FCC ordered to consider de-reserving the sister station of WQED-TV, Pittsburgh

Originally published in Current, May 13, 1996

By Steve Behrens

George MilesCongress has directed the FCC to expedite consideration of WQED's plan to sell off its second public TV channel in Pittsburgh to relieve the pubcaster's "financial distress."

Pennsylvania legislators came to the aid of the station, which is carrying a $10 million bank debt from losses in recent years, and inserted the mandate in a major budget bill passed by Congress April 25 and signed into law by the President.

The provision, tacked onto a paragraph about FCC salaries and fees, directs the commission to decide within 30 days of WQED's request whether to strip the UHF channel, WQEX, of its noncommercial reservation. The commission may solicit comments "as it deems necessary" but decide "without rulemaking or other proceeding."

WQED President George Miles says he'll probably file the request by June 1 and says it has "a good chance" of approval. "We have to demonstrate financial distress; I don't think that's an issue."

Steven Lerman, WQED's Washington attorney on the case, expects the FCC "will take the sentiment of Congress into account."

Congress is letting the FCC decide whether selling off the UHF channel will best serve the public interest, however, and WQED's view probably will be contested.

Miles argues that WQED's survival is at stake. "If we don't figure out how to resolve our financial problems, you could be without public broadcasting in Pittsburgh," he says. If sold to a commercial broadcaster, the channel would be expected to cover WQED's debt and leave tens of millions that Miles says he would put into an endowment.

"We're looking at everything to position this institution for the long-term," he says. "We want to be one of the strongest local licensees, and produce strong national projects."

Though WQED would lose one channel of distribution capacity for the near future, it will have multiple channels when TV broadcasting switches to digital transmission in coming years, Miles says.

Media activists say that selling WQEX is not in the public interest, and the FCC shouldn't let Miles and his organization decide whether to sell the channel.

"It isn't theirs, it's the public's," says Jeff Cohen, executive director of Fairness and Accuracy in Media (FAIR), the progressive media watchdog group. "We look at the measly few noncommercial licenses as something that have to be protected like the crown jewels. You don't start selling them off."

FAIR aired an alert about the WQEX issue during its weekly public radio program Counterspin earlier this month. Local media activist Jerold Starr, director of the WQED Accountability Project, said he would oppose the sale of WQEX, which will narrow the range of programs aired in town.

"It's a shame that WQED has used backroom politics to sell off a community asset which has been entrusted to them to be held in the public interest, not for their own self-aggrandizement," said local communications lawyer Frederick Polner in a Pittsburgh Post-Gazette interview.

First of many?

If WQED persuades the FCC to give its okay, the station sale may become the model for similar revenue-generating moves in other cities. Public TV leaders nationally have come to the consensus that licensees with dual stations can sell off one of them and keep the proceeds, according to David Brugger, president of America's Public Television Stations. WQED's Miles has backed the idea as chairman of APTS. A version of the proposal has also been included in drafts of Rep. Jack Fields' pending bill on future funding of public broadcasting.

Miles came to Pittsburgh in September 1994, after the big producing station's revenues fell behind its spending, leaving it in debt. Miles worked on the bottom line--he aims to end the losses and finish this year without a budget deficit--while hiring the D.C. lobbying firm Dutko & Associates last September to make it possible to sell WQEX.

With the help of Dutko and WQED Board members, the station won the support of both of Pennsylvania's senators and several congressmen. Sen. Arlen Specter (R) and Rep. John Murtha (D) were on the conference committee handling the appropriations bill last month, and were able to insert the provision even though it had not appeared in House or Senate bills or been subject to public hearing.

Specter, Murtha and Sen. Rick Santorum (R-Pa.) announced in a release the next day that they had backed the amendment to "help save WQED from the brink of bankruptcy."

The legislation says the FCC "shall, not later than 30 days after receipt of a petition by WQED, Pittsburgh, determine, without conducting a rulemaking or other proceeding" whether to delete the asterisk next to WQEX's frequency on the FCC's table of TV channels, ending its noncommercial reservation.

The decision can be made "based on the public interest, the existing common ownership of two noncommercial broadcasting stations in Pittsburgh, the financial distress of the licensee, and the threat to the public of losing or impairing local public broadcasting service in the area," the law says. The FCC won't have to consider competing applications for the channel. Proceeds will be "used solely in furtherance of noncommercial broadcast operations, or for such other purpose" as the FCC chooses.

Congress clearly didn't want the FCC to work at its usual backlogged pace. A rulemaking would take at least three or four months and probably longer, according to an FCC attorney.

The station in a box

Michael Fields, who managed WQEX since 1990 (and also WQED-TV in the last few years) until he resigned last month for personal reasons, has mixed feelings about losing Pittsburgh's second public TV channel, but on balance enthusiastically supports the sale.

"This is a lovely, wonderful, quirky kind of station, unique in all the world--there is not another like it," Fields says. "On the other hand, Pittsburgh is not richer for having it, it's poorer." WQED can dispose of the asset "and with the proceeds, Pittsburgh could be blessed with a magnificence of public broadcasting unknown in any city."

