The FCC admits it approved a 25% bidding credit in error during FM Auction 37, but it says the bidder shares the blame since it didn’t accurately apply for the credit and, it turned out, was not entitled. It also wouldn’t budge on a market value issue.
L.T. Simes II and Raymond Simes are the FM bidders in question. They had interest in two broadcast properties and applied for and received the 25% credit based on that small stake in the US broadcast industry. This took place back in September 2004.
They were the successful bidder for a CP to be licensed to Friars Point MS. However, the CP there KCLT-FM West Helena, in which the bidders had a combined 55% interest – and in a situation where the CP would overlap an existing holding, there is no bidding credit.
Since that fact was not disclosed at the time the credit was requested, the credit has been withdrawn, and the applicants have been appealing the withdrawal.
They made three main points: “that (1) they had no reason to know that the Commission had inadvertently erred when it initially approved the 25 percent bidding credit, and thus they bid to their maximum bidding potential taking into account the bidding credit; (2) the final price is above the fair market value of the station; and (3) the Commission should have presented options other than payment in 60 days or less.”
The FCC said that was their responsibility to know the rules and fully and accurately disclose the facts relevant to their credit eligibility. No help there.
As to the second point, the FCC said it was procedurally defective since it could and should have been brought up earlier in the appeal process; nevertheless, whether or not the final bid of $253K (the price without any credit applied) represented fair market value was not for the FCC to determine – instead, it is entirely up to the bidder to have done due diligence and determined the limits to which it would be willing to bid.
Finally, on the third count, the FCC repeated that the bidders were responsible for fully understanding and following the rules, and that the FCC is not obliged to provide special payment options.
The applicants’ petition to reconsider the rescission of the credit was denied.