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WQEX deal falls apart

Thursday, January 20, 2000

By Sally Kalson and Barbara Vancheri, Post-Gazette Staff Writers

Christian broadcaster Cornerstone TeleVision has abruptly pulled out of its license-swapping agreement with WQED and Paxson Communications, claiming that federal restrictions attached to the deal would compromise its religious mission.

 
Oleen Eagle, president of Cornerstone TeleVision, poses at the studio. "We have a mission," she said. "We are here to proclaim the Gospel of Jesus Christ. We have never deviated from that and we aren't going to start now." (Lake Fong, Post-Gazette) 

The announcement came one month after the Federal Communications Commission approved the deal, which all three broadcasters had pursued for almost three years.

The move snatched defeat from the jaws of victory for Cornerstone's partners, who believed they'd cleared the last hurdle to the controversial and hard-fought arrangement. Opponents, meanwhile, hailed the collapse as a "big win" and vowed to renew efforts to make public broadcasting in Pittsburgh more responsive to diverse community concerns.

Cornerstone's withdrawal was hand-delivered to the FCC late Tuesday in a letter from its new Washington, D.C., attorneys, Fisher Wayland Cooper Leader & Zaragoza.

The move was the latest twist in a tortured story that began as an attempt to pull WQED out of debt. Since then, it has spiraled into a national argument over the First Amendment, the definition of "educational" television and the FCC's role in programming decisions.

The deal also spawned allegations of hypocrisy against U.S. Sen. John McCain, R-Ariz., who is running for president on a platform of campaign finance reform. McCain wrote letters urging the FCC commissioners to move on the deal, which would have benefited Paxson and its chairman, Lowell "Bud" Paxson. He and associates have been contributors to McCain's campaign.

 
    Related article:

Deal looks dead, but debate isn't

 
 

The deal called for Cornerstone's WPCB (Channel 40) to assume the noncommercial educational license of WQEX (Channel 16) and sell its own commercial license to Paxson for $35 million.

Paxson, a new network offering family-oriented programming, would have entered the Pittsburgh market. And Cornerstone would have moved its programs to Channel 16 and shared the sale proceeds with WQED Pittsburgh, parent company of the two public TV stations, WQED-FM and Pittsburgh magazine.

But the FCC's approval contained a poison pill in Cornerstone's view - "additional guidance" stating that in order for it to hold a noncommercial license, at least 50 percent of its programming would have to be "generally educational" in nature. Shows mostly devoted to "religious exhortation, proselytizing or statements of personally held beliefs" would not qualify, nor would church services.

"We have a mission," Cornerstone President Oleen Eagle said yesterday. "We are here to proclaim the Gospel of Jesus Christ. We have never deviated from that and we aren't going to start now. If we did, there would be no reason for us to exist."

 
  George Miles, WQED president

After much discussion, Cornerstone's board of directors voted to kill the agreement, even though doing so cost the station its $17.5 million share from the commercial license sale. The decision was made without the Rev. Russ Bixler, the station founder, who has been hospitalized since Christmas with complications from pneumonia.

"I've worked with Russ for 23 years, and I believe this is what he would have wanted us to do," Eagle said.

"We certainly didn't anticipate any of this at the beginning," she continued. "We went into the whole thing because 15 or 20 full-power stations in the U.S. were already operating on reserved channels and they had the same type of programming we had. We said we could make the adjustment from commercial to noncommercial because it wouldn't inhibit our ability to promote the Gospel.

"But the FCC ruling was very confusing and contradictory. It's saying two different things - we like you enough to approve this, but you have to change who you are."

Even if a congressional effort to strip the "poison pill" from the ruling succeeds, Eagle said, the board doesn't trust the agency enough to proceed.

"We just feel the climate at the FCC right now is hostile to our needs. We can't take the risk of losing our license later because of something they don't approve of."

To WQED, Cornerstone's decision means the loss of four years of momentum, about $500,000 in legal fees, plus the $17.5 million it was counting on to pay off its $7 million debt, convert to digital technology, start a local-programming endowment and repair its Oakland building.

George Miles, WQED president and architect of the deal, was disappointed. By the time Eagle notified him and Paxson of the decision late Tuesday, it was already an undone deal.

"I'm surprised the way it was communicated to us," Miles said. "If I were in the same situation, I would have called and said, 'Look, we're contemplating this.' We've had a number of items we've had disagreements on and we always sat down, worked through them and found common ground. That's the nature of negotiations."

Miles speculated that Cornerstone was overwhelmed by the prolonged process. "We've fought some good battles along the way. It sounded like too much on the plate ... I can understand being burned out."

Nancy David Udell, spokeswoman for Paxson Communications, had no comment on Cornerstone's withdrawal or whether the firm will walk away from Pittsburgh, the only city among the top 20 television markets without a Pax station. Paxson, based in Florida, owns 72 broadcast TV stations and has 48 TV affiliates that carry Pax programming.

Critics hailed the unraveling of the deal.

"This is a big win for the Pittsburgh-area community," said Linda Wambaugh, executive director of the Alliance for Progressive Action and co-chair of Save Pittsburgh Public Television.

"We've stopped a bad plan put together by the WQED management and board. From the beginning, WQED knew there was substantial community opposition, and they ignored it. With thousands of letters, petitions, e-mails and demonstrations, the community expressed itself."

Jerry Starr, co-chair with Wambaugh, said the controversy has given new momentum to a national debate about educational broadcasting. "By challenging these applications, we've raised the issue of eligibility requirements [for] educational TV licenses for national discussion."

Starr, executive director of a new organization called Citizens for Independent Public Broadcasting in Washington, D.C., said he is organizing a coalition to participate in the debate.

"We now have 45 noncommercial [radio and TV] licenses owned by members of the National Association of Religious Broadcasters," he said. "Many of them ignore a lot of the FCC's standards about commercialism, local representation and educational programming. This issue is now reopened."

As for the local effort, Starr said, "We still don't have community-responsive public broadcasting in Pittsburgh, which was our original goal. We hope that will follow and we know there are many people in Pittsburgh who would like to participate in that process.

"Now that this sad chapter is behind us, we look forward to new public service programming on Channel 16."

WQED and WQEX will continue airing one lineup, as they have been doing since November 1997.

As for his next move, Miles said, there are a number of options but declined to disclose them. WQED's board of directors was to hold its regularly scheduled meeting at 8 a.m. today, but any talk about the matter is likely to take place in executive session, closed to the press and public, probably with Steven Lerman, the station's Washington, D.C., attorney, on the phone.

"I'm an eternal optimist," said Miles. "I'll figure out what to do next."

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