"It's nice to have a toy," Fields adds. "Instead of dessert, we need a big, healthy meat-and-potatoes banquet."

A decade ago, WQEX was hailed as an innovative "station in a box," with its studio, master control and offices packed in a single room. Fields' predecessor as manager, Ken Tiven, won engineering awards for the package in the '80s; Fields later developed the program mix, including reruns of Perry Mason and a flock of regular local productions--such as a daily show for senior citizens, Agewise A.M.--and national shows for minority audiences.

If WQED were financially healthy and could make good use of its second channel, Fields wouldn't want to sell it. But he figures that the licensee and Pittsburgh viewers will be better off with a stronger WQED. He estimates the sale will bring in between $10 million and $60 million.

-------------------------Earlier story

In debt, WQED considers selling off its second Pittsburgh station

Originally published in Current, Feb. 12, 1996

By Steve Behrens

"I'm trying to turn this place around," says George Miles, president of WQED, Pittsburgh. "When you're trying to turn around, you have to explore every single option."

Two options that Miles is exploring are selling or leasing out the organization's UHF sister station, WQEX, and selling all or part of its successful Pittsburgh magazine.

The Pittsburgh Post-Gazette reported that WQED has been talking with Voyagers Group, an Annapolis, Md., multimedia company, about buying into the magazine. Voyagers President Charles Sterin had no comment on the report.

Drastic options come within view when your station has a bank debt of $10 million and has borrowed $2 million from its own endowment.

Miles, who came to WQED in September 1994 to overhaul the organization and pull it out of debt, doesn't know what Channel 16 is worth on the commercial market--if the FCC would let him sell the reserved noncommercial educational channel or operate it commercially--but the last UHF transferred in Pittsburgh commanded a price of more than $50 million, he says.

Since the WQEX option surfaced in Mediaweek magazine on Jan. 8, his phone has been "ringing off the hook" with inquiries from media companies. But WQED management and board have made no deals and taken no positions on the options; they're just exploring them, he says. Federal law would have to be changed to let a reserved noncommercial educational channel be sold for commercial use.

WQED's fiscal desperation resembles the situation that may befall other public TV operators several years from now if the worst happens in Washington and more than $200 million in federal aid vanishes from the pubcasting economy before cost-saving measures and alternative revenues are in place.

Miles, who is also chairman of America's Public Television Stations, the field's Washington lobby, supports the legislative proposal now under consideration by APTS that would permit duopolies like WQED/WQEX to sell off, lease out, or switch their second stations to commercial operation. [A variation on the proposal was incorporated in the Fields bill introduced in February 1996.]

The idea comes close to acceptance at a time when public TV has nearly given up on the dream of some leaders, like the late Hartford Gunn, who pushed for it to become a multichannel medium. Second channels have remained rare and often underused assets, and politicians generalize that they represent "wasteful duplication." Proposed CPB rules, encouraged by Congress, would give a community service grant to only one public TV station per market.

"WQEX is not a redundant station," says Miles, "but the thing you must keep in mind is that as the digital revolution takes place, there will be other channels available. Do I need all that capacity?" Multiple services are important, he says, and WQEX costs relatively little to operate as an add-on, but he doubts Pittsburgh can support two public TV stations.

WQED Board members are supporting management's exploration of the WQEX option.

Allen Kukovich, a board member and state representative from Westmoreland County, says he's "of two minds about the idea," but the board had not received a proposal to consider. "Generally, the position of the board would be, if we have to do it to create financial solvency and security ... it might be in the best long-term interests of WQED. It could mean dramatic changes for WQED. It would have enough money to move ahead technologically and do something with Channel 13."

"We have to look to what the mission of the station is, and whether we can fulfill that mission at the present time with the financial constraints the station is under," says board member Kate Ford Elliott, a judge of the Superior Court of Pennsylvania. "I would love to keep everything. ... I am very pleased with the initiatives that George Miles has taken with the reorganization of the station."

Jerold Starr, a West Virginia University professor, pro-labor critic of WQED and member of its Community Advisory Board, objects to the WQEX option because losing the second station would constrict the range of programs the organization can broadcast.

"What they're proposing is in effect pursuing a very conservative strategy of stripping assets ... selling off resources that could serve the public mission," says Starr. "They have always used the second station as the one place where they would be willing on occasion to do shows for minority constituencies, whether they be racial or gay and lesbian or labor or whatever."

"We're talking about a publicly owned station that was started with $2 contributions from 60,000 people," says Starr. "It's really a betrayal of the public."



To Current's home page

Earlier news: House bill backed by some public broadcasters would permit sale of any public TV station if there is another in the same city.

Earlier background: Once a producer of prestigious documentaries, WQED fell into debt and controversy in the early '90s and its president resigned in 1993. An interim management attempted to put the station in order.

Later news: FCC declines to permit sale of second Pittsburgh channel; WQED turns to Plan B.


Web page revised Sept. 25, 1996
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