The Price of Selling KUSF

        Chad Heimann is short and stocky, with round full cheeks. He was dressed in a bright orange flannel button down, and he had a bright green hat on his head. He looked friendly, nothing like the activist he became after the University of San Francisco’s sale of 90.3 FM to KUSC in January. Heimann became somewhat of a poster child for student discontent over the sale and on an April after noon he stood in USF’s Harney Plaza, as part of KUSF LIVE(S), an event put on to garner support from the student body for KUSF. “To cut a deal for $3 million when they could have gotten $10 million is just shameless,” Heimann said. “The university does not care about student activities.”

        The University of San Francisco has not lost KUSF entirely; it has transferred the station to an online format. Operating an online radio station however may prove to be more difficult and more expensive than the university administration anticipated when they sold the FM frequency.

        Dorothy Kidd, a professor of media studies at the University of San Francisco said her department is “not prepared to teach digital radio.” She mentioned a college radio station in Washington State that recently contacted her and said it took them two to three years before they were fully functioning online. “Digital media is not the same as broadcasting and you can’t just transfer the skills over,” Kidd said.

        What seem to have made things more difficult for the station to operate are the loss volunteer and student workers, who left following the sale of the FM frequency. Trista Bernasconi, the stations programming director also left, she resigned early last month. But before she did, Bernasconi solicited volunteers from media studies students to operate the online station. “I’d rather have someone in there, than an IPod on loop,” she told students. Though some students did get involved, the station is still looking for many more.

        Miranda Morris, KUSF’s fundraising coordinator, said that she works closely with student volunteers, and she thinks, “It will be up to the students to run the online station.”

        “Even though I don’t want to replicate the FM station online, the less volunteers we have, the less will get done.”
That goes beyond just having DJ’s. Morris said one thing the community volunteers provided to the FM station was a handful of close relationships with music venues and clubs through out the city. Morris said the clubs would email the station when tickets were available for certain events. The free tickets, she said were an incentive for student involvement.

        In a letter published by the San Francisco Chronicle’s website, SFGate.com, on January 22, 2011, the University of San Francisco president Father Stephen A. Privett cited lack of student involvement as part of the decision for the frequency’s sale, writing, “Though KUSF started as a student-operated station, at the time of our decision to sell the frequency only about 10 percent of the station’s volunteers were USF students.” And: “In an era of difficult economic choices, we simply could not afford to continue subsidizing, with tuition dollars, a radio station whose primary focus was not our own students”

        “I don’t know,” said Morris, “I dispute that. I’d say one-third of the volunteers were student. There was a lot of students attracted to the community side because they got to meet people who had lives in the entertainment industry in the city.”

        “I feel like we’re starting the station from scratch,” Morris said.

        According to Kidd, that may be a fair assessment. Since she has been at USF, she has seen the media lab, which is scheduled to be KUSF’s new home next semester, on the first floor of Cowell Hall, go through “five different configurations,” adding, “I think that, from what I could tell, that process was partly because of technology change and partly from testing out a new system.”

        The future of the station may be a process of trial and error. A look at the way they system of online broadcasting works may explain why.

        KUSF online is streamed by the website Live365. Live365 is essentially a hosting sight, like a blog for sounds, which allows anybody with an Internet connection, a computer, and the proper amount of money to pay the set up fee and regular monthly service fee, to have an online station. But unlike the frequency, USF does not own KUSF. Live365, as a business, has the right to terminate its service to USF, or any of it’s other clients, at any time. Meaning, the existence of KUSF as a streaming, online broadcast, is only guaranteed as long as Live365 is in operation. Any shift in the markets that could drive Live365 out of business, or a violation of Live365 terms of use by a KUSF staff member, would render the university radio station-less, in any format.

        The mostly likely threat to KUSF Online’s existence, or any other online radio station for that matter, is royalty fees. Kidd described them as “the cost problem.” She said, “The royalties online are higher than they are on FM.”

        Royalty fees are fees paid for the use of intellectual property. Kidd said one thing college radio did years ago was lobby against having to pay royalty fees. The Internet however does have to pay them. And the fees are so high due to the events of recent history.

