PUBLIC NOTICE Federal Communications Commission 445 12th St., S.W. Washington, D.C. 20554 News Media Information 202 / 418-0500 Internet: http://www.fcc.gov TTY: 1-888-835-5322 DA 09-2063 September 18, 2009 Auction of FM Broadcast Construction Permits Closes Winning Bidders Announced for Auction 79 Down Payments Due October 2, 2009 Final Payments Due October 19, 2009 FCC Form 301 Due October 19, 2009 I. INTRODUCTION 1. On September 15, 2009, the Federal Communications Commission completed an auction of 122 FM broadcast construction permits, which was designated Auction 79. Auction 79 raised (in net bids) a total of $5,253,025 with 53 bidders winning a total of 85 construction permits. II. AUCTION RESULTS 2. This Public Notice provides detailed information concerning winning bidders, down payments, final payments and/or refunds, long-form application (FCC Form 301) filing requirements, and licensing matters. Key information appears in the following attachments: Attachment A: “Winning Bids” lists winning bidders and both their total gross and net winning bid amounts. Attachment B: “Bidder Payment/Refund” lists down payments and final payments owed by winning bidders and refunds due, if any.1 Attachment C: “Default Payment Report” contains a default payment based upon reconciliation of final results of Auction 62 and Auction 79. A copy of this Public Notice will be sent via overnight delivery to each qualified bidder. 1 The amounts listed in Attachment B are based on upfront payments and net winning bids. 2 III. POST-AUCTION PROCEDURES A. Down Payments 3. The Commission’s rules require that within ten business days after the release of this Public Notice, in this case by 6:00 p.m. Eastern Time (ET) on October 2, 2009, winning bidders in Auction 79 must have on deposit with the Commission enough funds to cover the down payments on winning bids.2 Specifically, each winning bidder’s total deposit must be twenty percent of the net amount of its winning bids. If a winning bidder’s upfront payment is not sufficient to meet this requirement, the winning bidder must deposit additional funds to meet its required down payment.3 4. The amount now due from each winning bidder, if any, is set out in the “Additional Amount Due after Upfront Payment Balance Applied Due by October 2, 2009” column of Attachment B. Note that a payment and FCC Remittance Advice Form (FCC Form 159) are necessary only if a winning bidder’s upfront payment does not cover the required total down payment (as reflected in Attachment B). B. Final Payments 5. Each winning bidder will be required to submit the balance of the net amount of its winning bids by 6:00 p.m. ET on October 19, 2009,4 as set out in the “Final Balance Due By October 19, 2009 or (Refund)” column of Attachment B. All winning bidders must pay the full amount of the Final Balance Due shown in Attachment B by 6:00 p.m. ET on October 19, 2009 (or by 6:00 p.m. ET on November 2, 2009, along with the five percent late fee required by Section 1.2109(a) of the Commission’s rules).5 Full and timely payment of winning bids and any applicable late fees must be made in accordance with Section 1.2109(a) of the Commission’s rules and must occur before action will be taken upon a winning bidder’s long-form applications (FCC Form 301).6 Specifically, construction permits will be granted only after the full and timely payment of winning bids and any applicable late fees, in accordance with Section 1.2109(a).7 C. Method of Payment for Down and Final Payments 6. All payments must be in U.S. dollars and made in the form of a wire transfer.8 No personal checks, credit card payments, automated clearing house (“ACH”), or other forms of payment will be accepted. All payments must be accompanied by a completed FCC Form 159.9 2 47 C.F.R. § 1.2107(b). 3 Id. 4 47 C.F.R. § 1.2109(a). 5 Id. 6 47 C.F.R. § 1.2109. A winning bidder that is found unqualified to be a Commission permitee will be deemed to have defaulted, its application will be dismissed, and it will be liable for the payment set forth in Section 1.2104(g)(2) of the Commission’s rules. See 47 C.F.R. §§ 1.2104(g), 1.2109(c). 7 47 C.F.R. § 1.2109(a). 8 The wire transfer must be initiated by the winning bidder through its bank, authorizing the bank to wire funds from the bidder’s account to the Commission’s account, which will receive payments for financial obligations resulting from Auction 79. Additional information on wire transfers is available on the Commission’s web site at http://www.fcc.gov/fees/wiretran.html. 9 Copies of the FCC Form 159 may be obtained by calling the Commission’s Forms Distribution Center at (800) 418-3676 (outside Washington, DC) or (202) 418-3676. Copies of the FCC Form 159 can also be obtained via the 3 7. Questions concerning the calculation and submission of down and final payments, the FCC Form 159, and refunds should be directed to Gail Glasser at (202) 418-0578. 