Start saving your nickels and dimes. The FCC has announced that it will auction 147 FM permits next Spring. Check out a list of the allotments coming up on the block here.
Although the auction (dubbed “Auction 91”) isn’t scheduled to open until March 29, 2011, connoisseurs of the Commission’s auction processes know that there’s plenty of paperwork to get out of the way before the bid paddles start going up and the gavel starts coming down. The first step? A request for comments on proposed procedures, upfront payments and minimum opening bids. Comments are due by October 13, 2010, replies by October 27, 2010.
The procedures the Commission has put out for comment do not contain anything different from past FCC broadcast spectrum auctions. Perhaps most notably, the FCC’s notice includes the standard four-paragraph disclaimer warning potential bidders that the government cannot guarantee that the spectrum at auction will actually work. While such disclaimers are regrettable – hey, if the government’s going to sell you spectrum to use for a broadcast station, shouldn’t you be able to assume that the spectrum will in fact serve that purpose? – caveat emptor is the way to go here: you don’t want to end up like the guy in Auction 37 who spent more than $4 million on a permit in scenic Pacific Junction, Iowa, only to discover that the spectrum couldn’t be used because it would interfere with nearby FAA communications. Oops.
In light of that consideration, potential bidders should roll up their sleeves now and investigate thoroughly any permits they may have their eye on. And there are a lot to look at this time around: a list of 147 FM frequencies, ranging from Class As to Class C3s, spread out over 39 states and one territory (Guam). (Veterans of last year’s Auction 79 may recognize 37 of the allotments, which went unsold back then and are now being trotted out again.)
Proposed starting bids go all the way from $1,000 to $100,000. The vast majority (80%) of proposed openers come in at $25,000 or less, and 33% start at less than $10K. The priciest allotments are proposed to open at $100K per. Don’t assume, though, that the final bids will necessarily be in the same ballpark as the opening bids: it only takes two determined bidders to goose the price of any permit skyward.
The FCC’s release doesn’t mention bidding credits for new entrants, but the smart money figures that such preferences will be awarded in this auction as they have been in virtually all other auctions. Generally, a 35% bidding credit is available to bidders who own no other broadcast stations and a 25% credit is given to bidders who own three or fewer stations (provided that none of those stations is in the same market as the target auction permit).
Check back with CommLawBlog for updates.
