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KTUU Rural Carriage: Frequently Asked Questions

Published On: Nov 17 2013 01:26:49 AM AKST
Updated On: Nov 17 2013 10:56:00 AM AKST

Frequently Asked Questions:

GCI has pulled NBC and Channel 2 News programming from rural Alaska on 8 GCI systems and also 13 small non-GCI systems.


What is the latest information in the ongoing rural Alaska carriage negotiations between KTUU-TV and GCI Cable?

GCI and KTUU-TV have discussed continuing negotiations.  http://www.ktuu.com/about/ktuutvs-last-offer-to-gci-before-rural-alaska-blackout/-/21044658/22992632/-/13cmptmz/-/index.html

Why was KTUU-TV pulled if it offered “free” carriage to GCI through the end of 2014?

Only GCI can answer that question. GCI has stated it because of “costs” the telecom/cable operator has in delivering the signal to rural cable systems. That argument belies the fact that CHARGES subscribers for that signal every month.

Why is rural Alaska being tied now to carriage for the Anchorage area for 2015 and beyond?

GCI has stated it wants a deal that covers both rural Alaska and the Anchorage area for 2015 and beyond. While the parties came within pennies of each other for a four-year agreement before GCI pulled the plug Nov. 8, after GCI demanded concessions that would have hobbled KTUU-TV’s ability to compete against the newly acquired broadcast stations that GCI has bought in Alaska, KTVA and KATH and KSCT in Anchorage, Juneau and Sitka respectively.

Does GCI’s entry into the TV business have anything to do with this blackout?

Of course it does. GCI does not want to compete with KTUU-TV and its Channel 2 News product on a level playing field. So it is using its monopoly position in cable and telecom in Alaska in an attempt to hobble KTUU-TV and win the viewers’ choice by default. Simply put, if KTUU-TV is not a choice because GCI pulled it from the lineup, then GCI owned KTVA CBS news and GCI’s newly acquired Juneau NBC affiliate will be the only choices rural Alaskan GCI subscribers will get in news, information and entertainment. Rural Alaska also is served by ARCS programming, which carries some Channel 2 News and NBC entertainment. Click here to see the ARCS schedule http://www.arcstv.org/


What is carriage and how does it work?


To serve viewers who use a pay TV provider, KTUU-TV licenses the rights to carry our signal to cable companies like GCI Cable. These kinds of agreements are common throughout the United States and normally are reached without any disruption of service.


What communities are affected?


Communities affected are: Barrow, Bethel, Cordova, Kodiak, Kotzebue, Nome, North Slope, Valdez, Adak, Akutan, Anaktuvuk Pass, Whittier, Galena, Unalaska, King Salmon, Kaktovik, McGrath, Nikolski, Chugach McKinley, Skagway, and Tanana.

How does this affect Juneau and southeast Alaskans?

KTUU-TV provides all its Channel 2 News casts to KATH and KSCT, the NBC affiliates in Juneau and Sitka on an agreement with the former local owners that dates back over a decade.  GCI has demonstrated no willingness to pursue a similar business relationship, as its actions taken against rural Alaskans prove. The deadline for southeast losing access to Channel 2  News is Friday, Nov. 22..


Will Juneau and southeast still get NBC programming without Channel 2 News if GCI pulls the carriage?

Yes. GCI owns both KATH and KSCT and has an NBC license for those stations.

If I live in rural Alaska what are my alternatives?

In rural Alaska, you can cancel GCI cable and seek alternative delivery that includes KTUU-TV’s full lineup of NBC and Channel 2 programming. Those alternatives include Dish Network and DirecTV satellite TV. Microcom in Anchorage sells and installs both services and can be reached at 1-877-696-3474 or www.microcom.tv

Much of KTUU-TV’s newscasts and some of NBC’s entertainment and sports programming is carried on the composite Alaska Rural Communication System (ARCS) and that lineup can be found listed at www.arcstv.org

For Channel 2 News, you can also download the free Airwave app on iOS or Andriod devices. The app streams Channel 2 News newscasts and stores them for five days in the cloud for video on demand.

If you stay with GCI, tell them to lower your bill for the content you have lost. KTUU-TV is typically the most-watched channel in most Alaska households. You should not be paying for a service you are not receiving.

You can also contact the Alaska Congressional delegation and the FCC along with the Attorney General of the state of Alaska and your local lawmakers if you believe you are being treated unfairly and not given the same access and rights as urban Alaskans, especially in regards to receiving an independent news source.

Those addresses are listed at the bottom of the next page:

You can learn more about how consumers in the lower 48 are dealing with similar cable pricing issues by viewing this Wall Street Journal article on the matter: Customers Say to Cable Firms, “Let’s Make A Deal” http://online.wsj.com/article/SB10001424052970203479104577124494272500550.html

If I live in Juneau and southeast, what are my options?

