With FCC’s eye on Daystar, WMFE-TV sale nixed

The FCC has delayed decisions on two transactions involving sales of public TV stations to Daystar Television Network to examine whether the religious broadcaster meets its criteria for localism and educational programming by noncommercial broadcasters.

The scrutiny scuttled a deal involving WMFE in Orlando, pending for nearly a year, and held up a decision on KWBU in Waco, Texas. Daystar, a Texas-based religious network, has been in the market for public TV stations since at least 2003, when it paid $20 million for KERA’s second TV channel in Dallas. It most recently bid on KCSM in San Mateo, Calif.

The WMFE sale fell apart after the FCC sent queries to the local entities that had been set up to operate the Orlando and Waco stations. WMFE President Jose Fajardo notified the FCC that the deal was off March 14, one day after the commission detailed its concerns.

“The deal was simply dragging through the process longer than we’d anticipated,” Fajardo told Current

FCC Video Division chief Barbara Kreisman gave buyers in Orlando and Waco 15 days to “demonstrate that the stations will be used to advance an educational program and will be locally controlled.” Without stronger evidence, “we cannot conclude” that the groups meet the eligibility requirements to hold a noncom license, Kreisman wrote in the letter.

Like the Community Television Educators of Waco, which has a contract to buy KWBU, the Orlando ownership group lists Daystar founders and chief execs Marcus and Joni Lamb as its officers.
The commission is examining whether the local Waco and Orlando entities “are genuine, functioning, local groups, or are they window dressing for some third party, such as Daystar?” said pubcasting attorney Ernie Sanchez. Undisclosed third-party control of a station is prohibited, he said.

The FCC also asked Daystar to describe its plans for local programming, Sanchez said. Documents filed in support of both license-transfer requests indicate that the stations were to carry the same content under their new owners — namely, Daystar programming. Daystar’s staffing plans for the stations and its financing of the transactions also raise questions about whether Daystar is a “real party in interest” that would control the stations with nominal local involvement, Sanchez said.

In Waco, KWBU President Joe Riley was perplexed by the letter. “We’re thinking and talking. We don’t know what our next move will be,” he said.

Daystar declined comment to Current, but Daystar reps told Riley that they’re trying to figure out their next move, the Waco broadcaster said.

The FCC’s query could also affect the Independent Public Media group, a new player in the market for noncommercial TV licenses. The group announced its interest in preserving noncommercial spectrum for the pubcasting system last year (Current, Oct. 17, 2011).

It’s headed by Ken Devine, former v.p. at New York’s WNET, and John Schwartz, a public-media activist who cofounded independent pubTV stations WYBE in Philadelphia and KBDI in Denver as well as WYEP-FM in Pittsburgh.

IPM has bid on KCSM in San Mateo and hopes to acquire additional pubTV licenses, but its ambitions could also be affected by the commission’s decisions on local ownership. “We have seen the letter and are reviewing the issues raised in it with our attorneys,” Devine said.

The issues in the FCC letter are similar to those raised 14 years ago when religious broadcaster Cornerstone TeleVision tried to purchase WQED’s second TV channel in Pittsburgh (Current, April 6, 1998). The FCC then asked Cornerstone for “further demonstration of the overall general educational, cultural and instructional nature” of programming it would air on reserved Channel 16, saying it provided “insufficient documentation” of its educational purpose or programs. Ultimately, the FCC approved the deal, but Cornerstone backed out (Current, Jan. 24, 2000).

The commission also delayed decisions on the proposed sale of WXEL-TV/FM in West Palm Beach, Fla., to distant owner WNET in New York. The transaction languished at the FCC for two years, from 2006 to 2008, until it was withdrawn. 

Comments, questions, tips?

Copyright 2012 American University