Business/Economy

GCI cable customers may soon lose these 3 TV stations

Alaska's largest telecommunications company may soon no longer broadcast local Fox, ABC or CW channels in its cable packages as a result of gridlocked negotiations with the stations' ownership.

GCI told its cable customers in an email Wednesday that the programming in question is set to go away in January if the parties can't come to an agreement.

"We've made numerous attempts to negotiate with the management of these stations (they're all run by the same individuals) and their representative in the Lower 48, without success," GCI's email to customers said. "We believe they're trying to use their combined reach statewide to force us to simply accept their unreasonable fees and pass the hikes on to our customers."

As a cable provider, GCI regularly negotiates contracts with the stations it carries. With each negotiation, the price GCI pays for content usually goes up, said spokeswoman Heather Handyside. Typically, the programmer proposes an increase between 5 and 20 percent, she said.

In its email to customers on Wednesday, GCI called the proposed hike an "unprecedented increase" that the company was not willing to accept.

"That is why there is the possibility of blackout for those stations," said Handyside.

[Previous coverage: GCI will cut AMC Networks, Univision in 2016]

ADVERTISEMENT

GCI is negotiating with two companies — called Vision Alaska I and Vision Alaska II — that own the stations. Handyside said the proposed increase was 300 percent combined when negotiations began, but is lower now.

Scott Centers, chief operations officer at Vision Alaska II, said a rate increase of 300 percent "is absolutely not correct." He would not say exactly what the proposed change is.

"I would say that it's a number that represents less than 2 percent of what they charge the customer, which also would represent a reasonable return on our investment in the programming," Centers said.

Without new agreements, GCI told customers, the company "will be unable to broadcast" ABC and CW statewide as of midnight Jan. 1, and "may be unable to distribute Fox statewide" as soon as Jan. 15. Fox programming from GCI has already stopped in Juneau and Fairbanks, Handyside said. People can use rabbit-ear antennae to get Fox for free, she said.

On Dec. 23, a post on the website for the three stations urged GCI customers to reach out to GCI about the negotiations. Centers said Fox customers in Anchorage won't be affected by the negotiations, but the stations' website said that Fox customers in Anchorage will be affected.

"(W)e have made numerous attempts to negotiate with GCI for market based rates so that we can afford to bring this expensive programming to you," the stations' website said in a post Thursday. "GCI knows this, but wants us to give them this programming for less than it costs us."

Rates would not go down for customers if the three channels out of hundreds went away, Handyside said. She also said that rates do not typically go up immediately for customers when GCI has to pay more for content.

The Matanuska Telephone Association also sent an email to customers on Tuesday about negotiations with Fox. MTA's agreement with the station expires at midnight Dec. 31.

"If we are unable to negotiate a deal that protects our members, FOX 4 KTBY will pull their channel," the email said. "MTA remains open to reasonable compromises, but FOX 4 KTBY insists on incredible rate increases."

Alaska's local Fox, ABC and CW stations carry programming that includes NFL games, "Grey's Anatomy," "Empire," "Modern Family" and more.

A similar situation happened with two other stations last year. GCI dropped AMC Networks and Univision in 2016, citing price hikes.

Annie Zak

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

ADVERTISEMENT