8. To submit funds by wire transfer, winning bidders will need the following information: ABA Routing Number: 021030004 Receiving Bank: TREAS NYC 33 Liberty Street New York, NY 10045 ACCOUNT NAME: FCC ACCOUNT NUMBER: 27000001 OBI Field: (Skip one space between each information item) “AUCTIONPAY” APPLICANT FRN: (same as FCC Form 159, block 21) PAYMENT TYPE CODE: (same as FCC Form 159, block 24A: “A79D”) FCC CODE 1: (same as FCC Form 159, Block 28A: “79”) PAYER NAME: (same as FCC Form 159, Block 2) LOCKBOX NO.: #979085 1. Down Payment 9. If applicable, a partially completed copy of the FCC Form 159 will be sent to winning bidders to facilitate submission of the correct down payment. Please note, however, that a winning bidder is responsible for ensuring timely submission of the correct down payment, for timely filing of an accurate and complete FCC Form 159, and for obtaining confirmation from its financial institution that the Commission has timely received the down payment and deposited it into the proper account. 10. Wire transfers for down payments must be received by the Commission by 6:00 p.m. ET on October 2, 2009. A winning bidder should coordinate with its financial institution ahead of time regarding its wire transfer and allow sufficient time for the wire transfer to be initiated and completed prior to the deadline. 11. At least one hour before placing the order for the wire transfer (but on the same business day), winning bidders must fax the completed FCC Form 159 to U.S. Bank in St. Louis, Missouri, at (314) 418-4232. Proper completion of the FCC Form 159 is critical to ensuring correct credit of bidder deposits. A winning bidder must use the same FCC Registration Number (FRN) used on its short-form application (FCC Form 175). 12. Failure to complete this down payment process by 6:00 p.m. ET on October 2, 2009, will result in default.10 2. Final Payment 13. If applicable, a partially completed copy of the FCC Form 159 will be sent to winning bidders to facilitate submission of the correct final payment. Please note, however, that a winning bidder Internet (http://www.fcc.gov/formpage.html) or by calling from the handset of a fax machine the Commission’s Fax Information System at (202) 418-0177. 10 See Section III. D., “Default and Disqualification Payment,” below. 4 is responsible for ensuring timely submission of the correct final payment, for timely filing of an accurate and complete FCC Form 159, and for obtaining confirmation from its financial institution that the Commission has timely received the final payment and deposited it into the proper account. 14. Wire transfers of final payments must be received by the Commission by 6:00 p.m. ET on October 19, 2009 (or by 6:00 p.m. ET on November 2, 2009, along with the five percent late fee required by Section 1.2109(a) of the Commission’s rules).11 A winning bidder should coordinate with its financial institution ahead of time regarding its wire transfer and allow sufficient time for the wire transfer to be initiated and completed prior to the deadline. 15. Payments must be preceded by the completed FCC Remittance Advice Form (FCC Form 159). The winning bidder must fax, at least one hour prior to placing the order for the wire transfer, but on the same business day that it pays the balance due to the Commission, a completed FCC Form 159 to U.S. Bank in St. Louis, Missouri, at (314) 418-4232. On the FCC Form 159, the applicant must use the same FRN used on its short-form application (FCC Form 175). 16. Failure to complete the final payment by 6:00 p.m. ET on October 19, 2009; or by 6:00 p.m. ET on November 2, 2009, along with the five percent late fee, will result in default.12 D. Default and Disqualification Payments 17. The Commission imposes payment obligations on bidders that default on payments due after an auction closes and on those that are disqualified.13 1. Default Payment from Previous Auction 18. Because Auction 79 is now closed, the Commission is in a position to calculate a final default payment owed as a result of the default on a construction permit in Auction 62. This payment is identified in Attachment C. Forthcoming orders will assess such payments, and will specify due dates for the payment of any such obligations. 