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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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Do you want to start a new FM station?   In what seems to have become a yearly event, the FCC has released a list of 117 new FM channels to be auctioned (a list that also includes the proposed minimum bid for each channel). The FCC also issued a “freeze” on FM applications that could impact these channels. The auction itself is scheduled to begin on March 26, 2013. If the Commission follows the schedule used in the last FM auction, 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 2013, likely sometime between January 1 and January 15, 2013. The upfront payment of the necessary minimum bids would then likely be due around February 20, 2013.

The channels in this auction on which new stations can be built are spread all across the country. Many are located in large western states, including multiple channels in California, Oklahoma, Arizona and Texas, among other states. 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 an area of interest. If you find something that you might consider, you need to start your due diligence on each channel now, as any bidder is responsible for insuring that the channel for which they are bidding can be built and will serve the audience that you expect. 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 submitted about a month after the end of the auction - an application that 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.

The FCC’s freeze on applications that could impact these new stations is in place until the winning bidders file their post-auction applications. No applications or rule-makings can be filed that would request a change in one of these channels, or which would be short-spaced to one of the reference coordinates for these allocations.

The Commission also put out for comment its proposed auction procedures. If adopted, these will be the procedures that will be used for this upcoming auction, which the FCC refers to as Auction 94.  Comments on these proposed procedures are due on October 10.

While there may be opportunities in the list of available channels, in recent FM auctions there have been a number of channels for which no one has submitted bids, even after the channels were available in several auctions. In the channels listed for this new auction, about 25 are leftovers from the last auction, either having been left unsold or cases where the winning bidder defaulted. If channels are not purchased in multiple auctions, the FCC will eventually delete these channels.

Opportunities for new FM stations are coming your way. Take a look for ones that might be of interest to you, and start preparing now to file your initial application to participate - probably in early January.

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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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Applications to participate in the auction of 144 new FM channels are to be filed at the FCC between January 31 and February 10, 2011.  The FCC today released a Public Notice setting out the dates and procedures to be used in the auction.  Upfront payments of the minimum bids for channels in the auction will be due on March 21.  The auction itself will begin on April 27 - a postponement of about a month from the dates originally proposed as the initially scheduled dates could have resulted in the auction running through this year's NAB Convention, making it difficult for some entities to participate.  We had written about the initial announcement of the proposed auction here.  Note that the list of channels available in the auction has changed slightly, as a few channels originally listed for sale were deleted when it was discovered that they were not vacant or were otherwise not available to be sold.  Thus, the auction will include only 144 channels, not the 147 originally proposed.  The list of open channels is available here, and this list also sets out the minimum bids established for each channel.

To freeze the FCC database so as to allow applicants in the filing window to specify a transmitter site that will be protected from new applications, the FCC will freeze the filing of all applications for minor changes to existing FM stations during the filing window.  Thus, if you need a technical change in an FM station, get that application on file before the January 31-February 10 window.  The FCC Issued a Public Notice setting out the details of the freeze.  After the window, all subsequently filed applications for minor changes in existing stations will need to protect sites specified for the new channels during the window.  The FCC also froze - effective right now - any rulemaking proposal asking for a change in the coordinates assigned to any of the channels to be sold in the auction. 

So, if you have always wanted your own FM station, now may be the time to apply.  For the most part, these channels are not in major metropolitan areas - though some do reach some fairly sizable communities.  Do your diligence carefully before applying, as there may be problems with some channels that limit their use.  In fact, some of these channels are ones that have been returned to the FCC - either from prior auctions where no one bid for them, or as a result of a construction permit that expired when it was not constructed in a timely fashion.  Look for the hidden gems!

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The dates and minimum bids are set – and the next auction for new FM stations is a go for September 1, 2009. Applications to participate in the auction are due during the period June 16 to June 25, and must be filed electronically at the FCC, specifying on which of the 122 available channels an applicant is interested in bidding. Full, detailed auction instructions can be found in the FCC’s Public Notice, and the list of available channels and the minimum bids for each is available here. To give time for applicants to prepare their applications, the Commission has also initiated a variety of freezes on the filing of certain FM applications.

A freeze on any application or Petition for Rulemaking seeking a change in the channel of any channel proposed for use in this auction has been imposed effective immediately. Applications that shortspace any of the reference points for any of these stations are also barred. A subsequent freeze on the filing of any minor change application by an FM licensee will also be imposed during the June window. These freezes are to give applicants for channels the opportunity to evaluate which channels are worth bidding for, and to specify specific transmitter sites for certain channels (different than the reference coordinates) which will be protected during the auction process. Thus, applicants who see the potential for an increase in value of one of these channels that may come through the location of the station at a particular transmitter site can specify that site, protecting it and the value that they see. 

 The FCC procedures Public Notice sets out detailed instructions for bidders.  The Notice goes into detail about the anti-collusion prohibitions.  These rules forbid one bidder for a channel from talking about the auction with anyone else who has filed to bid for that channel - and the prohibition applies from the beginning of the filing window until the winning bidder makes its auction payment - even if one of the applicants drops out early in the proceeding. 

The Public Notice also goes into detail about the applicants obligation to do due diligence on the channels for which it bids.  An applicant cannot get a refund of its auction payments just because its transmitter site becomes unavailable, nor can it object if the station costs more to build than it expects - or if it does not make any money once it is built.  Buyer beware.

Important auction dates are as follows:

• Auction Seminar .............June 16, 2009
• Short-Form Application (FCC Form 175) Filing Window Opens ...........June 16, 2009; 12:00 noon ET
• Short-Form Application (FCC Form 175) Filing Window Deadline ....June 25, 2009; prior to 6:00 p.m. ET
• Upfront Payments (via wire transfer)................................July 31, 2009; 6:00 p.m. ET
• Mock Auction ...................................................................August 28, 2009
• Auction Begins..................................................................September 1, 2009

Potential applicants for these channels should carefully review the FCC's Public Notice setting out the bidding procedures.  Applicants who have not bid in prior auctions may want to consider attending the FCC pre-auction seminar, though it will leave little time for preparing an application as the seminar is on the first day of the auction window.  Opportunities may exist among these122 channels, but buyers need to do their research.  Those interested in ownership for the first time, or to increase ownership interests that they may already have, should start studying the available channels now, to be ready for the June filing window.

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