Auction 91, originally scheduled to crank up next March, has been moved back to April 27, 2011. The delay is attributable to the 2011 NAB Convention, scheduled to begin on April 9. The Commission acknowledged that, if the originally-announced March 29 auction start date were to stick, the auction might drag beyond the NAB’s start date – thus “present[ing] a challenge” for some participants. So we all get an extra month to get our auction ducks in a row.

As is customary in the auction process, the FCC has followed up its preliminary request for comments (issued at the end of September) with the issuance of a formal “Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments, and Other Procedures for Auction 91” (Auction 91 Notice).  You can find a final list of the permits up for grabs here. 

With the Auction 91 Notice the auction process shifts into high gear.

For the most part the Auction 91 Notice 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. 

If you’re expecting to be able to bid on 147 FM construction permits, like the September notice promised, you may be disappointed. The Auction 91 Notice lists only 144 permits. If you had your eye on the Tuba City, Arizona beauty (Channel 250C1, CP No. MM-FM767-C1) or the Union Gap, Washington honey (Channel 285A, CP No. MM-FM859-A), the bad news is that those have been removed. Turns out that neither is vacant and both have been “reserved for other applicant use”. (The third CP gone missing is technically still there. The original list, issued in September, included one permit twice: Channel 254C2 in Ennis, Montana, was inadvertently listed as both CP No. MM-FM411-C2 and CP No. MM-FM807-C2. Since the Commission hasn’t figured out a way to sell the same channel in the same community to more than one bidder, the latter, redundant, permit number has now been deleted.)

One other change – the Commission has tweaked the reference coordinates for Channel 255A in Adams, Massachusetts (CP No. MM-FM797-A).

As in last year’s Auction 79, with respect to the interaction of the Commission’s standard ownership attribution rules and eligibility for bidding credit (as an “eligible entity”), the Auction 91 Notice reminds would-be participants that the definition of “eligible entity” was revised in the Commission’s 2008 Diversity Order. Under the revised “equity-debt plus” aspect of that definition,

the holder of an equity or debt interest in the applicant [is permitted] to exceed the . . . 33 percent threshold without triggering attribution provided (1) the combined equity and debt in the “eligible entity” is less than 50 percent; or (2) the total debt in the “eligible entity” does not exceed 80 percent of the asset value, and the interest holder does not hold any equity interest, option, or promise to acquire an equity interest in the “eligible entity” or any related entity.

This may give rise to some additional opportunities for some applicants and investors.

On the purely procedural side, the WirelessTelecommunications and Media Bureaus (who administer auctions) have given themselves the power to impose alternative “stopping rules” if they deem such rules to be appropriate. Historically, the Bureaus have used a “simultaneous stopping rule” approach under which all CPs would remain available for bidding until bidding closes on all CPs simultaneously. As a practical matter, that meant that, even after the vast majority of bidding battles had been wrapped up, bidding was still technically “open” as long as even one CP was still being actively contested. While the Bureaus intend to adhere to this standard “simultaneous stopping rule” to start out with in Auction 91, they indicate in the Auction 91 Notice that they may opt to use alternative versions of the stopping rule, with or without prior announcement during the auction, if they think that doing so is appropriate.

Anyone who has any potential interest in participating in Auction 91 should review the notice in detail.  While there’s still more than five months to go before the bidding starts, anyone interested in participating should take advantage of the time to perform due diligence about the channels they’ve got their eyes on. Remember what the Commission has said repeatedly in the past (and has said yet again in the Auction 91 Notice):

The FCC makes no representations or warranties about the use of this spectrum for particular services. Applicants should be aware that an FCC auction represents an opportunity to become an FCC construction permittee in a broadcast service, subject to certain conditions and regulations. An FCC auction does not constitute an endorsement by the FCC of any particular service, technology, or product, nor does an FCC construction permit or license constitute a guarantee of business success.

(And yes, the Commission itself made that ominous advisory even more ominous with the boldface emphasis.)

Here are the important dates established in the notice:

January 31, 2011 – 12:00 noon ET – Short-Form Application (FCC Form 175) Filing Window Opens

February 10, 2011 – prior to 6:00 p.m. ET – Short-Form Application (FCC Form 175) Filing Window Deadline

March 21, 2011 – 6:00 p.m. ET – Upfront Payments (via wire transfer)

April 27, 2011 – Auction Begins

The Commission is also offering an online auction tutorial, which should be available as of January 31, 2011. (Look for an “Auction Tutorial” link on the FCC’s Auction 91 webpage.) It’s for newbies or folks who want to re-gain their auction chops. (The online tutorial replaces the bidder seminars which the Commission offered in the run-up to previous auctions.)

Additionally, the Commission will conduct a “mock auction” on April 25, 2011, again to permit folks to dust off any cobwebs and be ready to jump right in when the bidding starts for real on April 27.