Broadcast Auctions

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The FCC has announced that it plans to hold an auction to award construction permits allowing the winners to build new FM radio stations. 131 total channels on which bids can be placed are included in the list of channels to be auctioned – with most being in the state of Texas. The auction is tentatively scheduled to begin on July 23. Working backward, that would mean that initial applications would likely be due sometime in May, and “upfront” payments equal to or greater than the minimum payments for the channels that an applicant ultimately wins in the auction will probably be due in June. To protect these allotments, the FCC has also imposed a freeze on the filing of FM applications that could affect applications for these channels.

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.
Continue Reading Want a New FM Station? FCC Proposes FM Auction in July, Lists Channels to be Sold, and Imposes a Freeze on Certain Applications

As we accelerate toward next year’s planned TV incentive auction, it seems like there is news almost every day of interest to television broadcasters who may be affected by the FCC’s efforts to clear TV spectrum so that it can be repurposed for wireless broadband use and sold to wireless companies and the subsequent repacking of remaining TV stations into a smaller TV band. Some of the broadcasters most directly affected by the auction and repacking will be LPTV stations who, thus far, have been promised no compensation should their operations be displaced by the repacking of the TV band, and offered no promises that they will have channels on which they can operate after the auction. The issues for LPTV stations, and the FCC’s proposals to deal with them, were to be addressed at a webinar on Tuesday, but the session was cancelled when the Federal government shut down because of snow in the DC area. The FCC yesterday announced that the webinar has been rescheduled for next Tuesday, February 24 – details in the Public Notice here. We wrote about the FCC’s rulemaking looking at what to do with LPTV stations after the auction here.

One of the big questions that many broadcasters have asked since the FCC rolled out the recent Greenhill Report (see our article here), setting out expected opening prices that will be offered to TV stations to surrender their TV channel, was how many stations could actually expect to be bought out in any market. The NAB released a study yesterday, suggesting that in some markets, it is very likely that the FCC will not need to buy out any stations, whether the auction tries to clear 120 MHz (20 TV channels, the maximum that the FCC has looked at clearing) or only 84 MHz (which some have thought was a more realistic goal). On the other hand, in several large markets and in markets in congested spectrum areas near some of those large markets, the FCC may need to get more than half of the stations in those markets to give up their licenses. The NAB computations are taken from FCC data, and the NAB provides many disclaimers that this information may change as auction plans change over time as different assumptions are made, and also are very dependent on the number of participants in adjoining markets. But the study is nevertheless one that gives some broadcasters an idea of how likely it is for them to really need to be an auction participant. See the NAB explanation of their procedures here, and the complete market-by-market chart of likely TV clearing needs here.
Continue Reading More Incentive Auction News – LPTV Webinar Postponed; NAB Study Looks At How Many Stations Per Market Will Need to Surrender Licenses for Successful Auction; More Auction Seminars Scheduled

With the recent release of the FCC’s report setting out the potential opening bids to buy out the spectrum of TV stations so that it can be resold to wireless companies for wireless broadband, station owners and operators around the country have many questions about how the auction will play out, and what they really …

On Friday, the FCC released a new report by the investment bankers advising them on the incentive auction, Greenhill and Company.  This report summarizes proposed auction procedures, but also sets out, on a market-by-market basis, the expected opening bids to be offered to TV broadcasters for the surrender of their spectrum so that the spectrum can be repurposed for wireless broadband use.  And these numbers are high – seemingly meant to attract broadcasters to consider possible participation in the auction process.  The opening numbers suggested by this report range from a high offer of $870 million in New York City, to a couple of million even in the smallest TV markets. 

While this report, and the table of expected opening offers that is part of that report, are in a format similar very to the Greenhill report that was released several months ago (about which we wrote here), those two reports actually represent two very different numbers.  The report released in the Fall set out prices that stations willing to surrender their frequencies might be expected to actually receive in an incentive auction.  The numbers in this report are merely the opening offers that will be made to stations to surrender their spectrum.  If these numbers attract more broadcasters willing to surrender their spectrum than the FCC needs to meet their spectrum-clearing targets (as they quite well may given the numbers being proposed), then the Commission will lower the offer in subsequent rounds of the auction, and the FCC will continue to lower the bids until they receive willing sellers of just the right amount of spectrum necessary to clear the FCC’s targets (which are yet to be set) for spectrum to be resold to wireless users.
Continue Reading FCC Releases Tentative Amounts for Opening Offers to TV Stations to Surrender their Spectrum in the Incentive Auction – and the Numbers Are High

As in any month, February has many impending deadlines for broadcasters and media companies – many routine regulatory obligations as well as some that are specific to certain proceedings.  First, let’s look at some of the routine filing deadlines.  On February 2, license renewal applications in the second-to-last filing window of this renewal cycle are due to be submitted to the FCC by TV stations in New York and New Jersey.  The last TV stations to have to file in a regular renewal cycle will be due on April 1, for those TV stations in Pennsylvania and Delaware.  After these stations complete their renewal filings, it will be another 5 years before another set of routine license renewals are to be filed.  Stations in Pennsylvania and Delaware should be broadcasting their pre-filing announcements on February 1 and February 16 (and there are also post-filing announcements that need to be run by the New York and New Jersey stations, as well as those in New England that filed their applications by December 1). 

