Single ownership of local TV stations to be evaluated

By David Butts
Advertiser Staff Writer

Federal regulators relaxed decades-old rules restricting media ownership yesterday, but left unclear whether Honolulu television stations KHON-2 and KGMB-9 will be allowed to continue under a single owner.

Media companies argued that existing ownership rules — some dating to the 1940s — were outmoded in a landscape that has been substantially altered by cable TV, satellite broadcasts and the Internet.

Critics say the eased restrictions would likely lead to a wave of mergers, putting a handful of media companies in control of even more of what the public sees, hears and reads.

The decision appears to make it more likely that KHON, the Fox affiliate with the top-rated local news, and KGMB, the CBS affiliate, will remain jointly owned by Emmis Communications Corp., an Indianapolis-based company. Emmis has owned both stations for more than two years under temporary Federal Communications Commission exemptions.

The decision also makes it possible for the owner of a newspaper to buy a television station in the same market, or vice versa.

The FCC said it will "evaluate on a case-by-case basis" situations such as the KHON and KGMB ownership. But given that the FCC has granted Emmis three exemptions under the old, more limiting ownership rules, it seems likely the FCC will let Emmis continue to run the two stations.

"It sounds better for Emmis than it did on Friday," said Mike Rosenberg, general manager of ABC affiliate KITV-4.

Rick Blangiardi, the general manager of KHON and KGMB, said he could not comment on the decision. Kate Healey, an Emmis spokeswoman in Indianapolis, said: "We need to look at the rules. It's too soon to say how it will impact the Hawai'i market."

Rosenberg said if KHON and KGMB remain combined, it will make it tougher for other stations, including his, to compete. He expects KHON and KGMB would combine back office operations, parts of their news operations and advertising efforts.

"We are going to be a single station selling against two duopolies," Rosenberg said, referring to the KHON-KGMB combination and joint-ownership of KHNL and KFVE.

"It's good news for media owners and speculators, like Emmis. It is bad news for the public, or consumer of media," said Sean McLaughlin, a member of the Honolulu Media Council and CEO of Akaku: Maui Community Television. The council, a citizens' group that discusses local news media issues, has opposed the relaxation of the FCC rules.

The FCC also largely ended a ban on joint ownership of a newspaper and a broadcast station in the same city. The provision lifts all "cross-ownership" restrictions in markets with nine or more TV stations.

"That's the most likely outcome of the rule (for Hawai'i)," said McLaughlin. "One or both newspapers will buy a TV station. The issue is how far will they go. Will a newspaper buy both of Emmis' properties? Who knows where that is going to go."

Executives of The Honolulu Advertiser and Honolulu Star-Bulletin declined to speculate on whether they would be shopping for a local television station.

"It's too early to say what impact there will be," said Dennis Francis, general manager of The Advertiser. He added: "The convergence of TV and newspaper under one owner will ultimately provide for better and more comprehensive local news reporting for both."

The Advertiser is owned by Gannett Co., one of the companies that is in a position to benefit from the relaxation of the cross-ownership rule. The company owns 100 newspapers and 22 TV stations and has said in the past it would seek out new businesses only in markets where it makes economic sense.

Frank Teskey, publisher and president of the Star-Bulletin, said, "I'm not going to speculate" on the impact of the decision.

The Associated Press and the Washington Post contributed to this report.