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112 new FM channels will be available in the next auction for new FM channels (referred to by the FCC as "Auction 94") to be held beginning April 23, 2013. To participate, interested parties must file their "short form" applications – setting out information about the ownership of the applicant and the channels in which they are interested – by February 6, 2003. All of the procedures for the auction are set out in the order released late Wednesday, available here. The locations of the available channels, authorizing the winners to build new FM stations  serving the named communities and the nearby area, are also set out in this attachment to the order. The notice adopts many of the same procedures set out when the Commission first proposed the auction back in September (see our article here). However, the Commission pushed the auction back the initially scheduled date for the auction by about a month to avoid religious holidays and the NAB Convention, ending up with the new starting date of April 23. The Commission also pushed back other dates associated with the auction, deleted a handful of channels that had been proposed for inclusion in the auction but had not been properly published in the Federal Register, and announced other decisions relating to the auction – all with many cautions for those who may be bidding about the possible pitfalls of the auction process.

The relevant auction dates are as follows:

Auction Tutorial Available (via Internet) .........................January 28, 2013

Short-Form Application (FCC Form 175)

Filing Window Opens .......................................................January 28, 2013; 12:00 noon ET

Short-Form Application (FCC Form 175)

Filing Window Deadline...................................................February 6, 2013; prior to 6:00 p.m. ET

Upfront Payments (via wire transfer)................................March 18, 2013; 6:00 p.m. ET

Mock Auction ...................................................................April 19, 2013

Auction Begins..................................................................April 23, 2013

The most important dates for bidders are the deadline for the submission of the "short-form" application of February 6, the date for the Upfront Payments, and of course the dates for the start of the auction itself. The short-form lists the owners, any bidding agreements that the parties have with other bidders, and the channels in which the party is interested in bidding. The bidder can also submit specific proposed transmitter site coordinates for any channel in which they are bidding, which protects those named sites from moves by other existing stations that could otherwise preclude their use.   The failure to meet this February 6 deadline means that a party cannot participate in the auction.

The upfront payment is the minimum bid for a channel. While a party need not submit upfront payments to cover all of the channels in which they are interested (on the assumption that they won't necessarily win each channel on which they are bidding), they at least need to submit the amount necessary to cover the most expensive minimum bid among the channels that they are seeking to even participate in the process, and they need to submit enough to cover the minimum bids for all of the channels that they ultimately win in the auction – so if they plan to bid aggressively on multiple channels, they need to have an Upfront Payment sufficiently large to cover the minimum bid on all of the channels that they could win.  If you specify interest in a great many channels, a limited Upfront Payment may limit the number of channels on which you can actually bid.

The Commission also talked in its order about several other issues about which potential bidders need to be aware. This includes the requirement that bidders do their due diligence on the value of the channels for which they are bidding – including issues such as the location of possible transmitter sites and any other technical limitations that may exist on those channels. Some channels, when allotted, also have a requirement that the ultimate winning bidder pay an existing radio station its costs to change channels (changes that are necessary to make the auction channel available). The Commission declined a request that it specifically indicate in its auction notice which of the 112 new channels has such a reimbursement requirement tied to the channel. Instead, the Commission requires that the applicant do its own diligence to avoid a nasty post-auction surprise of being hit with the extra cost of changing another station's channel in order to build the new station. Applicants who are the winning bidder in the auction, and who later discover that their channel is not worth what they paid, in most every case will still be obligated to pay the amount they bid (potentially with late fees) and cannot get a refund if the channel's value does not materialize.

The FCC also warned bidders that they cannot collude with each other by exchanging any information about bidding strategies or otherwise coordinating their bidding, unless such arrangements are set out in the initial short form application. So if companies with interlocking officers, directors or financing sources, and these companies may bid on any common channel, these relationships may need to be disclosed upfront in the initial application Form 175 application.

Once the auction is complete, the FCC will specify a date for the submission of "long-form" applications (FCC Form 301) where applicants need to set out their specific technical facilities – including transmitter sites for which they have "reasonable assurance" of availability. That will usually be a date only about a month after the auction closes – so those sites need to be secured and ready to go so that they can be plugged into the long-form applications and submitted on time. Payments of the remainder of the auction bids also need to be made promptly.

These and many other processes and procedures are set out in the auction notice. Anyone interested in participating in the auction needs to start thinking about these matters and doing its diligence now – as that February 6 short-form deadline will be coming quickly. While not every channel will yield a gold mine, there may be some gems among the channels, and some opportunities for existing broadcasters to widen their coverage area. So start your preparations now!

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In anticipation of the new auction of 123 FM channels scheduled for March 2012 (about which we wrote here) the FCC has frozen the filing of FM applications and rulemaking requests which seek changes in the frequencies of any of the channels proposed for inclusion in the auction or which otherwise fail to protect the reference coordinates for these channels. This is not a blanket freeze of all FM filings, but instead simply is meant to protect the channels that are included in the auction so that interested applicants can begin the search for transmitter sites and otherwise evaluate the prospects for these channels in a stable environment.

While the procedural dates for this auction (including the dates by which applications must be submitted) have not been finalized, we anticipate that these dates will be set soon, and that initial short-form applications specifying the channels in which each applicant is interested, will be due early in 2012. So if you are interested in the possibility of building a new FM station, check out the tentative list of new allotments here to see what is available, and start making your plans to participate.

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Looking for opportunities for a new FM station?  The FCC has just released a list of new FM channels to be auctioned in the next FM auction, scheduled to begin on March 27, 2012, along with the proposed rules for that auction.  On the list of channels, the proposed minimum bid for each channel is also set out.  If the Commission follows the schedule used in prior auctions, we should expect that the deadline for the "short-form" application to participate in the auction (which basically contains information about the ownership of the applicant and a list of the channels in which they are interested) will be due in early 2012, likely sometime between January 1 and January 15, 2012.  The upfront payment of the necessary minimum bids would then likely be due around February 20, 2012 or so.  In another Notice of Proposed Rulemaking released late last week, the FCC also proposed to delete a number of FM channels that have gone unsold in previous auctions.

