The Federal Communications Commission’s Media Bureau and the Office of Economics and Analytics have released more details about Auction 106. The upcoming sell-off will offer 130 construction permits in the FM broadcast service, including 34 that were available from previous auctions.
Bidding will begin April 28, the commission says. The auction will be conducted in “a simultaneous multiple round format,” meaning all CPs will be available for bidding in the first stage, and the FCC may or may not decide to transition to Stage Two based on bidding activity. A minimum of 80% of activity will be required in Stage One, and it will jump to 95% if the auction progresses to Stage Two.
In Auction 106, the commission will calculate an initial minimum acceptable bid, and once a provisional bid is placed for a CP, that amount will become the new minimum acceptable bid. Then, the FCC bidding system will determine the eight additional bid amounts by multiplying the minimum acceptable bid amount by the additional bid increment percentage of 5%.
In order to break any potential ties, the FCC says its system will assign a pseudo-random number to each bid submitted, and in case of a draw, the assigned numbers will break the tie by making the highest the winner the tiebreaker.
The simultaneous stopping rule will be in place during Auction 106; therefore all CPs will be available to bid on until the auction is complete. The Media Bureau listed five different ways that this rule could play out; they can be found on page 38.
[New FM Construction Permit Auction Set for April 2020]
The commission cautions that “Failure to maintain the requisite activity level will result in the use of an activity rule waiver, if any remain, or a reduction in the bidder’s eligibility.” Each bidder will begin the auction with three activity waivers. However, participants should be confident that they can actually pay for that CP. The FCC says it will not allow bid withdrawals in Auction 106.
Whether or not broadcasters plan to bid, all should be aware that the Media Bureau says it will not accept FM commercial and noncommercial educational minor change applications from Jan. 29 at noon through Feb. 11 at 6 p.m. (ET), which is the period when prospective bidders must file the Auction 106 Form 175. According to Media Bureau Chief Michelle Carey, the freeze will be enacted in order to “protect the reference coordinates of each of the allotments” to be sold in Auction 106.
Another important date to note is March 20, which is the deadline to wire the upfront payments required to participate in Auction 106. In this announcement, the FCC called attention to the fact that seven allotments will have reduced upfront payments of only $750. However, “An applicant that is a former defaulter … must pay an upfront payments 50% greater than that required” of other applicants; current defaulters may not participate.
The commission says it will notify qualified bidders of their status 10 days before the April 24 mock auction in order to prepare bidders for the real deal. For those who want even more information, an auction tutorial will be available online no later than Jan. 22.
Read the full document (DA 19-1256) and attachments to refresh your memory on auction procedures.
