Negotiations continue in dispute between KTUU and GCI

The dispute between KTUU and General Communications Inc. was continuing Nov. 20 with another deadline looming.

Anchorage-based KTUU’s programming went off the air Nov. 9 in nearly two dozen rural Alaska communities where GCI is a cable provider, and if the two parties don’t reach an agreement by Nov. 22, certain Southeast Alaska stations will also lose KTUU’s news.

GCI recently purchased KATH and KSCT in Juneau and Sitka, both NBC affiliates. Previously, the two stations rebroadcast KTUU’s signal under an agreement with that broadcaster, which is also an NBC affiliate.

Despite discussions that began last spring when the transaction was still in the works, as of press time Nov. 20 KTUU and GCI had not reached an agreement, according to GCI spokesman David Morris.

“Right now, there’s a chance that the KTUU news signal and syndicated programming will stop on Saturday (Nov. 23),” Morris said.

Morris said the two Southeast stations would still broadcast other NBC national programming, but would not have KTUU’s Alaska news.

KTUU Marketing Director Brad Hilwig said his company wants to reach an agreement with GCI, and is working on finding suitable terms. The new ownership makes changes to the agreement necessary for KTUU, and Hilwig said an agreement could take until the end of the day Nov. 22.

GCI also purchased a station in Anchorage, KTVA, and has said that it plans to continue producing a newscast there, and will likely start creating its own programming in Southeast eventually.

Morris said that the Southeast programming is a leverage point for KTUU in the negotiations about rural Alaska carriage, but isn’t actually related in any way.

The two companies are also negotiating an agreement that Morris said ended Sept. 30. Under that agreement, GCI broadcast KTUU’s programming in rural Alaska, including Nome, Barrow, Kotzebue and Valdez. The old agreement had the two companies exchanging services — GCI was able to carry KTUU’s programs, and KTUU was distributed in rural Alaska, upping its viewership numbers — but that is up for negotiation and they have not been able to agree on terms.

The Anchorage area is not part of the disagreement, and is under a separate must-carry agreement.

When negotiations began, Morris said that KTUU came to the table with a more significant ask than in the past — the company wanted payment for broadcasting its signal, rather than just exchanging services.

The negotiations are part of the regular cycle of contracts for broadcasters and cable companies, and Hilwig said KTUU’s ask was in line with market rates and a reasonable request.

Morris said whether or not a new agreement would result in changed rates for customers would depend on how negotiations end, but that if GCI paid KTUU, it could set a “precedent that’s hard to come back from” with other providers asking for contract changes as well.

KTUU’s final offer before negotiations ended Nov. 8 would have allowed the current contract to continue through 2014, with the changes to set-in during 2015.

But Morris said his company couldn’t agree to that because it needs comprehensive, long-term agreements.

“It’s not easy to just piecemeal this issue out,” Morris said.

Hilwig said the two companies have come closer on the economic issues in the dispute, and are now focused on other issues.

The two companies can’t agree on whether or not KTUU will remain the only NBC affiliate broadcast in rural Alaska, if GCI will broadcast a signal for KTUU in high definition and if KTUU will have a secondary channel.

According to KTUU, those issues came up in part because GCI attempted to change KTUU’s role in the market and sought changes that could be beneficial to GCI under future rule changes.

The contract changes also could have changed the playing field in the competition to get viewers for both companies’ news programs.

“The constraints GCI sought for a carriage agreement from KTUU-TV focus on speculative potential future developments and regulatory changes, and had nothing to do with the economics the two parties worked to bring within pennies of each other,” wrote KTUU’s President and General Manager Andy MacLeod in a letter to rural Alaska legislators.

Molly Dischner can be reached at [email protected].

11/20/2013 - 12:02pm