KSTK awaits FCC approval for license transfer

Radio station KSTK is now awaiting decision by the Federal Communications Commission on whether to approve a proposed acquisition by CoastAlaska, a regional service headquartered in Juneau.

Applications to transfer the station's four licenses were filed with the FCC in early December, with a public comment period ending last week. If approved, Wrangell Radio Group, whose board administers the local station, would transfer KSTK's physical assets along with its licensed channels to CoastAlaska as part of a sales agreement the two parties have made.

The sale came about primarily due to a change in grant funding availability through the Corporation for Public Broadcasting and Alaska Public Broadcasting Commission. Funds from both sources make up a significant portion of the Wrangell station's available funds, last year making up $201,310 of its $399,841 in revenue.

Due to cuts across the board to agencies statewide, APBC funds have been significantly reduced since the 2015 fiscal year. By 2016 grants to individual stations were reduced by $24,500, then again the following year by another $31,864, leaving $80,907 available for 2017's grants. That amount has remained stable into the coming year, but the diminished value coincided with changes at the federal level.

"The big why is something called non-federal funding support," KSTK station manager Cindy Sweat explained in an interview last week. "It's not the funding directly that's been the problem, it's this new benchmark for non-federal funding support," Sweat said. "And that benchmark is one of many criteria that stations across the nation need to meet in order to qualify for their grant from the CPB."

To qualify for CPB grant funding a station needs to raise so much money from non-federal sources. This includes individual donations from listeners, business sponsorships, building rents and even state grant funds. As radio stations around the state saw a more than $56,000 decline in APBC funds over two years, NFFS thresholds for federal funds raised from $275,000 to $300,000, Sweat explained.

"Between the two, it tipped the scales," she added.

Looking ahead to FY18, the station would come up short of the benchmark by about $68,000. It wasn't for lack of trying, as the station increased its revenue from members and underwriters by around $7,000 between 2016 and 2017. Still, the difference remained insurmountable.

"When I look at the community, where do I get that out of this community? I can't expect anybody to donate that much, it's just not realistic," Sweat recalled feeling. "We're all kind of in the same boat here, where if the economy's struggling we're all struggling."

As a result of its reduced revenue, the station has had to shed some of its programming and staffing hours as well.

"We did drop Prairie Home Companion, which was really popular but it was very expensive," Sweat said. "Another program people liked – me especially, and some of my friends – is called A Splendid Table. ... Those are the two that made the biggest impact."

Despite this and still looking ahead at a likely shortfall, the station and its governing board began exploring other alternatives. CoastAlaska management began working with Wrangell Radio Group on an alternative well in advance, with the discussion taking off in earnest last February.

KSTK is a founding affiliate of CoastAlaska, a nonprofit corporation which provides administrative support for public broadcast stations in Juneau, Sitka, Petersburg and Ketchikan. It was created by the region's radio stations as a consolidative measure during the 1990s as a response to a period of decreasing public grant support. By pooling together resources, the idea was to allow stations to maintain a local presence and self-management, while reducing redundancies with bookkeeping, engineering support, some recruitment drives, editorial organization and news services.

"Coast is an interesting organization, there's not one like it," said Sweat.

"The conversation has been going on for longer than a year," said Mollie Kabler, CoastAlaska's executive director. "KSTK has been a successful station, and has done a good job about having a balanced budget all along. The situation that changed is that the regulations around federal funding changed. The ratio of how much non-federal support the station raises, the requirement for that has gone up. That's a national thing, and to some extent arbitrary as far as we're concerned."

Initially the prevailing idea had been to combine Wrangell's radio service with another station, with Petersburg's KFSK the likeliest candidate. The two communities have similar economic interests and connections through school and municipal programs, as well as sharing use of the Stikine River. KFSK management was approached with the idea, leading to a visit and talks between the two stations on several occasions early last year.

"We all spent a couple days talking about what would that look like technically, what would it look like legally, what would it look like in terms of staff," Sweat said. "There were a couple of technical ways to approach that. One way would be to have a repeater," similar to the translators KSTK currently uses to extend its signal around the area. In this scenario both stations would consolidate into one, broadcasting a single signal to both communities.

Another alternative would be to make use of its pre-existing tieline service, which allows connected stations to share each other's programming. If KFSK were designated the primary station, then Wrangell's could under that arrangement occasionally pipe in its own content while mainly running Petersburg's programming. KFSK station manager Tom Abbott noted his station had on several occasions last year provided KSTK a signal to test that scenario.

"We were running it to see how it would work," he said.

There were some drawbacks to either scenario. Along with responding to local emergencies as quickly as possible, Kabler noted that a shared station between two communities could have a diluting effect on local content that could adversely affect interest. Abbott also pointed out that while Petersburg has strong membership support, taking on service for another community and its expenses could become a burden on the station's resources.

Keeping the stations separate also would retain available resources for the regional network. As the license holder, CoastAlaska would be eligible to use its own NFFS resources to meet CPB grant requirements while continuing to receive both state and federal funds for KSTK's operations.

"Which is helpful to all of the Coast stations, because they benefit by working together," Kabler added. "In the end, what we realized is that a regional board of directors could own the station. This was overwhelmingly what made the most sense to them in terms of the long-term health of the station and retaining local service in Wrangell."

"Really the main thing was, if it's one station then you get only one CPB grant and one State of Alaska grant," Sweat explained. "That makes them less viable, less robust," referring to CoastAlaska.

KSTK began reaching out to its membership about the upcoming changes in September, Sweat said, dispatching letters to its 234 active supporters. On September 23 the CoastAlaska board – made up of members from each of its constituent stations – voted in favor of the acquisition. The Wrangell Radio Group board followed suit, and on November 4 a meeting of station membership voted unanimously in favor of the agreement, with about 20 voting.

Although the station had reached out to its members and to the City and Borough of Wrangell about the planned acquisition, its news arm had not run coverage on the developing story for the wider public. Sweat said this had been due to circumstance.

"It wasn't that there wasn't a story. We didn't have a reporter until October," she said. Holiday-time vacations were also cited, with key members unavailable for much of December.

"We felt that, well, let's not get the cart before the horse, let's make sure we know this is what we want to do. If we'd had a story in June, for example, maybe the board would have been talking about combining with Petersburg. And that's not really what we did in the end."

If the FCC approves the station's request, Wrangell Radio Group would be formally dissolved, with its board rearranging itself as a support base for the station. Sweat's position would then fall under the purview of Kabler's, and KSTK would be formally directed by CoastAlaska's board. The local board would continue to spearhead fundraising and membership activities, while programming would continue as it has been.

"For the listener or the user online, nothing's going to change," said Sweat. "There won't really be a noticeable difference."