CommLawBlog : Broadcast & Communications Lawyers & Attorneys : Fletcher Heald & Hildreth Law Firm : Telecommunications, FCC Regulation, Communications Act

FCC gavels Auction 79 to a close

After 50 rounds of bidding which spanned three weeks, Auction 79, featuring 122 FM construction permits, came to an end late on the afternoon of September 15. Unlike previous auctions which raked in tens of millions of dollars for the federal coffers – like the 2007 auction that brought in $21 million or the 2006 affair that fetched $54 million – Auction 79 barely brought in a paltry $5 million.

When the FCC announced that it was going to conduct an auction in the current economic climate, several industry participants complained. Those who predicted a lack of enthusiasm were proven correct. Out of 122 construction permits on th auction block, more than half attracted only the minimum bid or no bid at all. Thirty-seven permits will have to be trotted back out in a few years for re-auction because nobody showed any interest in them this year.

A few markets did spark some spirited bidding that nudged the final bids above the initial minimums. However, there were no seven-digit pay-outs this time around, unlike auctions past. The top three priced permits were in California and Florida with Murietta, CA, and Palm Coast FL, each commanding bids of around a half-million dollars. Detailed auction results may be found here.

Readers are reminded that the FCC's very strict anti-collusion rules remain in effect for several more weeks. Folks who submitted a Form 175 in this auction – even if they ended up not bidding at all –  should refrain from communicating with one another about the auction.

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With 13-days-to-go-and-counting, Auction 79 is looming large. The Commission has issued a notice: (a) reminding everybody about deadlines and procedures; and (b) identifying the 77 bidders who have made it through to the preliminary maze and are now qualified to participate in the auction, as well as the 44 applicants who failed to make the cut for one reason or another.

Registration materials are being sent to the 77 qualified bidders. If you are in that group and have not received those materials by 12 noon (ET) on Wednesday, August 26, then you’d better get on the horn to the FCC’s Auctions Hotline directly at (717) 338-2868 pronto. You can’t bid unless you have those materials in hand, and the Commission has made it clear that it’s the bidder’s responsibility to be sure that those materials arrive.

The Commission will conduct a mock auction starting on August 28 at 10:00 a.m. (ET). It’s open to all qualified bidders. If you’re a neophyte or tyro at this whole broadcast auction process, the Commission recommends that you take a whirl at the mock auction. The mock auction will be conducted just like a real auction, except it will involve only 20 of the available 120 CP’s, and each bidder will be assumed to have applied for (and to have thrown in up-front payments sufficient to cover) all 20 CPs.

The Real Deal Auction itself is still set to kick off at 10:00 a.m. (ET) on Tuesday, September 1. Each of the first four rounds will last an hour, and there will be a one-hour break between each. (In other words, Round 1 runs from 10:00-11:00 a.m.; Round 2 goes from 12 Noon-1:00 p.m.; Round 3 goes from 2:00-3:00 p.m.; and Round 4 goes from 4:00-5:00 p.m.) The timing of later rounds will be determined by the Commission based on the progress of the auction. Changes in scheduling will be announced through the FCC Auction System.

Caution: As we have reminded Auction 79 participants before, the anti-collusion rules are in effect, and will continue to be in effect until further explicit notice from the Commission.

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If you’re one of the applicants (and there are fewer than 100 of you out there, so you know who you are) who have signed up to participate in Auction 79 in September, it’s crunch time. Or more accurately, ka-ching time. The FCC has released its latest public notice, welcoming into the auction parlor the applicants whose applications were complete, and warning others about the steps they must take, pronto, if they want to get in the game. Most importantly, though, the latest public notice reminds one and all that the deadline for up-front payments is Friday, July 31 at 6:00 p.m. (EDT) – remember, the money has got to be in the FCC’s bureaucratic hands by that time.

As we have previously reported, the Commission is putting 122 FM channels on the block. It appears that about half the folks who filed are going after one channel and one channel only. About a dozen have specified two channels, and others have specified various numbers of channels, including one applicant who has targeted 120 channels and eight who have listed all 122.

