GCI Buys 3 Southeast TV Stations, With Big Ambitions

It turns out those purchases were just the beginning. This month (12-12-2013), GCI announced plans to buy three more TV stations in Southeast Alaska.

If approved, the deal could mark a new era in Alaska media.

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GCI plans to buy all three CBS affiliates in Southeast Alaska:  KTNL in Sitka, KXLJ in Juneau, and KUBD in Ketchikan. The announcement comes just weeks after GCI won federal approval to take over the two NBC affiliates in Southeast — KSCT in Sitka and KATH in Juneau – as well as KTVA, the CBS affiliate in Anchorage.

The newest deal must be approved by the Federal Communications Commission. If it is, GCI will own most of the commercial television stations in Southeast Alaska.

Operating broadcast stations represents a totally new business for GCI.

“GCI has traditionally been in the pipeline business,” said GCI corporate vice president and spokesman David Morris. “Which essentially means we were transporting [signals], either people’s phone calls or internet or cable TV.”

GCI is the state’s largest cable TV operator, and also provides internet, telephone, and cell phone service.

In other words, until now, GCI ran the plumbing. The purchases this fall represent the company’s first major foray into what runs through that plumbing — content.

The company hopes to leverage its technical expertise, dominant infrastructure and deep pockets to transform how Alaskans consume media, Morris said.

“That’s the vision: to be able to access information when you want it and where you want it,” Morris said.

That might mean eventually being able to access all GCI content on your TV, computer or phone, on demand.

“The thinking is, if you’ve got a video-on-demand product, if you get home at 6:15pm and you want to watch the news from the beginning, you can actually just go to your video-on-demand and back it up to start of the news,” Morris said. “If you see your kid on there, on the news and you want to see it again and again, you can back it up.”

GCI’s first step will be to convert programming on its stations to high definition, Morris said.

So far, however, GCI’s purchase has meant a programming change for customers across Alaska. On December 7, viewers across Southeast lost access to Channel 2 News, the state’s highest-rated television news program.

Sitka resident Sabra Jenkins is among those frustrated by the change.

“I’ve gotten to depend on it,” Jenkins said. “And now that I don’t have it, I’m really seriously thinking of not keeping my TV anymore.”

Channel 2 News is produced by Anchorage NBC affiliate KTUU. It was carried on KSCT in Sitka and KATH in Juneau before GCI purchased those stations.

But for months, GCI has been locked in a fight with KTUU over the terms of carrying Channel 2 programming on the stations as well as on GCI Cable.  Now KTUU’s morning and evening news shows – about 22 hours of programming each week  — are no longer broadcast in Southeast.

In early November, when the two companies could not agree on a contract, GCI also took Channel 2 off cable in several parts of rural Alaska, leaving about 7,000 viewers with no NBC programming, except what’s carried on the state-operated channel known as ARCS.

The disagreement centers on what would happen if KTUU ever acquired another station. GCI says KTUU’s demands would double the cost of carrying the signal; KTUU says the cable company is trying to limit its future growth.

Some say there’s a larger issue at stake. KTUU was part of a coalition of stations that petitioned the FCC to deny GCI’s station purchase in the first place.

“The concern has always been that they would leverage that distribution system, their cable operation, to squeeze out broadcasters,” said Brad Hillwig, marketing director at KTUU. 

Whether it’s intentional or not, Hillwig said, that seems to be what’s happening.

“You see then, some of the things that [we] were originally concerned about, perhaps taking shape,” Hillwig said.  “With GCI…restricting access to Channel 2 on its cable systems, coinciding with its launch of its own news product.”

GCI subsidiary Denali Media Holdings is in the process of launching a news program on KTVA in Anchorage, to compete with KTUU’s Channel 2 News.

GCI’s David Morris says the cable company will happily put Channel 2 News back on the air as soon as the companies sign a contract. For now, however, it’s unclear when — or if –that will happen.

But there’s one thing on which everyone agrees.

“It’s changing times in Alaskan media,” Hillwig said.