Lawyer Article

The FCC has established the filing deadlines for the upcoming November auction of 290 FM broadcast station construction permits. The Commission's revised listing of the 290 FM allotments is attached to this memorandum. This auction, which is designated as Auction No. 37, was originally scheduled to commence in February of 2001 but was postponed due to uncertainties as to how non-commercial educational applicants would be treated.

To participate in this FM auction, an FCC Form 175 application must be electronically filed on or prior to August 6, 2004 at 6:00 p.m. Eastern time. This Form 175 will specify the particular channels in which an applicant desires to bid and seeks a variety of applicant information including ownership, other attributable media and whether the applicant is entitled to bidding credits. There is no FCC filing fee due for this Form 175 application.

Subsequent to the filing of Form 175 applications, upfront payments must be submitted to the FCC by September 24, 2004. If only one allotment is to be bid upon, the upfront payment is the amount shown on the attached listing. If an applicant intends to bid on multiple allotments, the upfront payment is the sum of those allotments upon which an applicant desires to be a high bidder during any particular auction round. Upfront payments are increased by 50% for any bidder with an attributable owner who has ever been in default of any non-tax governmental obligation.

Applicants may be entitled to bidding credits based upon other attributable media interests held. If an applicant and its attributable owners hold three or fewer interests in specified mass media facilities, provided an applicant is not bidding on a facility with a contour that overlaps the contour of an existing interest, the applicant is entitled to a 25% auction bidding credit. If an applicant and its attributable owners have no attributable interests in specified mass media facilities, the applicant is entitled to a 35% auction bidding credit. For example, an applicant with a 25% auction bidding credit that submits a winning $200,000 bid on a particular FM construction permit is only required to pay $150,000.

The auction itself commences on November 3, 2004. The auction will continue in successive rounds until no higher bid is received for any of the 290 available FM construction permits. Bidders may submit bids through the Commission's web site or by telephone. At the conclusion of each round, a list of high bids and bidders will be made available.

After the auction, winning bidders must submit 20% of the winning bid amounts within ten business days of the FCC's notice closing the auction. The remainder of the winning bid amounts are then due after a petition to deny time period has elapsed.

This auction of 290 FM construction permits is just the first of several broadcast facilities auctions that will take place in the foreseeable future. In addition to these 290 FM allotments, there are another several hundred FM allotments that have been allotted and remain to be auctioned. There are many thousand pending mutually exclusive FM translator applications that may be subject to auction. Further, as a result of the AM new and major application filing window earlier this year, there are a large number of AM facilities to be auctioned. Only those applicants who already filed Form 175 applications will be eligible to participate in the FM translator and AM auctions. There will be another filing window subsequent to this FM auction for the FM allotments not included in this first list of 290 FM allotments.

The complete FCC public notice giving extensive auction details is available at: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-04-1699A1.pdf. The FCC Form 175 which, as noted above is a predicate to participating in this FM auction, must be filed on or prior to August 6, 2004.