Failing to follow through when winning an auction for a new station is bad enough. And from there, it can only get worse, as defaulting bidders are required to assure that American taxpayers are not left holding the financial bag.
Four winning bidders are now being required to make interim payments to the FCC until such time as the allotments are won by a new bidder.
To assure the integrity of the auction, the FCC requires that the amount of the winning bid is exactly what is paid. And if the winning licensee company pulls out, if must make up the difference if the station is eventually sold to a new bidder for a lower price.
Then amount owed by four defaulting bidders will not be known until they are once again put on the auction block, so they are now being required to make interim payments until that event takes place. IN all four cases, the money is being taken from the upfront money still being held by the FCC.
Ace Radio Corporation won a CP in Mertzon TX with a bid of $309,400 and owes an interim payment of $9,282.
Black Entrepreneurs Association won a CP in Wickburg AZ with a bid of $63,700 and owes an interim payment of $12,740.
Efrain O. Saille won CPs in Cotulla and Presidio TX with a total bid of $19,825 and owes an interim payment of $3,965.
Nassau Broadcasting won CPs in Jefferson NH and Hardwick VT with a total bid of $1,641,000 and owes an interim payment of $49,230.
RBR-TVBR observation: The moral of the story is to stay far far away from FCC auctions if not 1,000% sure that your company will be able to follow through all the way to turning a station on and providing service to the local community in the allotted time.
Of course, that would be a no-brainer if we all had access to a well-functioning crystal ball. We know for a fact that Nassau fell under extremely hard times and went under, and have no doubt that the other companies referenced by the FCC have hard luck stories of their own.
This has always seemed to us one of the harshest series of events to which the FCC is a party. It is clearly in the category of kicking a company when it is down.
However, we can also see that without an extremely strong requirement that bidders follow through and actually see the process through to a functioning station, it would be very easy to game the system by bidding on as many stations as one wishes and then picking and choosing which CPs to build and which to abandon.
So our sympathies lie with the unfortunate companies caught in this web, and our warnings go out to those who would enter the process without an exceptionally strong safety net.
