State backs GCI in battle for Anchorage TV station

The battle over the sale of Anchorage television station KYES continues.

Atlanta-based Gray Television Licensee LLC and Anchorage-based Fireweed Communications LLC lashed out at the Alaska Department of Law last week after the department said in a Federal Communications Commission filing that the state has "serious concerns" about the negative effects of the proposed sale of KYES -- currently owned by Fireweed -- to Gray Television Inc.

Attorneys for Gray and Fireweed said in a letter to the FCC that the law department's wary comments about the sale were spurred on by the political influence of Anchorage-based telecommunications giant GCI, which owns KTVA. The department said that's false.

In September, Gray announced its plans to buy Anchorage NBC affiliate KTUU. That was part of a $442.5 million purchase of all TV and radio stations owned by Indiana-based Schurz Communications Inc., pending FCC approval. In October, Gray announced plans to buy KYES for $500,000.

GCI filed a formal objection to the KYES sale in mid-November, saying the move would limit competition in the Anchorage market.

FCC rules prohibit a company from owning more than one high-power TV station in a small market, such as Anchorage. Gray is applying for a "failing station" waiver from the FCC for KYES -- which would lend an exception to the one-station rule.

Shortly after GCI's opposition, the Department of Law urged the FCC to make a careful examination of the proposal.

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"The state has serious concerns about this proposed assignment and the potential for significant negative effects on competition in the small Anchorage (designated market area)," wrote Ed Sniffen, the state's chief assistant attorney general. "Competition is fragile in the Alaska broadcast market. With limited players, a small population and geographic challenges, we strive to keep all the competition available whenever possible."

Now, Fireweed and Gray are accusing the law department of doing GCI's bidding.

"GCI's immense influence in the Alaskan political sphere is (shown) by its apparent ability to enlist the Alaska AG on its behalf to express concerns about Gray's proposed acquisition of KYES-TV," attorneys for Fireweed and Gray wrote in an FCC filing on Dec. 11.

Sniffen said that any implication of GCI's influence in the AG's decision to look at the sale was untrue, and that the office is simply doing its job of looking into any possible antitrust issues.

"Of course that's not correct," Sniffen said. "We do an independent evaluation of these things to determine whether there's an issue."

The law department didn't formally object to the sale of KYES to Gray.

GCI spokesman David Morris said the company's opposition to the potential sale is based on the FCC's high-power station ownership rule.

"I think this is just an Outside company trying to get what they want," he said, "and it doesn't appear to matter if they shirk the reputation of some folks who work pretty hard for this state."

Recently, GCI has rallied for the support of other groups on a solution to the state's fiscal crisis. As is true for many companies, the state's economy has big implications for GCI.

Gray Senior Vice President Kevin Latek said the company wants to buy both KTUU and KYES to have an opportunity to provide a wide variety of programming, and wants to purchase KYES partly to pull the network out of its financial troubles.

"It's a chance for more investment in the community," he said. "At some point, we'll hopefully add a local newscast to the station."

Annie Zak

Annie Zak was a business reporter for the ADN between 2015 and 2019.

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