> January 19, 2001

J. Dominic Monahan, Esq.

Luvaas, Cobb, Richards & Fraser, P.C.

777 High Street, Suite 300

Eugene, Oregon 97440-2787

Re: ROB ALLEN HAUSER

Request for Refund of Upfront Payment

For MX Group FM 130 in Closed Broadcast

Auction No. 25

Dear Mr. Monahan:

This letter is in response to your Request for Refund of Upfront Payment
("Request") filed April 20, 2000, on behalf of Mr. Rob Allen Hauser, the
winning bidder in MX Group FM 130 in the Closed Broadcast Auction No.
25. For the reasons set forth below, we deny your Request.

The Commission received three mutually exclusive long-form applications
for construction permits for MX Group FM 130 -- FM Channel 249A at
Pullman, Washington. Those applications were filed by Radio Palouse,
Inc. ("Radio Palouse"), Lamonica Media, LLC ("Lamonica Media"), and Mr.
Hauser. The Mass Media Bureau and the Wireless Telecommunications Bureau
issued a *Public Notice*[^1] on July 9, 1999 announcing that these
applicants would be eligible to participate in an auction to begin on
September 28, 1999.[^2]

The *July 9^th^ Public Notice* stated that, in order to participate in
the auction, all applicants would have to submit a FCC Form 175
(short-form application) by the deadline of August 20, 1999.[^3] The
*Broadcast First Report & Order* stated that if only one acceptable
short-form application was received for a particular construction
permit, the auction would be cancelled for that construction permit.[^4]
The *July 9^th^ Public Notice* also stated that "if an applicant were to
submit a short-form application but fail to timely tender an upfront
payment, it would retain its place in the MX Group but, having purchased
no bidding eligibility, would not be eligible to bid."[^5] It further
stated that if " . . . two or more parties file short-form applications
in their MX Group, but only one submits an upfront payment, mutual
exclusivity would exist for auction purposes (since multiple short-form
applications are tendered) and, in such case, the party making its
upfront payment is not entitled to both a refund and the grant of a
construction permit."[^6]

In this case, short-form applications were submitted by Mr. Hauser,
Radio Palouse, and Lamonica Media. Subsequently, the auction staff
issued a *Public Notice*[^7] on September 3, 1999 accepting for filing
Mr. Hauser's short-form application and listing as incomplete the
short-form applications of Radio Palouse and Lamonica Media. The
*September 3^rd^ Public Notice* stated that applicants with incomplete
short-form applications could become qualified to bid in the auction
only if they made the required upfront payment by 6:00 p.m. on Monday
September 13, 1999, and resubmitted complete applications by 5:30 p.m.
on September 14, 1999. Radio Palouse did not resubmit its short-form
application before the deadline.[^8] Lamonica Media did resubmit its
short-form application before the deadline.[^9] Thus for MX Group FM
130, the Commission received two acceptable short-form applications, one
from Mr. Hauser and the other from Lamonica Media. However, Lamonica
Media failed to submit an upfront payment and therefore, Lamonica Media
was not qualified to bid in the auction.[^10]

In the first round of bidding for Auction No. 25, Mr. Hauser placed the
minimum opening bid equal to his upfront payment (\$25,000) on FM
Channel 249A, Pullman, Washington. As the highest and only bidder in MX
Group FM 130, Mr. Hauser was awarded the license. [^11] In his Request,
Mr. Hauser argues that because he was the only qualified bidder for the
construction permit for Channel 249A at Pullman, Washington, the
Commission was precluded from assigning the permit through competitive
bidding.[^12]

Section 309(j) of the Communications Act requires the Commission to
assign any initial license or construction permit through an auction
when mutually exclusive short-form applications are accepted for
filing.[^13] In other words, if the Commission has received more than
one acceptable short-form application for the same license or
construction permit, the statute requires that the Commission conduct an
auction. The Commission received two acceptable, mutually exclusive
short-form applications for a construction permit for channel 249A at
Pullman, Washington: one from Mr. Hauser and one from Lamonica Media. In
light of these competing short-form applications for the same license,
the Commission was required to assign the license through an
auction.[^14] The factual circumstances present in this case were
clearly addressed in the *July 9^th^ Public* *Notice*. Because both Mr.
Hauser and Lamonica Media submitted acceptable short-form applications,
mutual exclusivity existed, regardless of the fact that Lamonica Media
did not purchase bidding eligibility by timely tendering an upfront
payment.[^15]

Mr. Hauser argues that a statement in the *Broadcast MO&O* supports his
Request. Specifically, Mr. Hauser relies on the statement that the
Commission would ". . .conduct competitive bidding for any broadcast
permit only where competing applicants have submitted acceptable
short-form applications for any broadcast permit and have been found
qualified to bid."[^16] This statement is taken out of context. In the
*Broadcast MO&O,* the Commission considered and rejected a suggestion to
adopt a "post-auction" evidentiary procedure to determine whether a
winning bidder was the sole qualified applicant and therefore entitled
to a grant of license without remittance of its winning bid.[^17] In the
context of rejecting this "post-auction" procedure, the Commission
stated that because all prospective bidders were found qualified to bid
before being allowed to participate in an auction it was unnecessary and
redundant to adopt a "post-auction" procedure.[^18] In this sentence,
the Commission was not addressing the determination of mutual
exclusivity because mutual exclusivity is a "pre-auction" determination.
Thus, the cited language is not useful in a discussion of mutual
exclusivity, and does not alter the Commission's statutory obligation to
use competitive bidding.

