The FCC has announced that it intends to conduct an auction of 173 FM broadcast construction permits beginning on Nov. 1, 2005. This grouping includes 30 permits that were not sold during the auction held last November and 143 newly available FM allotments. A list of the channels that are up for grabs is posted on the FCC's website, www.fcc.gov. (On the left side of the home page, click “Auctions” and then scroll down to “4/14/2005, Public Notice DA 05-1076.”)
The Commission has not yet established a filing deadline for applications to participate in the auction. The likely time for the filing window will be during late July or early August. The FCC's staff is also likely to impose a freeze on minor modification applications in connection with the auction — so if you have a minor mod in mind, you should act promptly or risk being frozen out until after the auction.
While the Commission's April 14 public notice sought comments on the proposed methodology for conducting the auction, the Commission will likely use the auction procedures outlined in the notice and used in previous auctions. Those procedures appeared to work smoothly during last fall's FM auction.
The proposed procedures include a few changes in the system since the last FM auction as a result of the Commission's having adopted its Integrated Spectrum Auction System (“ISAS”), which is a redesign of the previous auction application and bidding systems. The changes will enhance FCC Form 175 by providing for the input of discrete data elements in place of free-form exhibits and improve the accuracy of submitted Forms 175 through automated data checking.
Let the bidding begin
The Commission plans another simultaneous, multiple-round auction. This means that bidding will remain open on all construction permits until there is no further bidding on any construction permit. In addition, prior to the auction the Commission will require upfront payments that will govern the maximum amount of bidding units that a particular applicant may use during any round. Each FM allotment is assigned a certain number of bidding units, which are the same as the dollar amount of the required opening bid for that construction permit. The amount of bidding units required to bid on a particular construction permit remains constant throughout the auction, regardless of the dollar value to be paid for the permit. But a bidder cannot place a bid for any construction permit for which it does not have sufficient eligibility in terms of bidding units. Bidding eligibility cannot be increased during the actual auction, but it can be decreased if an applicant does not remain sufficiently active.
One change from previous auctions is that the Commission proposes to divide the auction into two stages based on activity level. Stage One is the first part of the auction during which more bidders are actively participating. During Stage One, a bidder wishing to maintain its level of bidding eligibility will be required to be active on construction permits representing at least 75 percent of its current bidding eligibility. During Stage Two, when there are fewer permits for which active bids are being submitted, a bidder will be required to be active on 95 percent of its current bidding eligibility to maintain that eligibility level.
To participate in the upcoming auction, the first step is to check the suitability and availability of transmitter sites within the area where a channel can be located consistent with the FCC's channel spacing and other technical requirements. Several channels won in Auction 37 turned out to present potentially fatal problems due to line-of-sight and other engineering issues that were discovered only after the permittees' bid money had been paid. Local land use restrictions also should be considered before any bids are made. The FCC is selling these permits “as is, where is,” and no refunds will be available if an allocation turns out to be marginal or unusable.
On or before Aug. 1 radio stations in California must file their 2005 renewal applications, biennial ownership reports and EEO program reports with the FCC. The Form 396 (EEO program report) requires the attachment annual EEO public file reports for the 12-month periods ending in July 2004 and July 2005.
Also on Aug. 1 stations in Alaska, Hawaii, Oregon, Washington the Pacific Islands must begin their pre-filing renewal announcements.
Martin is president of the Federal Communications Bar Association and a member of Fletcher, Heald and Hildreth, Arlington, VA. E-mail