2. Bid Default/Disqualification Payments from Auction 79 19. If a winning bidder defaults or is disqualified after the close of the auction (i.e., fails to remit the required down payment within the prescribed period of time, fails to submit a timely long-form application, fails to make full payment, or is otherwise disqualified), the defaulting bidder will be subject to the payment obligations described in Section 1.2104(g)(2).14 These payment obligations include both a deficiency payment, equal to the difference between the amount of the bidder’s bid and the amount of the winning bid the next time a permit or license covering the same spectrum is won in an auction, plus an additional payment equal to a percent of the defaulter’s bid or the subsequent winning bid, whichever 11 47 C.F.R. § 1.2109(a). 12 Section III.D., “Default and Disqualification Payment,” below. 13 See 47 C.F.R. §§ 1.2104(g), 1.2109. 14 47 C.F.R. § 1.2104(g)(2). 5 is less.15 The additional default payment for Auction 79 permits was set at twenty percent of the applicable bid.16 20. If a winning bidder fails to remit the required down payment within ten business days after the Commission has released this Public Notice, in this case by October 2, 2009, the bidder will be deemed to have defaulted, its long-form application will be dismissed, and it will be liable for a default payment as described above.17 21. If a winning bidder fails to pay the balance of its winning bid in a lump sum by the applicable deadline as specified by the Commission, it will be allowed to make a late payment within ten business days after the payment deadline, provided that it also pays a late fee equal to five percent of the amount due.18 If a winning bidder fails to pay (a) the balance of its winning bid by the payment deadline on October 19, 2009, or (b) the balance of its winning bid plus the late fee by the late payment deadline, on November 2, 2009, it will be deemed to have defaulted, and it will be subject to applicable default payments.19 22. Construction permits will be awarded upon completion of the review of each applicant’s long-form application and a determination that the applicant’s long-form application meets Commission requirements for grant, but only after the full and timely payment of winning bids and any applicable late fees.20 If a winning bidder defaults on any of its required payments or is disqualified for any reason after having made the required payments, it will be deemed to have defaulted, its application will be dismissed, and it will be liable for the payment set forth in Section 1.2104(g)(2).21 23. Additionally, a bidder that is found to have violated the antitrust laws or the Commission’s rules in connection with its participation in the competitive bidding process may be subject, in addition to any other applicable sanctions, to forfeiture of its upfront payment, down payment, or full bid amount, and may be prohibited from participating in future auctions.22 E. Refund of Excess Payments 24. Upfront monies on deposit that are in excess of an applicant’s Auction 79 obligations may be refunded to the payer of record as identified on the FCC Form 159. To be eligible to receive a refund, an applicant must submit a refund request and provide wire transfer instructions. Applicants can provide this information by using the Commission’s Integrated Spectrum Auction System (“ISAS”) and clicking on the “See Wire Transfer for Refund Purposes” link under the Post-Auction section of the My Auctions web page by October 2, 2009. After this date, applicants must send a request for refund along with the 15 Id. See also Auction of FM Broadcast Construction Permits Scheduled for September 1, 2009; Notice and Filing Requirements, Minimum Opening Bids, Upfront Payments and Other Procedures for Auction 79, DA 09-810, Public Notice, 24 FCC Rcd 4448, 4488-89 ¶¶ 166-69 (2009) (“Auction 79 Procedures Public Notice”). 16 Id. 17 47 C.F.R. §§ 1.2104(g)(2), 1.2109(b). 18 47 C.F.R. §§ 1.2109(a), 73.5003. 19 47 C.F.R. §§ 1.2104(g)(2), 1.2109(a), 1.2109(c). 20 47 C.F.R. §§ 1.2109(a), 73.5003. 21 47 C.F.R. §§ 1.2104(g)(2), 1.2109. 22 47 C.F.R. § 1.2109(d). 