The construction permits for the new stations that will be available in the auction are spread all across the country.  Many are located in large western states including multiple channels in California, Colorado, Oklahoma and Texas, among other states.  But there are even opportunities in eastern states like Florida, Vermont and Virginia.  So, if you are interested in starting a station from scratch, look through this list of channels to see if there are opportunities for a construction permit for a new station in which you might be interested.  If you find something that might be interesting, you need to start your due diligence on each channel now, as the bidder is responsible for insuring that the channel for which they are bidding can be built and will serve the audience that the applicant expects.  If you win the auction and decide that you can't really find a transmitter site, then you may well be on the hook for the full amount of the bid even if you don't build the station.  And, if you are successful in the auction, you will have to have an available transmitter site to specify in your "long-form" application about a month after the end of the auction - an application which will specify all of the technical details of the new station.  So look at zoning issues, FAA considerations, coverage questions, and even whether technical details like the rural radio order limiting move-ins of FM stations from rural to more urban areas, may limit the potential economic value of the channel in which you are interested. 

While there may be opportunities in the list of available channels, in recent auctions there have been a number of channels for which no one has submitted bids, even after the channels were available in several auctions.  Rather than trying to provide yet another opportunity for people to bid on these channels, and continuing to protect these vacant channels from interference from allocations for new stations or improvements in existing stations, the FCC is proposing to delete these channels.  If you are interested in new FM opportunities, look over the list of channels proposed for deletion to make sure that there is nothing in which you would be interested, and object to the proposed deletion if you find a hidden gem.  If no one objects by the October 31st comment deadline, the channels will be deleted.

Opportunities for new FM stations are coming your way.  Take a look for ones that might be of interest to you.

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Interested in a new FM radio station?  Now might be your chance.  The Commission today announced an upcoming auction, designated as FCC Auction No. 91, offering licenses for 147 new FM channels in various communities across the country.  The auction will begin on March 29.  Today's public notice merely lists the channels to be auctioned and the proposed minimum bid in the auction to be associated with each channel, and asks for comments on the procedures that will apply in conducting the auction.  We would expect that applications to participate in the auction will probably be due sometime in or around January, 2011.  The list of the 147 licenses to be offered for sale is available here.  The FCC Public Notice asking for comment on the auction procedures is available here. 

Parties who are interested in bidding for any of these channels will be able to submit short form applications indicating the channels in which they are interested.  As stated above, we would expect these applications will be due sometime early in 2011, so that the FCC can process those applications and receive the necessary upfront payments from parties interested in the auction in time for the auction itself to begin in March.  Thus, parties who are interested in any of these channels should start their due diligence process now, and determine which channels may be of interest, and which channels can actually be built in such a way as to cover areas that an applicant may want to serve, so that they can be ready to file their applications.

Applications, when filed, will not need to specify a specific transmitter site but, once the auction is over, winning bidders will need to quickly identify and file complete construction permit applications containing specific transmitter sites for which they have reasonable assurance.  Reasonable assurance requires that there be a specific understanding with the landowner that the site will be available for the station, and some understanding as to terms on which the site will be available.  As the post-auction period for filing this full application will be short, and cannot be extended, applicants should begin preparations for the auction now, to be ready to file the long-form application in the event that they are a successful bidder.  Moreover, as the Commission expects applicants to have done diligence before they bid, applicants will be liable for the amount bid in the auction, even if the station ultimately cannot be constructed in the manner that the applicant expected.  One more reason to do your diligence now. 

Applicants who have identified a usable transmitter site can specify that site in their applications to protect it from subsequent applications.  Because of the upcoming filing window, FM broadcasters should also anticipate a freeze on the filing of any FM technical applications at some point late this year in anticipation of the auction filing window, in order to give applicants a stable technical situation so that they can identify usable transmitter sites. 

Note that, while there are 147 channels spread around the country, there seem to be a large concentration in Texas.  The remaining channels are all across the country.  So check out the list, and see what might be of interest. 

Comments on the procedures for the auction are due on October 13. 

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The FCC has released a public notice asking for comment on the procedures that it plans to use for a new FM auction now scheduled to be held in September.  The channels to be included in that auction, and the proposed minimum bids for those channels, can be found on a list released by the Commission, here.  Parties who are interested in bidding for any of these channels will be able to submit short form applications indicating the channels in which they are interested at some point to be determined in the future - probably late Spring or early Summer, so that the FCC can process those applications and receive the necessary upfront payments from parties interested in the auction in time for the auction itself to begin in September.  Thus, parties who are interested in any of these channels should start their due diligence process now, and determine which channels may be of interest, and which channels can actually be built in such a way as to cover areas that an applicant may want to serve, so that they can be ready to file their applications, probably in May or June.

Applications, when filed, will not need to specify a specific transmitter site but, once the auction is over, winning bidders will need to quickly identify and file complete applications containing specific transmitter sites for which they have reasonable assurance.  Thus, they should begin preparations for the auction now.  Applicants who have identified a site can specify that site in their applications to protect it from subsequent applications.  Thus, FM broadcasters should also anticipate a freeze on the filing of any FM technical applications at some point in late Spring in anticipation of the auction, in order to give applicants a stable technical situation so that they can identify usable transmitter sites. 

Note that, while there are 122 channels spread around the country, there seem to be a large concentration in Texas, Oklahoma and California.  So check out the list, and see what might be of interest. 

Comments on the procedures for the auction are due on April 1. 

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