DECEMBER 2015 AAntenna TM A N U P D A T E O N C O M M U N I C A T I O N S L A W & I S S U E S New Schedule for Reverse Reverse Auction Anti- Auction Filing Window: Collusion Rule Covers December 8 - January 12 All TV Licensees The FCC has postponed the filing window for applica - The FCC’s anti-collusion rules are designed to pro - tions for the reverse television spectrum auction. The win - tect the integrity of the auction process by prohibiting dow had been set for December 1 to 18. Now it is resched - disclosures of auction-related strategic information that uled to open at 12 noon Eastern Time on December 8 and to could prevent an auction from being fair and transpar - conclude at 6:00 p.m. Eastern Time on January 12. The ent. These rules apply to the reverse auction just as they delay resulted from revisions to the coverage and popula - would to any other FCC auction. Because of the unique tion data for a small number of television stations. If these qualities of the reverse auction, the Commission has stations remain on the air after the auction, the Commission released a Public Notice with guidance about how to is obligated to repack them, as well as all other stations, comply with the rules in this proceeding. with essentially the same coverage parameters. The opening Section 1.2205(b) of the Commission’s rules states bid prices for those stations have also been recalculated. that, subject to certain specific exceptions, “beginning The Commission had promised to give licensees at least 60 on the deadline for submitting applications to partici - days after the announcement of the opening bids in which to pate in the reverse auction and until the results of the evaluate their prospects and decide whether to participate. incentive auction are announced by public notice, all The postponement was needed to give the affected stations full power and Class A broadcast television licensees the full 60-day due diligence period before the filing dead - are prohibited from communicating directly or indi - line. The bidding is set to begin on March 29. rectly any incentive auction applicant’s bids or bidding In other recent Public Notices, the Commission has also strategies to any other full power or Class A broadcast finalized the form for claiming reimbursements for expens es television licensee or to any forward auction appli - continued on page 3 cant.” For purposes of the rule, a television licensee Expired License of School continued on page 2 Station Protected Against IN THIS ISSUE Short-Spaced Application Deadlines To Watch............................ 4-6 The FCC’s Media Bureau has rejected a proposal by Press Noncom Translator Window.................... 7 Communications to swap frequencies between its own WBHX, Tuckerton, New Jersey, and WZBZ, Pleasantville, New Jersey so 600 MHz Band Interference.................... 7 as to accommodate moving WBHX to a new antenna site. Changing the channel for WZBZ would make it short-spaced to the antenna site for WAJM, Atlantic City, New Jersey. Press sub - For more information about or help with any of mitted its proposal in August, 2010. The license for WAJM had the items reported in ANTENNA , please contact: expired more than three years earlier and no license renewal application had been filed. Press asserted that WAJM no longer existed and did not merit protection at that point. It argued that no rule waiver or other special arrangement should be needed. The licensee of WAJM, the Atlantic City Board of Education, 1200 Seventeenth St. NW awoke to the situation and filed a tardy license renewal applica - Washington, DC 20036 tion in September, 2010. The proceeding continued for so long Tel: 202.663.8184 that the next regular license term ended and a second, timely, Fax: 202.663.8007 continued on page 6 E-mail: [email protected] Reverse Auction Anti-Collusion Rule continued from page 1 includes all controlling interests in the licensee, and all offi - prevent such third parties from becoming conduits of infor - cers, directors and governing board members. Generally, a mation to others by requiring them to sign nondisclosure party that submits an application becomes an “applicant” agreements. Where a law firm represents two separate cov - under this rule at the deadline for submitting applications to ered parties, an information firewall between attorneys may participate in the reverse auction (January 12), and for the pur - be effective, although the Commission’s preference would be poses of the rule, that party’s status does not change regard - for the applicants to use different law firms entirely. less of subsequent developments during the auction process, The prohibition against auction-related disclosures including whether or not that applicant actually bids. Notice includes disclosures that would typically occur in the context that the restriction applies to all full power and Class A televi - of negotiating the sale, assignment or transfer of control of a sion licensees – not merely those that are applicants. broadcast license. Ordinarily, a party negotiating such an To protect the ongoing business integrity of television agreement would want and need to disclose to the other stations, the FCC will not disclose the existence or contents party information about something as important to the of reverse auction applications. However, it is not a viola - future of the station as the reverse auction application of the tion of the anti-collusion rule for a reverse auction appli - station in question, or of other stations in the market. cant to disclose whether or not it has filed or plans to file Nonetheless, such disclosures would be a violation of the an application. On the other hand, disclosing the contents anti-collusion rule. of an application and/or the applicant’s bidding strategy The auction rules bar the assignment or transfer of con - would be a violation in most cases. The Commission cau - trol of an applicant with an application pending in an auc - tions licensees to be careful when communicating their tion. The Commission has waived that rule for the reverse own or another party’s applicant or non- auction with the following conditions: applicant status so as to avoid communi - (1) the assignment/transfer-of-control cations that convey or appear to convey application must be accepted for filing strategic information. For instance, a by the deadline for filing reverse auction communication that a broadcaster “is ...the restriction applications (i.e., by January 12), and (2) not bidding” in the auction, in contrast the application must include the express to “is not an applicant,” appears to vio - applies to all... representation that the buyer agrees to late the rule, according to the be bound by the original applicant’s Commission, and would trigger an obli - actions in the auction. The Commission gation to report a violation. television took this unusual step on its own initia - There are three exceptions under licensees— tive out of a concern that prohibiting which communications regarding bids or assignments and transfers of control bidding strategies are permissible: (1) during the auction would discourage Communications between covered broad - not merely those some licensees from participating in the cast licensees are permitted if the licensees auction, contrary to the agency’s overall share a common controlling interest, that are applicants policy of attempting to facilitate as much director, officer or governing board mem - participation as possible. ber. (2) Communications are permitted Having outlined the prohibitions, the Commission made between a broadcast licensee and a forward auction appli - it clear that the rule is intended to have a narrow scope, cov - cant if a controlling interest, director, officer or governing ering only matters related to an applicant’s bidding and bid - board member of the broadcast licensee is also a controlling ding strategies. Routine business communications do not interest, director, officer or holder of any ten percent or violate the rule. Nor do communications about plans for greater ownership interest in the forward auction applicant continuing operations or near-term changes in operations. as of the reverse auction application filing deadline. (3) Such disclosures do not necessarily lead to legitimate infer - Communications are also permitted between broadcast ences about a licensee’s reverse auction bidding strategy. licensees that are parties to a channel sharing agreement that was executed prior to the reverse auction application filing The auction rules require covered parties (i.e., all full deadline and that was disclosed in a reverse auction applica - power and Class A television licensees and all forward auc - tion. tion applicants) to report any violation of the anti-collusion rules that they experience or witness promptly by the “most The prohibition generally only pertains to covered par - expeditious means available” to the chief of the Auctions and ties (i.e., broadcast television licensees and forward auction Spectrum Access Division in the FCC’s Wireless applicants) and does not necessarily prohibit communica - Telecommunications Bureau. The failure to submit a report tions to third parties, such as attorneys, consultants or of a known violation is itself a separate rule violation, “with lenders. The Commission suggests taking reasonable steps to attendant consequences.” 2 New Schedule for Reverse Auction Filing Window continued from page 1 incurred by stations in the repacking process, announced tion that it submits to the auction. There are three instructions for completing and filing the Form 177 appli - options: (1) go off air, (2) move to low VHF channel, and cation, and clarified procedures for the disbursement of (3) move to high VHF channel. The applicant may indi - reverse auction proceeds. cate as many of these options on the application as the station is eligible for.