Mr. Hauser's Request is an untimely attempt to revise the rules after
the auction has been conducted.[^19] The *July 9^th^ Public Notice*
anticipated and clearly addressed the factual circumstances that
developed for MX Group FM 130.[^20] All of the bidders in Auction No.
25, including Mr. Hauser, had notice of the auction procedures that
would apply.[^21] Because acceptable, mutually exclusive short-form
applications for FM Channel 249A at Pullman, Washington were filed, Mr.
Hauser has failed to establish that a refund would be appropriate.

Accordingly, IT IS ORDERED, that the Request for Refund of Upfront
Payment filed by Rob Allen Hauser, IS DENIED.

Sincerely,

Margaret W. Wiener

Chief, Auctions and Industry Analysis Division

Wireless Telecommunications Bureau

[^1]: Closed Broadcast Auction, Notice and Filing Requirements for
    Auction of AM, FM, TV, LPTV, and FM and TV Translator Construction
    Permits Scheduled for September 28, 1999, Minimum Opening Bids and
    Other Procedural Issues, *Public Notice,* 14 FCC Rcd 10632 (1999)
    ("*July 9^th^ Public Notice*"*).*

[^2]: *Id*. at 10633, 10692.

[^3]: *Id*. There is no application fee required when filing a FCC Form
    175. Auction of AM, FM, TV, LPTV, and FM and TV Translator
    Construction Permits Scheduled for September 28, 1999, Minimum
    Opening Bids and Other Procedural Issues, *Public Notice,* 64 Fed.
    Reg. 39995, 39998, ¶ 33 (1999).

[^4]: Implementation of Section 309 (j) of the Communications
    Act*-*Competitive Bidding for Commercial Broadcast and Instructional
    Television Fixed Service Licenses, *First Report and Order,* 13 FCC
    Rcd 15920, 15980, ¶ 154. (1998) ("*Broadcast First Report &
    Order").*

[^5]: *July 9^th^ Public Notice,* 14 FCC Rcd at 10647.

[^6]: *Id*.

[^7]: Closed Broadcast Auction, Status of Applications to Participate in
    the Auction, *Public Notice,* 14 FCC Rcd 14113 (1999) ("*September
    3^rd^ Public Notice*").

[^8]: Closed Broadcast Auction, 224 Qualified Bidders, *Public Notice,*
    DA 99-1912, Attachment C (1999) ("*September 17^th^ Public
    Notice").*

[^9]: Mr. Hauser concedes in his Request that Lamonica Media "did submit
    a curative amendment." *See* Request for Refund of Upfront Payment
    filed on Apr. 20, 2000, at 1-2 ("Request").

[^10]: *September 17^th^ Public Notice*, DA 99-1912, Attachment C.

[^11]: Mr. Hauser was not required to bid. Had he chosen not to bid, his
    upfront payment would have been returned but no construction permit
    would have been issued. *See July 9^th^ Public Notice,* 14 FCC Rcd
    at 10647.

[^12]: Request at 2 (citing Matter of Implementation of Section 309(j)
    of the Communications Act -- Competitive Bidding for Commercial
    Broadcast and Instructional Television Fixed Service Licenses,
    *Memorandum Opinion and Order*, 14 FCC Rcd at 8724, 8751, ¶ 54
    (1999) ("*Broadcast MO&O*")).

[^13]: Section 309(j)(1) mandates the use of competitive bidding if
    "mutually exclusive applications are accepted for any initial
    license or construction permit." 47 U.S.C. § 309(j)(1); *see also*
    *Benkelman Telephone Company v. Federal Communications Commission*,
    220 F. 3d 601 (2000) (rejecting an argument that the Commission's
    procedures artificially created artificial or phantom mutual
    exclusivity).

[^14]: 47 U.S.C. § 309(j)(1)*; see also Broadcast First Report and
    Order,* 13 FCC Rcd at 15974, 15980, ¶¶ 142, 154; *Broadcast MO&O*,
    14 FCC Rcd at 8751, ¶¶ 54-55 n. 77, 78; 47 C.F.R. § 73.5002(a)(b);
    47 U.S.C. § 309(j)(1); *July 9^th^ Public Notice,* 14 FCC Rcd at
    10646-10648. The *September 3^rd^ Public Notice* listed applicants
    who were disqualified from participation in Auction No. 25 because
    mutually exclusive applications were not filed for their respective
    MX Groups. *September 3^rd^ Public Notice*, 14 FCC Rcd at 14114,
    14151-14153 (1999); *see also* *KDTV,* DA 00-627, 15 FCC Rcd at 5570
    (2000) (finding that Univision's application was the only acceptable
    short-form application on file, and in the absence of mutual
    exclusivity, should not have been sent to auction).

[^15]: Upfront payments are not application fees nor are they attributed
    to specific licenses, but instead they are translated to bidding
    units to define a bidder's maximum bidding eligibility in any single
    round of bidding. *July 9^th^ Public Notice,* 14 FCC Rcd at 10648.

[^16]: *Broadcast MO&O*, 14 FCC Rcd at 8751, ¶ 54.

[^17]: *Id.* at 8750-8752, ¶¶ 52-56.

[^18]: *Id*.

[^19]: *See* 47 C.F.R. §§ 1.401-1.430; *see also* Closed Broadcast
    Auctions Scheduled for September 28, 1999; Comment Sought on Minimum
    Opening Bids and Other Auction Procedures, *Public Notice,* 14 FCC
    Rcd at 8189, 8198 (1999) ("*May 17^th^ Public Notice*").

[^20]: *See July 9^th^ Public Notice*, 14 FCC Rcd at 10646-10648.

[^21]: *Id.* at 10632; *May 17^th^ Public Notice,* 14 FCC Rcd at 8189.