        In 1999 the website, Napster, which started in San Mateo, went public. The site specialized in the sharing of music files in the form of MP3’s, entirely for free. Record companies and artists lost countless amount of millions of dollars, as the sites users downloaded their intellectual property at a rate of 10,000 music files per second. The CD suddenly became obsolete.

        In 2001, a lawsuit was filed by 10 record companies against Napster for upwards of $20 billion. The case went to the Ninth Circuit Court of Appeals, where the court gave Napster two options; either pays the royalty fees for the music being downloaded or shut down.

        When the federal government became aware of the internet’s potential as a tool to skirt paying for intellectual property rites, they created the Copyright Royalty Board in 2004, a team of three, selected by the Librarian of Congress, responsible for setting the price of royalty fees.

        In 2007, the board met the greatest threat to intellectual property sense Napster, in the form of online radio sites like Pandora, and KUSF’s hosting site, Live365.

        As a way to avoid the same substantial losses from 1999, the Copyright Royalty Board immediately tripled the performance fee for online radio. A performance fee is the cost of playing a single song.

        Tim Westergreen, the founder of Pandora, became active in trying to fight the rise in performance fees, and said on Morning Edition on May 28, 2007, “for web casters like us, in a couple of years, just the performance license feel will account for 70% of our revenue.”

        In late 2010, online radio and the Copyright Royalty Board made somewhat of an agreement. As it stands now, for a Noncommercial Educational Web caster, like KUSF, they are subject to an annual fee of $500 dollars. On top of that they must pay $0.0017 for each song played within an Aggregated Tuning Hour. An ATH is equal to one hour of programming to a single listener. So, for example, if KUSF streams one song per hour, for 24 hours each day, to a consistent listener ship of 10 people, that will cost USF $4.08, per day to fund KUSF online

        But of course KUSF will have music playing constantly, not just a single song per hour, which quickly raises the total cost to operate the station on top of the fees to Live365, into the thousands. With a small consistent audience, fluctuating between five to ten people listening, USF would have to pay and estimated $15,000 to $30,000 to fund KUSF inline

        The magic number, which has been mentioned, by Morris, and KUSF DJ’s is 213. Meaning, over 213 listeners, and the royalty fees will run into the hundreds of thousands of dollars. Which seems to be true. Furthermore, Copyright Royalty Board will be increasing the performance fee by roughly three one hundredths of a cent each year until 2015.

        A call to the office of Father Privett for a comment was redirected to Gary McDonald, Assistant Vice President for Public Affairs Communications, which was then redirected, ending finally with Ann Marie Divine, Director of Media Relations. When asked if USF planned on paying the potentially $100,000 royalty fees, Divine responded, “We’ve committed to increasing the bandwidth to facilitate additional listeners. I don’t think that your facts are correct. But I will double check the number and get back to you.” She has not called back.

        With online radio however, additional listeners bring additional costs, and by law, the costs will only rise. Though, Father Privett wrote in the same letter on SFGate, “The station, in an online streaming format, will have the ability to reach a truly worldwide audience without the weather or geographical impediments that a small radio station has.”
It is just that ability to reach a worldwide audience that has caused Morris to say that the success of the online format depends on if “USF is willing to pay royalty fees.”

        If KUSF is able to gain a fraction of the listener ship it had on FM radio, with the online station, the necessary funding to keep KUSF working online will be in the millions of dollars.

        There is still a chance, however slight, that KUSF will retain it’s 90.3 FM frequency. Friends of KUSF is a group of former community volunteers, former student volunteers, supporters of people living in San Francisco, and even supporters representing other college radio stations who have had, or are in danger of having, their FM frequency’s sold. Friends of KUSF has sent a petition to the FCC asking them to block the sale of 90.3 FM. They should receive a response sometime in June.

        Friends of KUSF is arguing that the sale does not provide “diversity” to the listeners within San Francisco, because KUSC will use the frequency to play classical music and KUSC already owns multiple FM frequencies throughout the state.

        In 1938 the FCC made the case for diversity when they denied a company the right to buy an AM radio station because it already owned one in the same city. The FCC felt, and they maintained this position through many of the decades following World War Two, that diversity, or a wide range of “information from diverse and antagonistic servers” could best be achieved through varied ownership of media outlets. The FCC essentially equated diversity with separate ownership.

