FM Commercial Short Form Filing Window - Auction 109

Filing wIndow:
Short forms to participate in Auction 109.  

Window dates:
Short forms (Form 175) will be filed between April 28, 2021 ~ May 11, 2021. 

Potential availability:
This window is for specific FM and AM allotments.  No other locations can be added.  A list of allotments can be found in Attachment A of the FCC Public Notice.

Basic details:
This window is for Form 175 short forms to be filed in order to express an interest to participate in the auction.  Applicants must specify which of the allotments they plan to bid on.

Applicant requirements and limitations:
This window is open to all applicants including organizations, for-profit corporations and individuals, .Noncommercial educational applicants can paricipate in this auction as either a commercial or noncommercial applicant.  If they file as noncommercial and the same allotment gets one or more commercial Form 175s filed on it, the noncommercial application will be dismissed.  Noncommercial applicants can specify their Form 175 as commercial if they want to participate in the auction and bid on the allotment.  If a nonprofit organization wins a commercial auction and pays the auction funds, the long form construction permit can be filed without any FCC fees and the status of the facility can be changed to noncommercial.

Successful applicants filing either their short form or long form as noncommercial educational (NCE) must meet the following requirements: Any non-profit organization that is recognized by any state as a not for profit corporation.  Organizations are not required to be an IRS 501(c) status.  The corporate status must be valid on the date of filing and must remain valid.  It is important to assure that the organization maintains their state annual report filings to avoid a lapse.  New organizations must have their corporation documents stamped by the state on a date prior to the date of filing (even if that date is in the middle of the window period). 

Commercial and noncommercial applicants will need to obtain a FCC Registration Number (FRN) if they don't have one already.  The FRN must be in the name of the entity that is applying.  These can be applied for online and must represent the organization.  If your organization or company has an EIN issued by the IRS, please have that ready.  Individuals will need to use their social security number when signing up for an FRN.

Current LPFM licensees:
LPFM station licensees can participate in the auction as either a noncommercial or commercial applicant, subject to the same caveats above.  LPFM applicants must disclose on their long form applications that they are currently the licensee of an LPFM station and that they pledge to divest their LPFM station (by assigning the license to another nonprofit organization or surrendering the LPFM license to the FCC) prior to the full-power FM station going on the air.

Service technical details:
Once the applicant wins the auction, they can specify a transmitter site.  Even if the station is licensed to a noncommercial organization, the commercial FM rules apply to the location of the station.  The facility proposed must meet distance separation requirements and place a 70 dBu F(50, 50) contour over a significant portion fo the designated community of license.  Applicants may change the class of service as long as the minimum and maximum faciity requirements are met and as long as the 70 dBu community coverage is met.  For the community of license to be changed, it is a very complex process.

Full service FM stations protect other FM stations using distane separation on co-, first-, second- and third-adjacent channels as well as intermediate frequency (+ 10.6 and 10.8 MHz). 

Full service FM stations located near the international border must provide protection to foreign stations in accordance with the appropriate international agreements.

Full service FM stations are not required to protect existing LPFM stations and FM translator stations.  Full service FM is a primary service and therefore has the rights to displace LPFM and translator stations. 

Site assurance:
Unlike noncommercial services, there is no site assurance requirement in the commercial service.

Directional antennas:
FM stations on commercial allotments that are short-spaced to other domestic commercial stations but meet a specific shorter distance may request to use a directional antenna and handling under §73.215 of the rules.  

Directional antennas 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.

Community coverage requirements:
The proposed facility must place significant coverage (80% of the population) of the corporate limits of the community of license.  The 70 dBu F(50, 50) contour is used to determine community coverage.

Competing applications (MX):
Since this is an auction window, "MX" would be based on how many applicants file Form 175 for that allotment during the short-form window. 

If only one commercial applicant files for that allotment, then they will have to participate in the auction and make one bid (the opening price) and that's it.  Keep in mind, applicants who participate in the auction will need to make an up front payment that is the same as the opening bid.  Bidding credits may be available to some applicants.