Radio and TV stations in New York and New Jersey, as well as in Arkansas, Kansas, Louisiana, Mississippi, Nebraska and Oklahoma, should be placing EEO Annual Public File Reports in their public files (online for TV and paper for radio, with links to the reports on their websites) by February 1 if they are part of an employment unit with 5 or more full-time employees.  By February 2, noncommercial TV stations in Arkansas, Louisiana, Mississippi, New Jersey, and New York should file with the FCC their Biennial Ownership Reports, and noncommercial radio stations in Kansas, Nebraska, and Oklahoma should be filing those same reports on February 2.  Commercial radio and TV stations in the entire country will be filing their Biennial Reports in December of this year.  A guide to many of the regular FCC filing deadlines can be found in our Broadcasters Calendar available here.
Continue Reading February Regulatory Dates for Broadcasters – TV Renewals, EEO Reports, Lots of TV Incentive Auction Activity, OTT MVPD and Contest Comments, and Last-Minute January Deadlines for Webcasting

Yesterday, we wrote about a case involving an applicant for a new commercial FM station, where the FCC clarified its policies on reasonable assurance of transmitter site availability – holding that an applicant in an auction process can amend to a new site if it is found that its originally specified site is not available for its use.  That policy does not apply to applications for LPFM stations or noncommercial FM stations, which are not settled by an auction but instead through the application of a point system. That point system analysis can be preempted in a proceeding between mutually exclusive applicants for the same noncommercial radio station if one applicant is preferred on 307(b) grounds  (Section 307b of the Communications Act being a section that requires that the Commission make a “fair, efficient and equitable” distribution of broadcast service, which the FCC has interpreted to mean that it must evaluate the coverage area of proposed new stations and determine if any would bring new services to underserved populations so that the new service, in and of itself, is in the public interest and outweighs any point system analysis).  A Court of Appeals decision released last week clarified the application of the 307(b) policy. 

The noncommercial case involved an appeal of a “points system” grant favoring one applicant over another.  The loser complained that it would provide service to a substantially greater population, including a great number of people who did not currently receive two or fewer noncommercial services.  Under the FCC’s policies, an applicant will receive a 307(b) preference that will preempt a points system analysis, but only if it meets certain specific coverage requirements (see our discussion of the FCC’s analysis of which competing applicant for the same noncommercial channel will be preferred here).  In this case, the requirement at the center of the argument was one that says that, to be qualified for a 307(b) preference, the applicant’s proposed new station must propose a coverage area providing service to at least 2,000 people that don’t already receive two noncommercial radio services, and the population in the area currently receiving fewer than two noncommercial services must constitute at least 10% of the people to be served by the applicant.  Here, the applicant appealing its loss covered over 28,000 people who received only one noncommercial service, while the winning applicant would provide a second noncommercial service to fewer than 5,000 people.  But, as the area receiving only one noncommercial service constituted less than 10% of each applicant’s service area (about 9.6% of the loser’s coverage and about 5.5% of the winner’s), no applicant was preferred on the 307(b) criteria, and the winner was preferred on other comparative criteria.
Continue Reading FCC Standards for Comparing Service by Mutually Exclusive Applicants for New Noncommercial Radio Stations Clarified by Court of Appeals

Last week, there were two decisions that clarified FCC processing policies for new broadcast stations – one dealing with applications for commercial stations, and the other with applications for noncommercial FM stations.  The commercial case made clear that an applicant for a new FM station in the auction process need not have reasonable assurance of the transmitter site that it specifies in its application at the time it files the application, as long as it amends to an available site before the application is granted.  The second, a decision of the US Court of Appeals, upholds the grant of a new noncommercial FM station as a result of a point system analysis, and clarifies the 307(b) preference and when it can be decisive in noncommercial comparative cases.

