Spectrum auction participants – especially for FM permits – should be on the look-out for potential FAA hang-ups before the bidding opens

With an auction of new FM construction permits in the pipeline, we offer this word of caution: potential participants should be careful to do their homework before they bid. As the FCC makes incredibly clear in its auction announcements (check out Paragraphs 30 and 34 of the recent Auction 91 announcement, as an example), there are no guaranties that actual stations can be built by the “winners” of the auction.

What’s the worst case scenario, you ask? Consider the story of a guy who, in 2004, was the successful bidder for an FM CP in beautiful, scenic Pacific Junction, Iowa. The bidder bid – and, more importantly, paid – big bucks ($4.4 million) for the permit. He also ran up considerable additional costs in upgrading the CP once it was issued and paying to move another station out of the way. 

But when he went to build the station, he got the bad news: it couldn’t be built.

Turns out that the proximity of a boatload of air traffic control and navigation facilities prevented use of the primary FM channel, and the number of frequencies used by the FAA in the area precluded use of any alternative channel (either by the FM bidder or by the FAA).

Not surprisingly, the bidder has been trying since early 2009 to get his money back from the FCC. His claim: there was no way that he could have discovered that the FAA’s use of radio devices in the vicinity of Pacific Junction would foreclose his use of the channel he bought and paid for. That’s because the FAA’s navigation frequency databases are not publicly available (either through the FAA or the FCC). 

As far as we can tell, the refund request is still pending. However, in a potentially hopeful sign for the bidder, the Media Bureau recently ordered deletion of the station’s channel from the Commission’s records – thereby officially agreeing with the bidder that no station could be built which would meet the FAA’s criteria and the FCC’s spacing requirements. The Bureau also deleted the construction permit and call sign issued to the bidder – all good indications that the Media Bureau, at least, is sympathetic to the guy’s plight.

Unfortunately for the bidder, though, the Media Bureau has no control over whether the bidder’s payment will get refunded. That’s something that the Wireless Bureau (charged with responsibility for auction matters) and, possibly, the Managing Director will have to deal with. The full Commission might also have to get involved, given the novelty of the matter. The government, after all, is not generally in the habit of refunding millions of dollars because the channel didn’t pan out as expected – that’s why the FCC includes the boldface disclaimer in its auction notices, for crying out loud. So no matter how sympathetic the Media Bureau might be, the most the Bureau could do would be to exert moral suasion, for what that’s worth.

Whatever happens to the Pacific Junction bidder, the rest of us can learn from his situation. And the take-away message here is clear: before you get cranked up to bid for a new FM permit, be sure your engineer studies all possible impediments to actual construction of the station you’re bidding on. 

That includes FAA-related impediments. Bidders don’t always recognize that the FAA is a significant user of radio frequencies (particularly near the FM band). The FAA has historically tried to assert its jurisdiction over the initial authorization of FM stations. Its efforts along those lines caused considerable grief to many applicants, and to the FCC, back in the 1980s and early 1990s. The FCC and FAA hunkered down and worked out an arrangement that seemed to resolve matters for a while but, as we reported this past summer, the FAA continues to hold fast to its notion that it can impose its own standards on the use of FM channels. And if you need any more proof of that, ask the Pacific Junction guy.

Because of all this, potential bidders in any auction – and especially any FM auction – should take care. If you’ve got your eye on a particular CP, it would probably be a very good idea to first see how many FAA-related RF devices are deployed in the vicinity of the CP. You may not be able to determine the frequencies they’re using, but just getting some idea of the raw number of FAA devices in the area can be helpful. Recall that the usual work-around for FAA RF problems involves replacing some of their gear with transmitters using different frequencies. If there are many FAA units in operation in the same area, that work-around may not be available. (That apparently was the problem in Pacific Junction.)

Another thing to do: if you’re planning on putting your antenna on an existing tower, ask the tower owner to let you see the FAA paperwork related to the tower. It’s possible (as was apparently the case in Pacific Junction) that the tower’s original determination of no hazard includes a provision requiring the owner to alert the FAA before any new transmitting antennas are installed on the stick. The existence of such a condition won’t necessarily tell you whether the FAA will have a problem with your proposal, but it will for sure let you know that the FAA will be taking a close look at it.

While it may not be possible to determine with 100% certainty that a potential FAA issue is lurking in the shadows, the probability – or even the mere possibility – that that may be the case could influence how much you’re willing to bid.

Good luck.