Unless you receive ARCS there, there are none since GCI now controls NBC for southeast and can decide what news you receive.

When is the deadline and will the Anchorage area be affected?

Anchorage and south central Alaska are under an agreement through Sept. 30, 2014.   



How does all this affect my monthly cable bill, which is already too high? Will it go up even more if GCI reaches an agreement with KTUU-TV?


Your cable will not go up in 2014 based on any agreement KTUU-TV reaches with GCI. What will happen after 2014 depends on a variety of factors, but it is GCI that has sole discretion to raise or lower your bill. Programming costs are going up in the Pay TV business as are the costs faced by content companies like KTUU-TV of obtaining and generating programming. KTUU-TV has offered to provide its program feed to GCI for free through the end of 2014, and then will be asking for only pennies a day for the most watched programming on GCI cable. By comparison, independent Nielsen data indicates that GCI already pays far more for less popular content.


GCI says it spends over $1 million a year to put signals from broadcasters up on a satellite for delivery to rural Alaska and that it cannot afford to pay that delivery cost. Is that true?

Let’s do some basic math to estimate an answer:


I. GCI’s 2012 SEC filing states it earns revenue from the average monthly video subscriber of $77.98


II. GCI has about 7,000 residential subscribers on its rural system and an additional 3,000 subscribers on North Slope oil fields. That is 10,000 subscribers in total. However, based solely on the 7,000 primary residential subscribers, we can conservatively estimate that GCI earns 6-7 million dollars serving these viewers.


III. GCI also has other revenue from the uplink, which is part of video revenues that GCI reported to be $115 million in 2012. Its total revenues were reported to be $720 million that year. As you can see, GCI has a very profitable business in rural Alaska, and its satellite costs are a small expense against the revenues it generates there. (For comparison, the revenue from all the commercial broadcasters in Anchorage, Fairbanks and Juneau combined would not add up to 10 percent of GCI’s total revenue).

Math aside, the reality is that GCI will save nothing in 2014 by pulling KTUU-TV as it will have to replace KTUU-TV with another signal. Further, you can learn more about the costs GCI alleges it has at  http://www.ktuu.com/about/ktuutvs-last-offer-to-gci-before-rural-alaska-blackout/-/21044658/22992632/-/13cmptmz/-/index.html


GCI has stated that KTUU-TV wants $2 million for its carriage rights. Is KTUU-TV being greedy by looking for such payment?


By its offer to allow free carriage of its signal in rural Alaska through 2014, KTUU-TV has offered GCI a way to continue complex business negotiations for 2015 and beyond without impacting customers. The companies have not reached a final deal and it is premature, to say the least, to speculate about what those final terms may be. For its part, KTUU-TV remains willing to negotiate in good faith, but it expects GCI to join that effort as well.  GCI says that it has never paid to retransmit a local broadcast signal.  That makes it almost unique among US cable operators.  That is only because of GCI’s monopoly position in video, broadband and wireless in rural Alaska and the size of the family owned and small corporations that make up the bulk of Alaska broadcasting.

Let's be clear: GCI has been charging customers for local broadcast stations for years and keeping 100% of that money. KTUU-TV spends millions of dollars each year to bring Alaskans more than 22-hours of local news per week. Additionally, KTUU-TV incurs costs to bring viewers public affairs, network and syndicated entertainment programming. KTUU-TV is simply asking for a fair price for the valuable content it creates, which is among the most-viewed on GCI's lineup.


Why does this dispute just affect KTUU-TV?


All local television stations negotiate independently and may be on different timetables.


How do I get in contact with some one at GCI?


In Anchorage, 907-265-5400 and 1-800-800-4800 Statewide.


Who can help me get the programming I pay for and ensure that NBC and Channel 2 News continue to come into my home in rural Alaska:


Senator Lisa Murkowski
709 Hart Senate Building
Washington D.C. 20510


PH 202-224-6665
www.murkowski.senate.gov


Senator Mark Begich
111 Russell Senate Office Building
Washington, D.C. 20510

PH 877-501-6275
www.begich.senate.gov


Congressman Don Young
2314 Rayburn House Office
Washington, DC 20515

PH 202-225-5765
www.donyoung.house.gov


William Lake
Chief, FCC Media Bureau
445 12th Street, SW
Washington, D.C. 20554


Attorney General Michael C. Geraghty
P.O. Box 110300
Juneau, AK 99811-0300

PH 907-465-2133
Attorney.general@alaska.gov
 

  • (Copyright © 2013, KTUU-TV)