasters claimed, it also claims that the purchases aren’t remotely on the same scale.
“The Petitioners attempt to equate this transaction with the historic Comcast-NBCU merger,” attorneys wrote. “But this relatively minor transaction bears no resemblance whatsoever to the unprecedented merger of the nation’s largest multichannel video programming distributor and Internet service provider with two television networks and scores of television stations, programming channels, and online resources.”
Channel 2 general manager Andy MacLeod took issue with that characterization Monday, saying GCI’s purchase still has similar scope within Alaska. He says KTVA reaches 87 percent of Alaska households through its carriage on GCI and its retransmission via the Alaska Rural Communications Service.
“That’s not a local, little station,” MacLeod said.
MacLeod says GCI’s response doesn’t address what he considers the central charge of the petition -- that the company will seek to reduce competition and create a newscast that serves its "corporate interests" if the FCC allows it to go through with its plans.
Macleod, in a written statement Monday, said GCI's response "failed to address concerns over how top GCI officials laid out their strategy to leverage distribution to obtain a news franchise in discussions with Coastal Television CEO Bill Fielder when trying to buy his stations. In an affidavit, Fielder quoted GCI senior vice president and board of director member Bill Behnke saying the purchases would allow GCI to 'dominate the news market in Alaska, and to impact the content of news by Alaska viewers, assuring viewpoints favorable to GCI's corporate interests'."
MacLeod said "The broadcasters saw no response from GCI or Behnke addressing why the FCC should support a news franchise 'favorable to GCI's corporate interests'. With those questions unanswered, the group of Alaska broadcasters will continue to pursue the matter with the FCC."
“We don’t care if your political interests are liberal or conservative; your corporate interests are financial,” MacLeod said, adding "I support news that develops corporate profits. I do not support news that supports corporate interests"
An appendix to GCI’s filing lists about a dozen conditions on the station purchases proposed to the company by Alaska broadcasters, but rejected by GCI. They include pledges that GCI will support reconstructing ARCS to accept digital signals and won’t let stations it owns or controls affect the company’s carriage negotiations with other broadcasters, as well as a commitment that GCI won’t import those stations' signals into Alaska markets they don’t already serve.
MacLeod says the measures GCI rejected are meant to protect media competition in the state.
“Broadcasters want a level playing field for content and news on which GCI cannot use its monopoly in distribution to force other players off the field,” MacLeod wrote. “The safeguards that ensure that level playing field are included in the FCC's template for cable and content mergers achieved under the Comcast and NBCU buyout, and GCI has repeatedly rejected incorporating them into acquiring the licenses of (the stations).”
Despite the various points of contention brought up in the broadcasters’ petition and GCI’s response, the company says it shares MacLeod’s faith in competition.
“GCI agrees with KTUU’s general manager that ‘more competition makes things better, and we see a rising tide lifting all boats,’” attorneys wrote.
MacLeod says the broadcasters’ rebuttal to GCI’s response will be filed with the FCC by March 29.
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