Jacob Applebaum has been documenting the attempts by a number of people working with CUWireless to set up a low power, FCC-approved FM radio station to provide information to the people taking refuge in the Houston Astrodome; currently, the only way the evacuees have of getting news is via newsletters or the PA system, and the PA system isn't really suited for continuous information updates on things such as job updates, food, housing, or other information useful for getting people back on their feet and productive. (For more information on what the radios were to provide, see here.)

At first the stopping block was that the administrators were requiring them to also provide 10,000 individual radios, so that there would be no jealousy over who could hear news. When they managed to get that, they were stopped again, with the claim that they couldn't go on the air without filling out some forms for FEMA, even if they already had FCC permission to broadcast. They rushed to fill out the forms. Then their efforts were blocked entirely by R. W. Royall, Jr., the incident commander of the Joint Information Center (in charge of the Astrodome), denied them permission to start anyway. The reason given, via Rita Obey, a health services worker?

Entertainment.

Because we know that desperately trying to find a job and shelter of your own is so much fun.

A more plausible reason may be that they seem to be trying hard to censor information coming out of the Astrodome, and an independent radio station would allow independent reports to make it out of the Astrodome in real time.

As an aside, her throwaway reference aside, the Red Cross never objected to the radio station; they just didn't have the authority to allow it. That leaves one of two groups potentially responsible: either the JIC, or FEMA, the latter of which has deliberately tried to stop communications before.