Five years have passed since a Federal Communications Commission auction of 139 radio station construction permits. One Texas licensee who won an auction for three of those CPs told the FCC this summer they didn’t want the applications any longer.
As a result, the FCC has assessed an interim default payment of approximately $28,000 against Max Frequency LLC.
The Fairview, Texas-based licensee was the winning bidder in Auction 109 for three FM construction permits: a Class A facility on 102.7 FM in Milano, a Class C3 facility on 95.3 FM in Teague and a 97.3 FM Class A facility in Bogata. Max Frequency submitted long-form applications for all three authorizations by the 2021 post-auction deadline, which the Media Bureau accepted for filing. The licensee has no other FCC history.
This past August, Max Frequency requested the voluntary dismissal of the three pending applications. The Media Bureau granted the dismissals, triggering default provisions under commission rules.
Winning bidders who default after an auction are responsible for a deficiency payment and an additional penalty. The deficiency payment represents the difference between the defaulted net bid and the subsequent winning bid when the spectrum is re-auctioned. The additional payment equals 20% of the defaulter’s bid or the subsequent winning bid, whichever is less.
“Until new construction permits for the relevant allotments are won in a subsequent auction, the commission cannot determine the full amount of the default payment that is owed,” the FCC stated in its order.
As a result, the FCC assesses an interim default payment equal to 20% of the total net winning bids. For Max Frequency, whose bids for the three Texas CPs totaled $141,050, that interim obligation comes to $28,210.
The FCC will apply funds Max Frequency currently has on deposit with the commission toward the interim payment. A final default assessment will be issued once the Milano, Teague and Bogata CPs are sold in a future auction.