6 necessary wire transfer instructions and FRN by fax to Gail Glasser of the Office of the Managing Director at (202) 418-2843. Any questions concerning refunds should be referred to Gail Glasser at (202) 418-0578. F. FCC Form 301 25. Prior to midnight ET on October 19, 2009, winning bidders must submit electronically a properly completed long-form application (FCC Form 301, Application for Construction Permit for Commercial Broadcast Station), including required exhibits, for each FM broadcast construction permit for which they were the winning bidder in Auction 79.23 An applicant that fails to submit the required long-form application before the specified deadline and fails to establish good cause for any late-filed submission shall be deemed to have defaulted and shall be subject to the payments set forth in Section 1.2104(g) of the Commission’s rules.24 26. Applicants must file accurate and complete long-form applications (FCC Form 301) electronically through the Media Bureau’s Consolidated Database System (CDBS) online electronic filing system.25 In accordance with the Commission’s rules, electronic filing of FCC Form 301 must be accompanied by the appropriate application filing fee,26 and information submitted on the new FCC Form 301 application by winning bidders must not constitute a major change from any information specified in the winning bidder's previously filed short-form application (FCC Form 175).27 Instructions for use of the Media Bureau's electronic filing system are available in the CDBS User’s Guide, which can be accessed from the electronic filing web site at http://www.fcc.gov/mb/cdbs.html. 27. The Guide can be accessed by clicking on the CDBS link at the electronic filing web site, above. This action will take the user to the Media Bureau’s CDBS Electronic Filing System site. The user should then click on the “Go to CDBS User’s Guide” link. Internet access to the CDBS online electronic forms filing system requires, at a minimum, a browser such as Netscape version 3.04 or Internet Explorer version 3.51, or later. When filing FCC Form 301, applicants must select “Long Form Application for FM Auction 79” on the Pre-form and enter the relevant short form application file number from CDBS (Question 2).28 For assistance with electronic filing, call the Audio Division Help Desk at (202) 418-2662. 23 See 47 C.F.R. § 73.5005(a). 24 See 47 C.F.R. §§ 1.2104(g), 1.2107(c), 73.5005(c). 25 For information regarding electronic application filing, refer to “Mass Media Bureau Implements Mandatory Electronic Filing of FCC Forms 301, 314, and 315,” Public Notice, 16 FCC Rcd 3989 (MMB 2001). 26 See Implementation of Section 309(j) of the Communications Act – Competitive Bidding for Commercial Broadcast and Instructional Television Fixed Service Licenses, MM Docket No. 97-234, First Report and Order, 13 FCC Rcd 15920, 15984 ¶ 164 (1998). 27 See 47 C.F.R. §§ 73.3522, 73.3573. 28 To obtain the short form application file number, go to CDBS Public Access (http://svartifoss2.fcc.gov/prod/cdbs/pubacc/prod/cdbs_pa.htm) and select “Search for Application Information.” In the Application Search page, in “File Number,” enter “200906%” in the second box (leave the first box blank). In “Form” select “Short Form” from the pull-down menu. Enter the appropriate “Community of License City” and “State.” Finally, in “Application Status” select “CP Requested” from the pull-down menu. Then, click on “Submit Application Search” at the bottom of the page. This will provide all of the Short Forms for that community of license. In the few instances with multiple allotments in the same community, an applicant can click on the “Info” hyperlinks in the results page to determine which Short Form is applicable to which applicant. 7 28. The Commission staff will return applications not submitted in accordance with the procedures described in this Public Notice. Applicants are encouraged to pay the FCC Form 301 application filing fee electronically using the CDBS filing system in order to avoid processing delays. G. Additional Post-Auction Filing Requirements 29. Section 73.5005(a) of the Commission’s rules29 requires that post-auction long-form applications include the exhibits mandated by Section 1.2107(d) (providing a detailed explanation of the terms, conditions, and parties involved in any bidding consortium, joint venture, partnership, or other agreement or arrangement the applicant had entered into relating to the competitive bidding process);30 Section 1.2110(j) (requiring an applicant claiming bidding credit eligibility to describe how it satisfies the eligibility requirements for such bidding credit, and to list and summarize all agreements that affect such status, such as partnership agreements, shareholder agreements, management agreements, and any other agreements, including oral agreements, that establish that the auction applicant will have both de facto and de jure control of the entity);31 and Section 1.2112(a) (requiring that each long-form application fully disclose ownership information and the real party or parties in interest in the applicant or application).32 30. An applicant seeking to qualify for a new entrant bidding credit under the “eligible entity” provisions of Section 73.3555 must also provide information establishing its status in its long-form