FCC still on track for May, 2014 start-date.
The FCC has announced the final rules for its upcoming auction of 22 AM radio construction permits.
As we reported last November, the auction – which is set for May, 2014 start date – involves applications filed a decade or so ago. In November, the FCC announced the eligible applications, the markets involved, and the proposed minimum bids for each market. It also solicited comments on those minimum bids and the auction procedures to be used.
In response, two applicants asked the Commission to remove their respective MX groups from the auction. Another applicant asked that the deadline for successful bidders to pony up their initial payments be delayed until the bidders can be reasonably sure that their proposed facilities will in fact be grantable – not an unreasonable concern. You can check out all the comments here. (Disclosure: a couple of our FHH colleagues, acting on behalf of one applicant, opposed the notion of removing its particular MX group from the auction.)
Tossing the various comments aside, the FCC declined to engage in any market carve-outs or payment postponements; instead, it’s full speed ahead toward the May auction.
The suggestion that the down payment deadline be postponed serves as a reminder to potential bidders of the FCC’s rigid “Buyer Beware” policy. If you bid on a license that turns out to be useless, the FCC does not let you off the hook. As is customary in broadcast auction notices, seven paragraphs of the FCC’s most recent notice caution bidders – twice in bold type – that bidders are expected to do their own due diligence. Bidders are warned that they are “solely responsible” and that “the FCC makes no representations or warranties” about the permits on the block. If you’re a bidder, consider yourself warned.
The opening bids for markets in the forthcoming auction range from $1,000 to $25,000. The window for filing Short Form Applications (Form 175), along with “minor change” remedial amendments, will be open from February 19, 2014 at noon until March 4 at 6:00 p.m. ET. Upfront payments are due in the FCC’s hands (by wire transfer) no later than April 7 at 6:00 p.m. ET. The auction will begin on May 6 and continue until the last bid is made.
Bidders are reminded that strict FCC rules against collusion apply to auctions. The Cone of Silence prohibiting bidders from discussing the auction with one another has been in place for years already, and will remain in place until the down payment deadline (which won’t be announced until after the close of the auction).