Big Isle newspaper publisher seeks stake in Hilo low-power TV station

The Stephens Media deal would sidestep federal restrictions on cross-ownership

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The Big Island's only daily newspaper publisher may become co-owner of Hilo's KHHB-LP, Hawaii's only low-power television station carried by Oceanic Time Warner Cable.

Federal law currently prohibits newspaper publishers from buying full-power television stations in their markets, but that law does not extend to low-power stations, which normally have output of less than 1 kilowatt.

Full-power television stations typically put out tens to hundreds of kilowatts.

Watchdogs are alarmed the deal would decrease diversity in media ownership and potentially silence an independent news voice.

Hawaii Tribune-Herald and West Hawaii Today publisher Stephens Media LLC, of Nevada, does not see the deal as a purchase, and has only discussed promotional opportunities with station owner and deal partner Kevin Culbertson.

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The owner of the Big Island's two daily newspapers is seeking co-ownership of KHHB-LP, a low-power television station in Hilo.

The move is alarming media watchers -- even though the long-held ban on newspapers buying TV stations does not apply to LPTV stations -- who fear the deal would decrease diversity in media ownership.

Media and telecommunications attorney Chris Conybeare believes cross-ownership, even of a low-power TV station, is a disservice to the community.

"Even if technically there is not a violation, the spirit of the rule is being violated to the detriment of the people of the island of Hawaii," he said.

Meanwhile, the cross-ownership regulation itself "is sort of in limbo," said John Morton, newspaper industry analyst. The FCC voted to eliminate the restrictions on newspaper-television cross-ownership, he said, but it was challenged and the federal court sent it back to the FCC. Nevertheless, the commission is ultimately expected to relax the ban, he said.

Las Vegas-based Stephens Media LLC, which publishes the Hawaii Tribune-Herald, West Hawaii Today as well as the Big Island Weekly, did not disclose that it is a newspaper publisher in the ownership transfer application filed with the Federal Communications Commission.

"It really smacks of hiding the ball," said Wayne Cahill, administrative officer of the Hawaii Newspaper Guild, which represents newspaper workers.

The Guild is a local of the national Communications Workers of America, which has fought to maintain rules prohibiting broadcast and print cross-ownership, Cahill said.

"What we've got to do is make sure there is diversity in editorial judgment. When we fail to do that, we fail to adequately cover the news and serve the community."

The union and the Hilo paper will clash in a National Labor Relations Board trial in July over charges including unfair labor practices.

A need for cash did not prompt the deal, said Kevin Culbertson, president of Hilo Hawaii Broadcasting Ltd., current KHHB licensee.

"We believe that together we'll be able to serve the community with more product, more quickly than I could by myself."

A local marketing agreement between Culbertson and Stephens is already in effect and the two plan cross-promotion, but there is "nothing definitive" on how the deal will impact the station's news. Culbertson has long planned a half-hour newscast as well as another station, in Kona.

Michael Ferguson, vice president and chief operating officer of Stephens Media, does not consider this a purchase.

"We've formed a new company that will manage the station," said Ferguson, who is president of Hilo LP TV LLC, formed with Culbertson for the deal.

In fact, the application to transfer the license of KHHB refers to a contribution agreement, versus the usual asset purchase, or asset sale agreement.

Stephens will pay $242,000 for its first step into broadcasting, but Culbertson "is still the owner ... He's the TV guy," Ferguson said.

Culbertson is receiving support "from other divisions of Stephens Media, not the Tribune-Herald," but for sales, graphics work and accounting, he said.

KHHB is carried on Oceanic Time Warner Cable, which carries no other LPTV signals, said Norman Santos, Oceanic vice president of operations.

The agreement extends KHHB's reach far beyond its low-power, over-the-air grasp.

"There are about 33,000 households on the east side" of the Big Island, said Culbertson. "Just over 20,000 of those are reached by cable."

Hawaii and Alaska have more low-power TV stations than any other state, according to Amy Brown, executive director of the Georgia-based Community Broadcasters Association.

Brown is sure many newspaper companies own LPTV stations, but was uncertain how to confirm a number.

Industry analyst Morton was unaware of any major market papers snapping up LPTV stations.

Procedures for the public to comment on the proposed deal are detailed on the FCC Web site, or toll free via 1-888-CALL-FCC. The public comment period for the transfer of KHHB's license expires at the end of this month.