If only one noncommercial applicant files for that allotment and no commercial applicants file, then the noncommercial applicant will be awarded the construction permit.

If more than one noncommercial applicant files for the allotment and there is no commercial applicants, there will be a point system process.  This is an extremely rare scenario.

Nature of broadcast service

If the FM station is licensed as a commercial station, then there are no restrictions as commercials would be permitted.  Applicants and licensees would pay filing fees and annual regulatory fees.

If the FM station is licensed as a noncommercial educational station (NCE), commercials are prohibited.  With that, applicants and licensees will not pay filing fees or annual regulatory fees (but will still have to pay the auction fees if the applicant specified "commercial" on the Form 175 to participate in the auction). NCE stations may acknowledge “underwriters”, those who give money to the station.  Underwriting acknowledgements can include identifying information such as name, address, phone number, website and even a brief description of the business.  The announcements may not “promote” the business or a certain aspect of the business.  There are strict controls on the language that can be used on the air to make these acknowledgements.  These messages should be made with a station’s voice and not the voice of the underwriter.  VIOLATIONS OF THE RULES REGARDING COMMERCIALS ON NCE STATIONS CAN LEAD TO FINES IN THE TENS-OF-THOUSANDS. 

Educational Statement
ONLY if the station is licensed as a noncommercial facility, stations are only licensed to educational organizations to advance an educational purpose, new licensees must demonstrate that they are truly educational organizations.  This does not mean that the organization must have classrooms.  Applicants need to provide descriptions of the nature of its proposed station programming, and if possible, program schedules.  The LPFM applicant should also demonstrate how the proposed station programming will be used to advance its educational purpose.

Parties to the application
Commercial applicants who are individuals, that individual is the only party to the application.  For general partnerships, all partners are parties to the application.  For non-stock corporations, the parties to the application will be the officers and directors.  For stock corporations, it gets a little more complex.

No party to the application may serve on the board of any LPFM station (unless the organization applying is the LPFM organization and they pledge to divest their LPFM station before taking the station on the air.

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 FM 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.  Other information such as joint sales agreements, politcal file, among others, must also be maintained.  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.  

Full-service FM applicants and licensees are required to file ownership reports.  Biennial (i.e. every two years) ownership reports are due on December 1 of all even-numbered years (for commercial) or odd-numbered years (for noncommercial).  Ownership reports are also filed within 30 days of the grant of an original construction permit, within 30 days of consummating an assignment of license (transferring the station to a different nonprofit organization) or transfer of control (more than 50% change in parties within the same organizations).  Ownership reports may also need to be filed when applying for a station license (after construction) when circumstances have changed since the filing of the last ownership report.

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.

Public notice
A
n applicant for an original construction permit will be required to give public notice of their filing.  There will be specific wording for this announcement within the FCC rules.  The public notice can be placed on a website that is operated by the organization applying for the construction permit.  The notice must run on the website for at least 30 days following the time when the original construction permit application has been accepted for filing by the FCC.  Organizations without websites would be required to list their notice on a website for their community such as a local newspaper website, city government website (if they will even allow such listings) or through the state's broadcasters association.

Costs

Building and operating a radio station is not cheap.  In FM full-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 (when needed under §73.215), 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.  For commercial, rates are based on station revenue and other factors. For noncommercial, rates vary based on whether the station is music centric (more than 20% music) or talk centric (more than 20% talk).   Depending on the station’s population served, the total annual royalties can run from about $1,600 to as much as about $17,000.  Stations that decide to “stream” their audio over the internet are even higher and also include other organizations (SoundExchange).  Radio stations licensed to accredited schools may be able to get lower rates.  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. 

Commercial stations will pay an annual regulatory fee which is based on the class of the FM station and the population within the service contour of the station.  Its important to pay your regulatory fees every year as licensees who are delinquent on payments may be denied FCC services under the FCC's "red light" policy.

For noncommercial educational broadcast applicants and licensees, the FCC (federal government) does not charge any application or regulatory fees.

REC is providing Form 175 filing services for Auction 109 and for winners, providing long form application services for both commercial and noncommercial facilities.  More details can be found here.