application.33 The Commission generally attributes the media interests held by substantial investors in, or creditors of, an applicant claiming new entrant status.34 Specifically, the attributable mass media interests held by an individual or entity with an equity and/or debt interest in an applicant are attributed to that bidder for purposes of determining its eligibility for the new entrant bidding credit, if the equity and debt interests, in the aggregate, exceed 33 percent of the total asset value of the applicant, even if such an interest is non-voting.35 31. In the Diversity Order, the Commission relaxed the equity/debt plus attribution standard, to allow for higher investment opportunities in an entity meeting the definition of an “eligible entity.”36 “Eligible entity” is defined in Section 73.3555, Note 2(i) of the Rules.37 Pursuant to the Diversity Order, 29 47 C.F.R. § 73.5005(a). See also Instructions for Form 301, Application for Construction Permit for Commercial Broadcast Station, Instructions for Section II: Legal Information, paragraph G: Item 10: Auction Authorization for auction-related exhibit filing requirements. 30 47 C.F.R. § 1.2107(d). 31 47 C.F.R. § 1.2110(j). 32 47 C.F.R. § 1.2112(a). 33 47 C.F.R. § 73.3555, Note 2(i). See also Auction 79 Procedures Public Notice, 24 FCC Rcd at 4464-65 ¶ 50-52 (overview of eligible entity standard for purposes of new entrant bidding credit). 34 47 C.F.R. § 73.5008(c) (attribution of mass media interests). 35 Id. 36 Promoting Diversification of Ownership in the Broadcasting Services, Report and Order and Third Further Notice of Proposed Rulemaking, FCC 07-217, 23 FCC Rcd 5922 (2008) (“Diversity Order”). 37 47 C.F.R. § 73.3555, Note 2(i). An “eligible entity” shall include any entity that qualifies as a small business under the Small Business Administration’s size standards for its industry grouping, as set forth in 13 C.F.R. § 121.201, and holds (i) 30 percent or more of the stock or partnership interests and more than 50 percent of the voting power of the corporation or partnership that will own the media outlet; or (ii) 15 percent or more of the stock or 8 the Commission will now allow the holder of an equity or debt interest in the applicant to exceed the above-noted 33 percent threshold without triggering attribution provided: (1) the combined equity and debt in the eligible entity is less than 50 percent; or (2) the total debt in the eligible entity does not exceed 80 percent of the asset value, and the interest holder does not hold any equity interest, option, or promise to acquire an equity interest in the eligible entity or any related entity.38 32. An applicant claiming status as an eligible entity as its basis for its bidding credit eligibility should establish its status as part of its response to the multiple ownership question on the Form 301.39 33. Applicants also are reminded that the Commission’s “red light rule” implementing the Debt Collection Improvement Act will be enforced.40 Under the red light rule, the Commission will not process applications or other requests for benefits filed by parties that have outstanding debts owed to the Commission.41 H. Maintaining Accuracy of Information 34. After the auction closes, all required changes to an applicant’s information must be made by filing or amending the applicant’s FCC Form 301 application.42 With the release of this Public Notice, applicants are no longer required to maintain the accuracy and completeness of information furnished on their short-form applications and exhibits. I. Application Processing and Construction Permit Grant 35. After its initial review of the long-form applications, the Media Bureau will issue a public notice listing the applications that are acceptable for filing. Pursuant to Section 1.2108(b) and 73.5006,43 of the Commission’s rules, interested parties will have ten days from release of that public notice to file petitions to deny any of these applications.44 The Media Bureau will use public notices generated by CDBS to start the ten-day period for filing petitions to deny. The public notice entitled “Broadcast Applications” will list such applications as “Accepted for Filing.” An applicant may file an opposition to any petition to deny within five days of the filing deadline for petitions to deny.45 Replies must be filed within five days of the filing deadline for oppositions.46 The Commission reminds all parties and their counsel that the Commission intends to use its authority fully to deter the filing of frivolous pleadings.47 partnership interests and more than 50 percent of the voting power of the corporation or partnership that will own the media outlet, provided that no other person or entity owns or controls more than 25 percent of the outstanding stock or partnership interests; or (iii) more than 50 percent of the voting power of the corporation that will own the media outlet if such corporation is a publicly traded company. 