Auction 94 - The Applications Are In

Auction 94, featuring 112 FM construction permits, is on track. The FCC has issued a notice  announcing that 109 potential bidders submitted applications to participate in the upcoming auction of 112 FM construction permits.  The auction is still scheduled to begin on April 23, 2013.

A total of 109 prospective bidders tossed in applications. Of those, 88 made the initial cut: the Commission has concluded that their applications were complete and acceptable, so they are assured of a bidding paddle and a seat in the bidders’ section (assuming, of course, that they get the necessary upfront payment filed in time). The other 21 applicants? Their submissions were lacking in one or another respect, so for the time being they’re on the outside looking in.  But we don't need to exile them to Loserville yet.  All 21 of the not-yet-in-the-door applicants should be receiving an overnight letter from the Commission laying out “the information that is required to make its application complete.” They’ll have until March 18, 2013 to resubmit corrected applications.

Any bidder – whether one of the 88 or one of the 21 – who wants to participate in the bidding  is required to wire the upfront payment to the FCC within the next week by 6:00 p.m. Eastern time on Monday, March 18, 2013.  Readers who plan to participate in the auction are advised to send your money to the FCC well before the deadline to avoid any unexpected delays.  The FCC is not sympathetic to bidders that wait until the last day; historically, the FCC has disqualified some late-paying bidders who claimed that their lateness was the fault of their banks.

As is commonplace with auction notices, the FCC dedicates three pages of its nine-page release to warnings about the anti-collusion rules.  Cautionary anti-collusion note:  Even if they opt not to participate further from this point on in the auction process, all 109 prospective bidders are prohibited from discussing the auction, the markets, the bids or the bidding strategies with other bidders in the same market until several weeks after the auction closes.  The anti-collusion rules are very strict and the FCC enforces them rigorously.  Cautionary example: Several years ago the FCC and the U.S. Department of Justice dragged a bidder through federal court in order to enforce penalties related to anti-collusion violations.

Of the 109 applicants, more than half are claiming new entrant bidding credits that would allow them to pay less than their bid amounts should they win.  A new entrant with no interest in any other mass communication outlet is entitled to a 35% credit, which means they would pay only 65% of their winning bid.  Bidders who own three or fewer mass communication interests are entitled to a 25% discount as long as there is no overlap between (a) any of their current interests and (b) a market on which they are bidding.  As is typical in these types of auctions, more than a quarter of the bidders advised the FCC that they wanted to bid on all 112 markets.  Selecting all markets does not necessarily indicate that the bidder will be active everywhere; rather, it may just reflect a preference to keep the maximum number of options open . . . or it may indicate that the bidder simply pressed the “Select All” button by mistake when filling out the form.

After the FCC receives funds from potential bidders, it will release another list of those bidders who are going forward in the auction.  The next list is expected at the beginning of April. Check back here for updates.

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