Overview of the project

How we work with stations

List of frequencies

Legal memo on procedures

"Discount" for public radio stations in the auction

Contract for SRG services

About SRG

CPB will cover half the fees charged to licensees that contract with SRG and PRC for direct assistance with the auction process.
   S T A T I O N   R E S O U R C E   G R O U P   
P U B L I C   R A D I O   C A P I T A L

An Opportunity for Public Radio

Later this year the Federal Communications Commission will auction 359 unoccupied commercial FM frequencies in mid-sized and smaller communities throughout the country. Public radio licensees may be able to compete successfully for some of these opportunities in order to extend service to new areas or add a second channel.

The FCC has released the rules governing this auction, including various deadlines for participation. The auction, originally slated for May, is now scheduled to begin December 5, 2001. The Station Resource Group, working through its Public Radio Capital project, will help members and other public radio stations participate in the auction and acquire channels. The Corporation for Public Broadcasting has agreed to fund some of the associated costs, including paying half the SRG/PRC fees for station-specific assistance in the auction.

Communications attorney John Crigler has prepared a detailed background memo on the procedures and important deadlines that is critical reading for anyone thinking about participating.

It is also worth reviewing the FCC's Public Notice, which can be located at www.fcc.gov/wtb/auctions. Scroll down on your left to the Recent Releases and locate Public Notice DA 01-119 (released January 19, 2001): Auction Notice and Filing Requirements for FM Broadcast Construction Permits.

Listed below are important steps and dates for your participation:

    Immediately confirm the frequencies in which you are interested with Marc Hand. SRG and Public Radio Capital will work with stations (SRG members and non-members) on a first-come, first-serve basis. We cannot represent more than one station interested in the same frequency. Marc can be reached at 303.781.5101 or mohand@aol.com.

    Sign a Letter of Agreement for SRG and PRC's auction services. Marc Hand is coordinating these agreements.

    SRG and PRC's charge for direct assistance with the auction process is $5,000 for the first frequency a licensee pursues and $2,000 for each additional frequency. CPB will underwrite half the above fees.

    Work with Marc Hand to determine the best way to handle the required FCC deposit for these channels. The deposits range from $1,500 to $200,000.

You must also work out how to finance the full cost of securing the channel if you prevail in the auction. The two most attractive financing options at this time are:

    1. Public Radio Capital makes the acquisition itself, arranges long-term financing of the cost, and executes an operating agreement with your licensee that includes an option to buy the channel at the end of the five-year penalty-free ownership period set by the FCC. The operating agreement would require a payment from your licensee to Public Radio Capital sufficient to cover the debt service and associated costs.

    2. Public Radio Capital works with your licensee to arrange the financing of your payment for the frequency to the FCC using one of several options we have been developing.

Marc will also work with you to assess other financing options, such as through a university licensee or local bank, that might offer competitive financing terms.

Important dates to keep in mind:

September 24 through October 5. Short Form 175 must be filed by all parties who want to participate in the auction. The filing must be done electronically.

November 5. Upfront Payment amount must be wired to the FCC.

December 5. Auction bidding begins.

There is a lot of ground work behind the scenes and there are procedures throughout the process that must be followed down to the last detail. Marc Hand will keep you informed of all this information as you work through the process, help you assess the market value of your frequency, ensure that your Upfront Payment amount reflects the bidder credits you want in play on your behalf, work with you on the best financing package for your station, and coordinate the bidding according to the ceiling you have established for the frequency.

Please note that licensees that intend to have Public Radio Capital acquire a channel and then execute operating agreements with PRC must complete such agreements, through a separate contract with Public Radio Capital, in advance of the auction.