FCC schedules Auction No. 84 for May, 2014, with 22 AM permits up for grabs.

Do you remember what you were doing in January, 2004? That’s not quite ten years ago. George W. Bush was still in his first term in office. The Janet Jackson Super Bowl flap still hadn’t happened. “Friends” and “Frasier” were still on the air; “House” and “Desperate Housewives” hadn’t even debuted.  Facebook was still just a glimmer in Mark Zuckerberg’s eye.

And some of you were apparently filing applications for AM radio construction permits.

We know that because 53 AM applicants, vintage January, 2004 (and four more from 2007), have just been identified as possible participants in a “closed” auction announced by the FCC. The auction, featuring 22 AM construction permits, is set to begin on May 6, 2014.

The permits are for service areas from Oregon down to Florida. Opening bids range from as little as $1,000 (for, e.g., beautiful Lovelock, Nevada) up to $25,000 (for Culver City, California).  You can see a list of the lucky few eligible to bid, the markets they’ll be able to bid on, and the minimum opening bids here.

The auction – Auction No. 84, for those of you keeping track – is the culmination of a decade’s worth of work by the FCC and broadcasters.  The applications were among those filed in 2004 in response to a five-day window (first announced in November, 2003) for proposals for new AM stations or major modifications to existing stations.  

About 800 applications were submitted. The FCC then spent a year and a half reviewing them all, identifying mutual exclusivities and sorting them into various categories for processing. Singletons (i.e., applications not MX with anybody else) could be, and were, granted. Some groups of MX applications were permitted to resolve their differences through settlement. In MX groups involving applications proposing different communities of license, applicants were required to submit Section 307(b) showings.  (Such showings consist of elaborate piles of data designed to prove that the applicant’s proposal would result in the most “equitable distribution” of radio service.  Derived from Section 307(b) of the Communications Act, a preference awarded on the basis of such a showing can trump other factors and even result in a grant without the need for an auction.) Others were required just to sit tight and wait for the auction.

The vast majority of MX groups were able to work out non-auction solutions.  But, as it turned out, 22 of those groups (comprising 57 applicants in all) could not.  And those 57 – assuming that they’re still around and still interested – will now get to duke it out in an auction to determine the winners. 

Whether there is still interest by the parties to participate in the auction is another matter.  Since the applications were first submitted, a lot has happened (including Olympics in Athens, Beijing and London and, let’s think . . . oh yeah, a major economic crisis sending the U.S. into a years-long recession).  So much has changed in the industry and elsewhere that applicants may not want to pursue their applications.  Nonetheless, the FCC will require any bidder, even if he or she is the only one to show up, to pay the minimum bid for a permit.

As is customary, the FCC has proposed numerous rules which will govern how the auction is conducted.  The rules are nearly identical to auction rules from the past. Parties who wish to comment on the proposed rules have until December 6, 2013 to submit comments.  Reply comments are due on December 20.

Potential bidders who have submitted applications for this auction are reminded that the FCC rules prohibit colluding with other bidders.  In other words, any chance of any amicable resolution has now gone by the boards, and auction participants canNOT communicate with their opponents any more.