Fireside Wins Relief in Auction Penalty Case

Auction participant faced penalties that reached into six figures.
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Fireside Media owner Dave Garey is getting some money back from the Federal Communications Commission concerning high auction bids he made — and later withdrew — for construction permits. He’s also won dismissal of fines he hadn’t paid totaling more than $100,000.

The case is unusual because the commission doesn’t want auction participants to place a bid beyond their financial means and encourages bidders to make sure they have enough financial backing before taking part in a spectrum auction.

Fireside submitted high bids for CPs in Auction 37 in 2004, then withdrew all four due to financial hardship even while the auction was still going on. The bids were for Whitehall, Mont. (FM 185), Breckenridge, Texas (FM 277), Manville, Wyo. (FM 352), and Eureka, Mont. (FM 171).

The Eureka CP was re-auctioned in Auction 37. The Breckenridge and Manville CPs went to high bidders in Auction 62. The Whitehall CP was not won in Auction 62 and has not been re-offered at auction since.

Under the commission’s rules, a bidder who withdraws a provisionally winning bid during an auction must pay the difference between the amount of the withdrawn bid and the subsequent winning bid.

The FCC assessed withdrawal penalties of about $41,000 for Breckenridge and $67,000 for Manville, for a total amount of more than $108,000. The agency also kept Garey’s upfront payment of $17,300 for the Eureka CP.

Garey then said he couldn’t pay and submitted tax records for 2004 and 2005 showing he’d sustained business losses in those two years that exceeded his income. The commission said this week that because he’d proved his inability to pay, there is no new debt and since the case has been pending for several years, it decided to forgive the debt. It will also refund at least $8,600 or so of the $17,300 upfront money for the Eureka CP.

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