FM Translator Application Update: Last Chance Settlement Window Opened

Media Bureau provides MX applicants one last opportunity to avoid going to auction.

If you’ve still got one or more FM translator applications pending from the infamous 2003 window, listen up! The Media Bureau has opened a 62-day “Settlement Period” – up to and including July 22, 2013 – during which applicants with mutually exclusive (MX) applications may attempt to resolve their differences through engineering amendments or settlements.

For those of you who may have forgotten exactly which (if any) of your applications may still be alive and kicking, the Bureau has provided a list of the apps that the Bureau thinks are eligible for settlement (i.e., applications MX with one or more other applications). You can check that list out here (or in a more sliceable and diceable Excel version here). There are a total of 539 MX groups, so you’d better start looking now.

Important alert: The Bureau recognizes that its list may not be 100% complete, and it expressly encourages anybody who believes that one or more applications may have been omitted to get in touch with the Bureau immediately. Remember, to be on the list, your application has to be MX with at least one of the applications already listed.

All MX groups are heading to auction. But the Settlement Period affords pending applicants the chance to avoid the auction scenario by eliminating mutual exclusivities, either through negotiated settlement or unilateral amendment. Proposed negotiated resolutions may be universal – i.e., involving all members of a particular MX group – or non-universal – i.e., involving less than all members. But any proposed resolution – whether unilateral or negotiated – must “eliminate all mutual exclusivities between at least one application and all other applications in the MX group.”

In other words, all the applicants in a particular MX group can get together and work out a deal, or any subset of applicants can do the same, or just one applicant may be able to figure out a technical way to get itself out of mutual exclusivity hell. But in any of those situations the bottom line has got to be that at least one application is freed of all mutual exclusivities and thus becomes a (theoretically) grantable “singleton”.

The concept of “negotiation”, of course, requires that the MX applicants communicate among themselves. But as we all know, in the pre-auction context, MX applicants are absolutely prohibited by the FCC’s rules from engaging in any application-related communications with one another. No problem. The regulatory Cone of Silence has been lifted during the Settlement Period to permit inter-applicant discussions looking to resolve mutual exclusivities.

There are, of course, a number of gotcha’s here. For example, negotiated settlements are subject to the standard limitations on such deals, including restrictions on reimbursement. That means, among other things, that a dismissing applicant cannot expect to be paid anything more than its “legitimate and prudent expenses” in return for its dismissal. (The rules provide that that “legitimate and prudent expenses” cap does not apply to “bona fide merger agreements”, although whether such a merger arrangement might make sense in the FM translator context remains to be seen.)

And for anyone contemplating a unilateral engineering route out of mutual exclusivity, note that any amendment must be “minor” in nature, and it cannot create any new mutual exclusivities. Heads up, too: if the amendment specifies a transmitter site within either (a) 39 kilometers of any Appendix A Market and/or (b) any Top-50 Spectrum Limited Market, the amendment must include a Preclusion Showing. (For a refresher on Preclusion Showings, check out our previous posts on the subject.)

One more caution flag on the technical amendment front: our colleague Matt McCormick reports that, according to some informal advice from the Bureau’s staff, technical amendments will be processed on a “first-come-first-served” basis. That means an earlier-filed tech amendment will cut off any later-filed amendments that happen to be MX with the earlier-filed. So anyone contemplating an engineering fix should act sooner rather than later.

The Bureau’s public notice lays out the various procedural niceties involving in getting any proposals filed. We won’t get into the deep weeds on these here, but readers should know that some items are to be filed on paper and some electronically through CDBS – and there are even very specific instructions for how CDBS items are to be identified in the pre-form. Anyone contemplating the submission of any such proposal should review the notice carefully and be sure to comply with all details. 

The big thing for all to remember: the deadline for any settlement proposal or technical amendment is July 22, 2013.

The Bureau’s notice also includes an additional opportunity for anyone proposing a noncommercial educational (NCE) station as the translator’s primary station to avoid dismissal. As we reported last month, applicants seeking NCE authorizations are not permitted to participate in auctions. Since that prohibition cropped up after the 2003 FM translator filing window had come and gone, a number of still-pending applicants identified themselves as “NCE”, which was the kiss of death. To give those applicants a chance to avoid dismissal, the Bureau allowed them a brief opportunity to “de-select” the NCE status. As it turns out, though, there was yet another potential problem: an FM translator proposing an NCE station as a primary station is deemed to be NCE, so even if an applicant has chosen not to identify itself as “NCE”, it’s still subject to dismissal of its application specifies an NCE primary. 

Because of that, the Bureau is giving applicants in that position the green light to amend their applications to specify a non-NCE primary station. Such amendments will be treated as “minor”, but they must be submitted during the Settlement Period, i.e., no later than July 22, 2013. Failure to take care of this detail will result in the summary return (as unacceptable) any application specifying an NCE primary station – even if the applicant in question took advantage of last month’s “de-selection” opportunity.

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