38 See 47 C.F.R. § 73.5008 (c). 39 See FCC Form 301 - Section II-Legal, Item 4 (d) for “eligible entity” exhibit requirements. 40 47 C.F.R. § 1.1910. 41 Id.; see also 47 C.F.R. § 1.2109(c) (post-auction defaults). 42 See 47 C.F.R. § 1.65. 43 47 C.F.R. §§ 1.2108(b), 73.5006. 44 47 C.F.R. § 73.5006. 45 47 C.F.R. § 73.5006(c). 46 Id. 47 See “Commission Taking Tough Measures Against Frivolous Pleadings,” Public Notice, 11 FCC Rcd 3030 (1996). 9 36. After the long-form review process, if the Commission determines that an applicant is otherwise qualified, that there are no substantial and material issues of fact, and that no additional payments are due, the Commission will grant the construction permit.48 IV. OTHER IMPORTANT INFORMATION A. Maintaining Prohibition on Certain Communications 37. To ensure the competitiveness of the auction process, the Commission’s rules prohibit competing applicants from communicating with each other about bids, bidding strategies, or settlements, unless such applicants have identified each other on their short-form applications as parties with whom they have entered into agreements under Section 1.2105(a)(2)(viii).49 As explained more fully in the Auction 79 Qualified Bidders Public Notice, this prohibition began at the short-form application filing deadline of June 25, 2009, at 6:00 p.m. ET and continues until the down payment deadline, which is 6:00 p.m. ET on October 2, 2009.50 38. The prohibition on certain communications applies to all applicants in Auction 79 (unless they have identified each other on their short-form applications as parties with whom they have entered into agreements under Section 1.2105(a)(2)(viii)), regardless of whether an applicant became a qualified bidder or actually participated in the bidding, and the prohibition continues for all applicants until the down payment deadline regardless of whether a winning bidder needs to make an additional payment by the down payment deadline.51 Each applicant in this auction certified its compliance with 47 C.F.R. § 1.2105(c) when its short-form application was filed. B. Return of SecurID® Tokens 39. The SecurID® tokens distributed to qualified bidders are tailored to this auction and will not work for future auctions. Bidders should return their SecurID® tokens to the Commission for recycling. The Commission will send bidders, along with the copy of this Public Notice, a pre-addressed, stamped envelope to return the SecurID® tokens. Bidders should return the tokens by October 2, 2009. C. Contact Information 40. For further information, contact: 48 See 47 C.F.R. §§ 1.2108(d), 1.2109(a). 49 47 C.F.R. §§ 1.2105(a)(2)(viii), 1.2105(c)(1). See also Amendment of Part 1 of the Commission's Rules – Competitive Bidding Procedures, WT Docket No. 97-82, Seventh Report and Order, 16 FCC Rcd 17,546 (2001); Order on Reconsideration of the Third Report and Order, Fifth Report and Order, and Fourth Further Notice of Proposed Rule Making, 15 FCC Rcd 15,293, 15,297-98 ¶¶ 7-8 (2000). 50 See Auction of FM Broadcast Construction Permits, 77 Bidders Qualified to Participate in Auction 79, Public Notice, DA 09-1818 (MB/WTB Aug. 9, 2009). See also Auction 79 Procedures Public Notice, 24 FCC Rcd at 4452-57 ¶¶ 7-20. 51 Id. 10 News Media Wireless Telecommunications Bureau Matt Nodine at (202) 418-1646 Media Bureau Janice Wise at (202) 418-8165 Licensing Information Service Rules, Policies, Regulations Licensing Issues, Engineering Issues Due Diligence, Incumbency Issues, FCC Form 301 questions Media Bureau, Audio Division Lisa Scanlan, Assistant Chief or Thomas Nessinger, Attorney Advisor, at (202) 418-2700 Auction Payment Information Wire Transfers Refunds FCC Auctions Accounting Branch Gail Glasser at (202) 418-0578, or (202) 418-2843 (fax) Auction 79 Information General Auction Information, Process, and Procedures Auction Rules, Policies, and Regulations Auctions and Spectrum Access Division Linda Sanderson, Project Manager, or Debbie Smith, Auction Analyst, at (717) 338-2868 or (202) 418-0660 Howard Davenport, Attorney, at (202) 418-0660 Accessible Formats Braille, large print, electronic files, or audio format for people with disabilities Consumer and Governmental Affairs Bureau (202) 418-0530, or (202) 418-0432 (TTY) fcc504@fcc.gov FCC Internet Sites http://www.fcc.gov http://wireless.fcc.gov/auctions http://www.fcc.gov/mb/cdbs.html - FCC -