1-4-2012
I note that the FCC is now accepting applications for new FM stations in mostly rural areas, including an opportunity for an FM station in the town I grew up in, for an auction to be held later this Spring. What is this all about? We took that question to John Garziglia and asked him to give us the details.
John Garziglia says: The FCC periodically auctions off construction permits for new FM stations at locations where the FCC has previously allotted an FM channel. The FCC on January 3rd started accepting Form 175 auction applications for 119 FM channels upon which new commercial FM stations may be built and operated. The deadline for filing its Form 175 auction application is January 12, 2012.
The FCC?s listing of FM channels to be auctioned is at: http://transition.fcc.gov/Daily_Releases/Daily_Business/2011/db1221/DA-11-2046A2.pdf What the FCC is auctioning is the opportunity to file for an FM construction permit for the allotment. There is no assurance of actually being able to build a station at the auctioned allotment. Therefore, having good engineering and legal assistance prior to actually bidding is a must.
Filing a Form 175 application to participate in the auction for one of these FM channels entails almost no risk. The risk comes when actual money is bid at the auction to be held in March. Therefore, if you have an interest in one or more of the FM channels on the FCC?s listing, it would be advisable to file the Form 175 application now, and assess later whether and how much you might bid.
Once the Form 175 application is filed, the FCC, between now and the start of the auction, will specify a date by which upfront money specified on the auction listing must be submitted. That upfront money will be refunded by the FCC shortly after the auction if you do not bid, or if you are not the successful bidder. The actual monetary risk comes once the auction starts and bidding commences. FCC information on this FM auction is at: www.fcc.gov/auctions.
It is impossible to speculate what are the chances that any one of these FM stations will actually be a reasonable business proposition. Like most business start- ups, success will inure to the person who sees an opportunity that others did not see, and is able to develop the opportunity into a viable business.
If there is a channel in your home town and you know something about the growth or strength of the area that others may not, or you and your engineer believe that the new station could be built in such a way that is not readily apparent to others, that FM channel may be an opportunity for you. Also, for new broadcasters, the FCC gives a 33% bidding credit to encourage new entrants, as well as a lesser 25% credit to bidders with up to three stations not in the same area.
There are many small towns that no one has heard of in this auction. If you know something about a particular community which will get a new FM station, and you know how to make a station work there better than others might, there may be an opportunity for you in this upcoming FCC FM auction. The first step is to file an FCC Form 175 prior to the January 12, 2012 deadline.
John F. Garziglia is a Communications Law Attorney with Womble Carlyle Sandridge & Rice in Washington, DC and can be reached at (202) 857-4455 or jgarziglia@wcsr.com. Have a question for our "Ask The Attorney" feature? Send to edryan@radioink.com.
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