Parent of KHON, KGMB fights rule
By Andrew Gomes
Advertiser Staff Writer
Emmis Communications Corp. has challenged the rule prohibiting it from owning both Honolulu television stations KHON and KGMB, in a filing made with the Federal Communications Commission this week.
Indianapolis-based Emmis in February also notified the federal agency that it would seek to keep both stations for a year following the outcome of an FCC review of the so-called "duopoly" rule barring ownership of two of the top four stations in one market.
The review is expected to begin later this year. If the rule is upheld, Emmis wants a year from the ruling date to sell one of the two stations.
This is the first time Emmis has attacked the rule in a filing with the FCC. In its 40-page brief, Emmis charged that the two-in-the-top-four standard is arbitrary and inconsistent with other media-ownership rules that count newspapers, radio and cable stations as relevant information sources.
Emmis also argued that it is likely the federal agency will relax or repeal the duopoly rule, thus allowing the company to indefinitely keep KHON, the local Fox affiliate, and KGMB, the local CBS affiliate.
The FCC did not respond to a request for comment Tuesday. Emmis did not comment beyond its filing made Monday and released yesterday.
Emmis has owned KHON and KGMB for almost two years. The company acquired KGMB as part of a multi-station purchase in October 2000, and has repeatedly asked the FCC for more time to sell one of the stations because of what it said has been difficulty attracting sufficient offers.
The FCC twice renewed an initial six-month waiver, and recently gave Emmis three more months until July 1 to divest of either station, reminding the company that it knew it might have to sell one of the stations in a depressed market.
In Monday's filing, Emmis said it would be unfair to force the sale and then change the rule to allow Emmis to keep the station it just sold.
But Sean McLaughlin, a media reform advocate who is also president and chief executive officer of Akaku-Maui Community TV, said that argument is moot. "That (rule) was the reality when they acquired the station," he said. "It was factored in the price they paid."
McLaughlin also took issue with Emmis' claim that allowing continued ownership of KGMB and KHON would not create significant harm to viewers or competitors.
"The duopoly rule helps ensure multiple independent sources of local news and information," he said. "Emmis' continuing media duopoly represents one less independent voice serving Hawai'i."
Emmis said in the filing that economies of scale provided by dual ownership can result in stronger stations and improved service to the public, and that enforcing the scheduled divestiture deadline would eliminate potential benefits.
Mike Rosenberg, president and general manager of KITV, the local ABC affiliate, said Emmis' dual ownership has afforded his rivals new competitive advantages.
He cited plans by KHON to transfer its highly popular game show "Jeopardy," which airs weekdays at 5 p.m., to KGMB so KHON can launch a 5 p.m. newscast July 1.
"If they weren't running both television stations, they wouldn't have that opportunity," he said. "Or it would be much more difficult to do so."
Bill Spellman, vice president and general manager of KHON, said the station could have sold "Jeopardy" to KGMB as a competitor if the station weren't owned by Emmis, but acknowledged the deal was easier with the same parent company.
He also said the sister stations have realized some small operating efficiencies, like sharing a video file server, "but really nothing terribly significant so far, and that's because we've been operating the stations with totally separate management teams. We don't know how this is going to turn out."
Reach Andrew Gomes at firstname.lastname@example.org or 525-8065.