Auction 98 – The Applications Are In
Auction 98, featuring 131 FM construction permits, is on track. The FCC has issued a notice announcing that 112 potential bidders submitted applications to participate in the upcoming auction. The auction is still scheduled to begin on July 23, 2015. If you are not on the list of 112 bidders, the auction train has already left the station, but you can watch auction developments on the FCC's auction website or by following us here at CommLawBlog.com
A total of 112 prospective bidders tossed in applications. Of those, 87 made the cut on their first try: the Commission has concluded that their applications were complete and acceptable, so they are assured of a bidding paddle and a seat in the bidders' section (assuming, of course, that they get the necessary upfront payment filed in time).
The other 25 applicants? As for 24 of them, the FCC sent letters asking for a bit more information about their applications. They have until June 29, 2015 to dot their "i"s, cross their "t"s and provide the FCC with whatever paperwork has asked for. As for the 25th applicant, there's bad news. It was totally rejected and won't be permitted to participate. How come? The applicant revealed that if it won, it was going to use the station for noncommercial educational purposes. While that's a laudable goal, it was also the kiss of death; the FCC kicks out NCE applicants that are in an auction with commercial bidders.
Any bidder - whether one of the 87 already-in-the-door or one of the 24 "incompletes" (but not the lone rejected applicant) - who wants to participate in the bidding is required to wire the upfront payment to the FCC within the next week by 6:00 p.m. Eastern time on Monday, June 29, 2015. Readers who plan to participate in the auction are advised to send your money to the FCC well before the deadline to avoid any unexpected delays. The FCC is not sympathetic to bidders who wait until the last day; historically, the FCC has disqualified some late-paying bidders who claimed that their lateness was the fault of their banks.
As is commonplace with auction notices, the FCC dedicates nearly three pages of its ten-page release to warnings about the anti-collusion rules. Cautionary anti-collusion note: Even if they opt not to participate further from this point on in the auction process, all 112 prospective bidders are prohibited from discussing the auction, the markets, the bids or the bidding strategies with other bidders in the same market until several weeks after the auction closes. The anti-collusion rules are very strict and the FCC enforces them rigorously. Cautionary example: Several years ago the FCC and the U.S. Department of Justice dragged a bidder through federal court in order to enforce penalties related to anti-collusion violations.
More than half of the 87 "complete" applicants are claiming new entrant bidding credits that would allow them to pay less than their bid amounts should they win. A new entrant with no interest in any other mass communication outlet is entitled to a 35% credit, which means they would pay only 65% of their winning bid. Bidders who own three or fewer mass communication interests are entitled to a 25% discount as long as there is no overlap between (a) any of their current interests and (b) a market on which they are bidding. As is typical in these types of auctions, more than two dozen bidders advised the FCC that they wanted to bid on all 131 markets. Selecting all markets does not necessarily indicate that the bidder will be active everywhere; rather, it may just reflect a preference to keep the maximum number of options open ... or it may indicate that the bidder simply pressed the "Select All" button by mistake when filling out the form.
After the FCC receives funds from potential bidders, it will release another list of those bidders who are going forward in the auction. The next list is expected in mid-July. Check back here for updates.