In the commercial case, a bidder who lost a broadcast auction complained to the FCC that the winning bidder for a new FM station did not have “reasonable assurance” of the availability of the transmitter site that it specified after it filed its “long-form application” on Form 301 after being the successful bidder in an FCC auction for the new channel.  The long-form application, filed shortly after the conclusion of a broadcast auction, is supposed to contain the complete engineering showing of the applicant specifying the technical facilities for the new station that it plans to construct.  The facilities that are specified in this application are reviewed by the FCC staff to make sure that they comply with all FCC technical rules. In this case, the tower site proposed in the Form 301 was apparently owned by one of the owners of the petitioner, and the high bidder did not approach the tower owner for permission to specify her site in the application.  Nevertheless, the FCC agreed to grant the application after the winning applicant amended its application to specify an available site. So what was the issue?
Continue Reading Two Decisions Clarifying the Processing of FCC Applications for New Commercial and Noncommercial Broadcast Stations – Auction Applications and Reasonable Assurance of Transmitter Site Availability

Each year, at about this time, we pull out the crystal ball and make predictions of the issues affecting broadcasters that will likely bubble up to the top of the FCC’s agenda in the coming year.  While we try each year to throw in a mention of the issues that come to our mind, there are always surprises, and new issues that we did not anticipate. Sometimes policy decisions will come from individual cases, and sometimes they will be driven by a particular FCC Commissioner who finds a specific issue that is of specific interest to him or her.  But here is our try at listing at least some of the issues that broadcasters should expect from Washington in the coming year.  With so many issues on the table, we’ll divide the issues into two parts – talking about FCC issues today, and issues from Capitol Hill and elsewhere in the maze of government agencies and courts who deal with broadcast issues.  In addition, watch these pages for our calendar of regulatory deadlines for broadcasters in the next few days.

So here are some issues that are on the table at the FCC – starting first with issues affecting all stations, then on to TV and radio issues in separate sections below. 

General Broadcast Issues

There are numerous issues before the FCC that affect both radio and television broadcasters, some of which have been pending for many years and are ripe for resolution, while others are raised in proceedings that are just beginning. These include:

Multiple Ownership Rules Review: In April, the FCC finally addressed its long outstanding Quadrennial Review of the broadcast multiple ownership rules – essentially by punting most of them into the next Quadrennial Review, which probably won’t be resolved until 2016.  Issues deferred include any revisions to the local ownership limits for radio or TV (such as loosening the ownership caps for TV stations in smaller markets, which the FCC tentatively suggested that they would not do), any revision to the newspaper-broadcast cross-ownership rule (which the FCC tentatively suggested that they would consider – perhaps so that this rule can be changed before the newspaper becomes extinct), and questions about the attribution of TV Shared Services Agreements (which the FCC is already scrutinizing under an Interim Policy adopted by the Media Bureau).
Continue Reading What Washington Has in Store for Broadcasters in 2015 – Part 1, What’s Up at the FCC

In a case decided last week, the FCC decided to clarify its policies on typos in FCC applications for radio stations.  While one might not think that a typo is such a big idea, in connection with FCC application filing windows, when multiple applicants may be seeking the same frequency or channel in …

The FCC adopted proposed auction procedures for its incentive auction at its meeting on Friday, and thus far has released a Fact Sheet on these procedures by which it plans to buy back spectrum from broadcasters and resell it to wireless companies for wireless broadband uses.  The tentative procedures, along with the recent “Greenhill Report” setting possible prices to be paid to television stations who are willing to surrender their channels for the FCC to resell to wireless companies (see our summary here), are setting the stage for a series of meetings with broadcasters to attempt to convince enough to participate in the auction to satisfy the FCC’s goals for the auction – goals that also became a bit clearer from Friday’s releases.  Further information on the auction procedures is expected soon in a more detailed Public Notice fleshing out the proposals outlined in the Fact Sheet so that comments can be filed by the end of January. 

The fact sheet is not the detailed notice of auction procedures that some broadcasters may be familiar with from participating in past broadcast auctions – that will apparently come soon in the Public Notice that it summarizes.  But it does provide an outline of proposed general principles that will be applied to the incentive auction.  Initially, it proposes that the FCC would set opening prices for each station – prices at which the FCC would offer to pay the licensee to give up its spectrum.  The prices would be set based on an analysis of two factors: (1) the impact that the station would have on the repacking of the broadcast spectrum after the auction because of the interference that it causes and (2) the population covered by the station.  If a station agrees to move to the VHF band instead of surrendering its licenses altogether, it would receive somewhere between a third and a half of the opening price if it accepts a high VHF channel, and between 67 and 80% of the opening price for a low VHF channel.  According to the fact sheet, the prices that will initially be offered to the broadcaster will be initially set high, and will be lowered as the auction progresses until the prices reach a point where there are just enough broadcasters willing to take the lowered offer to clear the amount of spectrum that the FCC needs to fill the demands of the wireless users.  There has also been introduced the concept of a “dynamic reserve price,” setting a limit on how much the FCC is willing to pay some stations for giving up their spectrum, which could conceivably result in the amount that they are offered being lowered even when it is known that they cannot be repacked into the amount of the spectrum that remains available in the smaller post-auction TV band.   How much spectrum must be cleared for the auction to go forward?
Continue Reading Putting Details to the Incentive Auction – FCC Asks for Comments on Fact Sheet on Auction Structure, and Prepares for Meetings with Broadcasters