FM Broadcast Filing Window - Commercial Auction 106
FCC Auction # 106.
Short form applications (Form 175) must be filed between January 29, 2020 (12 noon ET) and February 11, 2020 (6PM ET).
This window is making available 130 allotments for new FM stations in various portions of the country. Only those specified communities are available.
Applicant requirements and limitations:
Any entity (including individuals) may participate in this auction window.
Non-commercial educational (NCE) organizations can participate in one of two ways:
If they claim to be NCE during the Form 175 window process and they are the only applicant that files the short-form during the window, then they will be able to file a long form application to obtain the construction permit.
If they do not specify themselves as NCE during the Form 175 window process, they can still participate but they will have to make the up front payment, which is the opening bid price for the specific allotment they are looking for. If they are the only party that files a Form 175 in that auction, they will only have to bid once during the auction and they will win. If multiple applicants file Form 175s for that allotment, then they will compete in the auction. NCE organizations that win an auction will still pay for the auction price for the channel but will not be required to pay any filing fees for the long form application and subsequent applications.
If there is a mix of “commercial” and “non commercial” Form 175s filed for a particular allotment, the non-commercial Form 175s will be automatically dismissed and will not be able to continue with the auction.
Once the window closes on February 11, you can’t change your designation from non-commercial to commercial.
Applicants wanting to operate a commercial station will indicate “commercial” on the Form 175 and will participate in the auction and if successful, will pay filing fees for the long form and subsequent applications.
Applicants may apply for as many allotments as they want but if applying as “commercial”, they will have to make an up front payment for each allotment. After the auction is over, if the bidder was unsuccessful or if successful in some allotments and not others, they may request a refund of the remaining balance from the FCC.
Current LPFM licensees:
FCC rules do not allow cross-ownership of any party (board member) to an LPFM facility to also be a party to a full-power FM broadcast station. Any conflict will need to be disclosed on the long form application and include a pledge to divest the LPFM station. This can be done by filing a transfer of control to remove the conflicting board member, assigning the LPFM license to another organization and consummating that assignment or the LPFM license can be surrendered.
Service technical details:
Participants successful in the auction must apply for the channel and class specified in the auction notice.
Site assurance policies do not apply to commercial applications but may apply to NCE applicants who specified NCE on Form 175 and was the only applicant.
Directional antennas may be utilized however they must meet the minimum requirement of (1) not having a difference of 2 dB per 10 degrees and in no case shall the antenna radiate at 15 dB under the highest power on the antenna. This means that many directional antennas commonly used by FM translators can’t be used by full-service FM stations. Directional antenna installations must be verified by a proof of performance from the manufacturer and a verification statement from a licensed surveyor that the antenna was constructed per the FCC authorization. Directional antennas in the commercial FM band are used in certain short-spacing situations as outlined in Section 73.215 of the FCC Rules. Antennas with only vertical polarization may not be used.
Community coverage requirements:
The site chosen must be capable of putting a 70 dBu “city grade” contour over the entire community of license.
Competing applications (MX):
Mutual exclusive applications are handled through auction. Bidding is done through multiple “rounds”, likely as many as three times per day. The FCC is still working on the ground rules for this auction. Bidding will begin on April 28, 2020.
Nature of broadcast service
This is an auction for commercial allotments. As long as NCE was not specified on the short-form process, these stations can be used for commercial stations and are subject to filing and annual regulatory fees.
Parties to the application
Parties to the application (board members, owners, partners, major stockholders, etc.) should be vetted for various character issues such as past felony convictions as well as past cases of providing false information to the government. Normally, up to 20% of the board members may be non-US citizens (remember: green cards and TPS are not considered being a citizen, even if they are a legal resident). There is an extensive process for organizations with more than 20% foreign citizens on their board. Board members must also not be on a denial of federal benefits under the U.S. Anti-Drug Act (the same law that denies student loans).
Responsibilities of licensee
Once a facility is completely constructed, the application for license is filed. Once granted, the facility is fully licensed. Broadcast licenses are issued for 8-year terms however the original license will be issued for the period of time from when the license is granted until the date when all radio broadcast licenses for that state expire. The renewal process is fairly easy.
Full-service licensees are also required to maintain an online public inspection file and must add information once every quarter to outline the various local issues that were addressed by the station. Once every two years and following certain triggering events, NCE licensees must file an ownership report that outlines the current make-up of the board of directors. Any board changes (including gradual) that exceed 50% from the original application must be first approved by the FCC in a transfer of control process. This process will need to be repeated whenever the 50% or more of the board members change again.
Full service FM licensees are not required to have a physical main studio that is accessible to the public but must maintain a local or toll free telephone number which can be accessed by the general public during normal business hours.
Applicants whose applications have been “accepted for filing” by the FCC will be required to place a public notice. As of the time of the writing of this fact sheet (January 12, 2020), the FCC still requires these public notices to be published in the newspaper that serves the community being applied for. There is a pending rulemaking that may replace the newspaper requirement with online posting on a known local website, state broadcaster association or as proposed by REC, a website dedicated to broadcast public notices.
Building and operating a radio station is not cheap. In the FM broadcast service, you can use newer or older transmitting equipment. Older transmitters may not have the failsafe modes in them to detect out-of-tolerance situations and immediately take action. They will require more TLC by a qualified engineer who can watch over the operation. Using older transmitters out of tolerance can lead to notices of violation and possible fines. Depending on your station’s output power, expect to spend from $3000 to over $30,000 for a transmitter. Your antenna size and cost will also depend on how much power you are running. Simple non-directional antennas at lower power (250 watts or less) may cost around $700 to start. Higher power may mean more “bays” and that will lead to higher costs. Directional antennas, especially those with a custom design can get very expensive. Expect to pay into the 5 figures.
All broadcast stations are required to be equipped with an emergency alert system (EAS) encoder/decoder. Expect to pay at least $3,500 for this piece of equipment. In addition, software updates that keep up with changes made by the federal government may lead to additional charges once every few years.
Broadcast stations that carry copyrighted music over the air must pay annual royalty fees to up to three performing rights organizations (ASCAP, BMI and SESAC). Their rates are set by a federal copyright royalty board. Rates vary based on whether the station is music centric (more than 20% music) or talk centric (more than 20% talk). REC does not have the rates for commercial stations. Royalty rates increase every year.
When determining the costs of running a radio station, you also need to take into consideration the day to day costs including power, other infrastructure as well as any applicable property taxes and upkeep on the equipment.
For noncommercial educational broadcast applicants and licensees, the FCC (federal government) does not charge any application or regulatory fees. For commercial stations, application and regulatory fees will apply.
For filing assistance, REC does charge for services based on a “level of effort” from each situation. For full-service stations in the auction, you may be looking at professional fees from about $2,000~$5,000 based on exactly what needs to be done. Most situations will come in on the lower end of that range. REC’s full service offering will include the filing of the short form 175, original long-form application, the post-construction application to obtain the full license and the first post-license ownership report. Additional fees may be charged if the applicant makes a change after significant work is performed. REC bills in advance before work is done. REC can be paid securely online using a major credit or debit card. Payment by check is also permitted but must clear prior to the filing window. For public sector and educational institutions, Michelle Bradley of REC can provide a W-9.
REC can provide very basic “preliminary checks” for “yes/no” answers on potential availability prior to payment. It is REC’s policy to not collect unless we are sure the request can be done. To keep our prices low, REC has a no-refund policy.
There is no retainer or other fee to start your relationship with REC Networks for this window. Please contact REC by e-mail at firstname.lastname@example.org or call 202 621-2355.
We look forward to working with you. We hope to hear you on the air real soon!