FCC bills Texas FM winner $28,210 after it dropped three permits
A winning bid at an FCC auction is a commitment, and backing out of it costs money. Max Frequency LLC, a Texas licensee, now owes an interim $28,210 after it gave up three FM construction permits.
How the $28,210 was set
The FCC took 20% of the company's total net winning bids. Those three bids came to $141,050, which gives the interim obligation of $28,210.
Money Max Frequency already has on deposit with the commission will go toward it. The final assessment comes only after the Milano, Teague and Bogata permits sell in a future auction. The FCC explained in its order that the commission "cannot determine the full amount of the default payment that is owed" until then.
What a default costs under the rules
A bidder that walks away owes two things. One is a deficiency payment, a shortfall that appears when the permit later sells for less than the original net bid. The other is an additional payment, set at 20% of either the defaulter's own bid or the later winning bid, whichever is smaller.
Both depend on a second sale. Until it happens, there is nothing to compare the original bids against.
Three permits dropped in August
This past August, the company asked the Media Bureau to dismiss its three pending applications. The bureau agreed, and that triggered the default provisions in commission rules.
A construction permit authorizes its holder to build a station. Max Frequency, based in Fairview, Texas, had won three in Auction 109. They were a Class A facility at 102.7 FM in Milano, a Class C3 at 95.3 FM in Teague and a Class A at 97.3 FM in Bogata. It filed long-form applications for each before the 2021 post-auction deadline, and the Media Bureau accepted them.
The company has no other FCC history.
The auction offered 139 permits and ended five years ago. —
Our view
The $28,210 is a placeholder. The final bill turns on what the three permits fetch once they return to auction, and the report gives no date for that sale. A lower price the second time would enlarge the deficiency part under the rules described.
Source: Radio World