        Around the 1980’s however, with the advent of cable television, the FCC began to loosen it’s strict policy of diverse ownership over local radio, saying that companies could own multiple frequencies because the media landscape had become so varied, over many mediums, they felt it would be difficult for anyone to get a strangle hold on public opinion operating only by radio. Today, a single owner is allowed to own any as many as eight FM frequencies and eight AM frequencies in the same market, depending on the market size. The smaller the market, the fewer frequencies a company can own. The FCC does however make exception when they feel that granting a single company more than the allotted amount of frequencies will affectively create other radio stations.

        It is unclear how the FCC will decide on the issue. They have never blocked the sale of a frequency in their history. Through the sale two online stations have developed as a result. KUSF online, and KUSF in Exile.

        KUSF in Exile is “a temporary home – our real objective is to bring KUSF back to 90.3 fm where it belongs and continue to serve the people of San Francisco,” wrote Loren Dobson by e-mail. A DJ at KUSF in Exile, Dobsen worked at KUSF as the host of a heavy metal show before the sale of the frequency. Dobsen wrote, “The idea is to rebuild the station, set up a permanent off-campus studio and become fully self-supporting. We will continue to involve students and faculty in the programming and day to day operations while shifting all of the financial burden away from USF allowing them to move ahead with plans for more student housing and other renovations.”

        Ken Friedman developed the system he is describing. Friedman calls it the “sell and keep model.” In 1994, he was working as the General Manager at WFMU at Upsala College. Upon the college’s university WFMU became independent from the college and partnered with WPKN of the University of Bridgeport. He described the process at the SXSW Music Festival on March 19, 2011 as part of a panel on the future of college radio, as a “mechanism that was successful in both of our cases- we negotiated to buy our stations on behalf of a staff-dominated, not for profit group, Friends of WFMU or WPKN, but we also agreed to our previous college licenses, that we would continue to remain located on campus and continue to give them all the benefits that they had previously enjoyed.”

        KUSF in Exile is operating online, much the same as KUSF online. Dobsen wrote, “Streaming for KUSF In Exile is provided by WFMU FM out of East Orange New Jersey,” from the same Ken Friedman.

        Miranda Morris says that what KUSF in Exile is doing, is “trying to make [the sale of KUSF’s frequency] a national cause. There is a tiny little portion set aside for non commercial educational radio.”

        Before the sale of KUSF’s 90.3 frequency, KTRU, the Rice University frequency was sold in August. Students and faculty tried to stop the sale with a petition to the FCC, but they just heard last month that the FCC ruled in favor of the sale. At the SXSW festival, Joey Yang, a student DJ at KTRU said, “we don’t want our voices to be stifled by NPR and classical music.”

        But at USF the process of becoming online only as just begun. “I think the online station will develop organically,” Morris said. She is excited about the potential of the online station, and sees it as way to engage more students, not just those interested in music and broadcast. “I would like the online station to be multimedia.” She envisions graphic design and art students producing content, and merging English majors and journalism students helping to write concert reviews or write-ups about new bands.

        “Technology is changing fast,” Morris said, “and I think KUSF will be ok. It may not be as interesting as the FM, it may take 20 years to get there, but the school needs it. You know, media is important.”

* This story was written based on interviews with Dorothy Kidd, Miranda Morris, Chris Moore, Adriel Taquechel, Luise Richter, Loren Dobsen, Ann Marie Divine, attendance of the event KUSF LIVE(S), and reading the documents Federal Communications Commission Rules and Policies Concerning Multiple Ownership of Radio Broadcast Stations in Local Markets, United States Copyright Royalty Judges Digital Performance Rights in Sound Recording and Ephemeral Recordings, the transcript of “How to Save College Radio” at the South by Southwest Music Festival March 19, 2011, the article “Music Labels Reach Online Royalty Deal,” by Claire Cain Miller published in The New York Times on July 7 2009, the transcript of an interview with Tim Westergreen from Morning Edition on May 28, 2007, and “KUSF Survives, But USF Had to Sell Radio Frequency,” by Stephen A. Privett published on SFGate.com on January 22, 2011.

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