The FCC is preparing to dole out 130 FM channels that are currently vacant via an online auction. But before what’s known as Auction 106 begins April 28, 2020, here’s what one needs to know from communications attorneys who’ve been down the auction path before.
“If past is prologue, there will be multiple bidding rounds, the FCC will step up the pace by having more rounds per day as the auction proceeds, and when bidding activity falls below a certain level, the FCC will end the auction,” attorney Peter Tannenwald of Fletcher, Heald & Hildreth, writes on CommLawBlog. But the Media Bureau is seeking comments on a number of proposed changes to the bidding procedures (Docket 19-290). Comments are due Nov. 6 with the deadline for reply comments set for Nov. 20. If enough people file comments saying the system ought to be changed, the FCC might try something different in this go-round.
But don’t look for the agency to reverse its policy that imposes big fines on parties that make bids and then withdraw them, or that place a winning bid and fail to pay on time. “If you play, you have to play for keeps,” Tannenwald warns.
Under FCC rules, if more than one party applies to buy the same frequency, they’re considered “mutually exclusive,” and the construction permit is awarded via a competitive bidding process or auction. The first step is a time window for filing “short form” applications on FCC Form 175. As Tannenwald explains, the short form includes an expression of interest, detailed ownership information and some basic technical parameters. “If only one short form is filed for a channel, the filer will be invited to file a full long-form “with all of the usual legal and engineering details of its proposal, along with the filing fee for an application for a new station,” he writes. But if more than one short form is filed, the FCC will hold an auction, in which case only the high bidder will file a long-form.
And don’t forget about the FCC’s anti-collusion rule. Once short forms are filed, no applicants are allowed to talk to any other filer about anything having to do with the auction in any community – not just those communities where the two parties filed applications. “You can’t go to dinner, meet at a bar, post on Facebook, launch a blimp or figure out some other way to let another applicant know your auction plans,” Tannenwald cautions.
In anticipation of Auction 106, the FCC has put a freeze on applications or proposed allotments that could impact any of the 130 channels to be auctioned off. “That freeze prohibits any application that would limit applications at the reference points of any channel included in the auction,” attorney David Oxenford of Wilkinson Barker Knauer writes on Broadcast Law Blog. “The freeze also prohibits any rulemaking or proposed allotment that would limit applications at those reference points, as well as any change in the channel or reference points for any of the proposed new stations.” In other words, until winning applicants file their long-form applications after the auction, all FM applications and rulemakings need to protect these 130 channels. After that, the freeze will lift.
Oxenford also offers practical suggestions for anyone looking to start a station from scratch. After looking through the list of available frequencies, if you find one that interests you, “you need to start your due diligence on the channel now, as bidders are responsible for ensuring that the channel for which they are bidding can be built and will serve the intended audience,” Oxenford explains. “Start preparing now to file your initial application to participate at some point in the next few months.”