The Commission identified 26 applications as “incomplete”, but all is not lost for them, as they all may be able to get back in the game. The FCC will be sending each of them its own billet doux, by overnight delivery, cluing them into why their apps were deemed “incomplete”. They will then have until 6:00 p.m. (EDT) on July 31 to (a) resubmit their applications with all the deficiencies corrected, and (b) make the necessary up-front payment. (The window for filing corrected applications opened with the release of the public notice, so if you’re in this category, you can get cracking now.)

Another six applications were rejected because the applicants were disqualified, mainly because they checked “yes” to the noncommercial election question on Form 175. (NCE applicants are not permitted to compete against mutually exclusive applicants in auctions for commercial channels.)

The public notice provides useful guidance on the payment requirements, the process for resubmitting incomplete applications, and the need to keep information in previously-filed applications updated.  Perhaps most importantly, it includes a detailed reminder about the anti-collusion rules. The Commission takes those rules VERY seriously, and it expects – nay, compels – all applicants to do the same. If you are not yet familiar with them but have filed applications in this auction, you should drop everything and bone up on the anti-collusion rules immediamente.  (If you don’t believe us, check out the materials at the FCC’s anti-collusion link.) For Auction 79, the anti-collusion rules became effective as of June 25 at 6:00 p.m. (EDT), and will stay effective until the Commission gives the all-clear signal in a public notice to be issued after the bidding closes.

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The deadline for FM Auction 79 short-form applications is just around the corner.

Next week will be June already, and we are fast approaching the deadline for applications of the upcoming Auction 79, featuring 122 vacant FM channels up for grabs.  As we blogged back in April, even though the auction itself is not scheduled to bebegin until September, in order to participate you will have to file your short-form application(s) (Form 175) by 6:00 p.m. Eastern Time on June 25.

And all you existing stations that might be thinking about filing for a mod in the near future: Don’t forget that the FCC will not accept any applications for changes in existing FM stations between June 16 and June 25.  If you want to avoid having your plans messed up by any new applications that might be filed for channels on the auction block, you should get your mod application(s) filed by June 15.

For anyone interested in the auction, the FCC will hold a freebie pre-auction seminar, with hands-on demos, to teach you the basics of how to use their online bidding system.  The seminar will be at 10:30 a.m. on June 16. (Since the application filing window opening at high noon the same day, any lessons you learn at the seminar should still be fresh in your mind.)  Registration for the seminar closes June 12.  The registration form may be found here. You can participate either in person at the FCC’s offices in Washington or online at http://wireless.fcc.gov/auctions/79/.  Select the “Auction Seminar” link.

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With Auction 79 fast approaching, the Commission has frozen, effective immediately (i.e., as of April 17, 2009): (a) all applications proposing to modify the reference coordinates of any of the 122 FM channels scheduled to hit the blocks in Auction 79 (currently slated to kick off in September); and (b) all petitions or counterproposals that propose any change in channel, class, community or reference coordinates for any of those 122 channels. (Can’t remember what channels are up for sale in Auction 79? Click here for the current list.) This freeze will remain in effect until the day after the deadline for Auction 79 long form applications – which will likely be sometime late in the Fall, at the earliest.

The Commission also announced that it will not accept any commercial or noncommercial minor mod applications between June 16-25, 2009. That’s the filing window for short form (Form 175) applications for Auction 79.

These freezes are standard operating procedure when it comes to broadcast auctions. The goal is to avoid the creation of any conflicts (unforeseeable or otherwise) with auction proposals that could muck up the auction process.

For more information on the auction itself, see our relating post here.

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The Commission is hustling to get Auction 79 ready to roll – the agency has already followed up its preliminary request for comments (issued at the end of February) with the issuance of a formal “Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments, and Other Procedures for Auction 79”  (Auction 79 Notice).  With the Auction 79 Notice the auction process shifts into high gear.

The Auction 79 Notice contains few surprises. It addresses and resolves a small number of proposed tweaks to its auction processes, but for the most part adheres to the procedures which have been used for broadcast auctions over the years. If you (a) are interested in participating in the auction but (b) are not familiar with those procedures, you should start now to get a handle on how FCC broadcast auctions work. The system is not always intuitively obvious, and unwary (and unknowing) bidders are at a very distinct disadvantage when the action starts. 

There are at least two notable changes from the past.

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