Federal Communications Commission
Washington, D.C. 20554
April 24, 2007
DA 07-1827
Released:  April 24, 2007
In Reply Refer to:
1800B3-TSN
Ruby Radio Corporation
c/o David Tillotson, Esq.
4606 Charleston Terrace, N.W.
Washington, DC  20007
Mr. Scott Powell
c/o Lee J. Peltzman, Esq.
Shainis and Peltzman, Chartered
1850 M Street, N.W.
Suite 240
Washington, DC  20036
In re: Broadcast Auction No. 84
Scott Powell
New(AM), Elko, Nevada
Facility ID No. 161099
File No. BNP-20041029AJL
Application for Construction Permit
Dear Counsel:
We have before us the January 5, 2005, Petition to Deny (Petition) the above-noted application 
of Scott Powell (Powell) for a new AM broadcast station at Elko, Nevada.1 The Petition was filed by 
Ruby Radio Corporation (Ruby), licensee of KHIX(FM), Carlin, Nevada.  As explained below, we 
deny Rubys Petition, and grant Powells application.
Powell filed a Form 175 short-form application proposing a new AM station at Elko during the 
filing window for AM Broadcast Auction No. 84 (Auction 84).2 Because his Elko proposal was not 
mutually exclusive with any other Auction 84 applications, it was deemed a singleton, and Powell was 
directed to file a complete Form 301 long-form application for Elko.3
  
1 File No. BNP-2004029AJL.
2 AM New Station and Major Modification Auction Filing Window; Minor Modification Application Freeze, Public 
Notice, 18 FCC Rcd 23016 (MB/WTB 2003).
3 AM Auction No. 84 Singleton Applications  Media Bureau Announces Form 301 Application Deadline and Ten-
Day Petition to Deny Period, Public Notice, 19 FCC Rcd 16655 (MB 2004).
2
In its Petition, Ruby alleges that Powells business partner, Amy Meredith, sent Rubys president, 
Ken Sutherland, an unsolicited e-mail dated December 26, 2004, in which she purported to offer the 
rights to, inter alia, Powells yet-to-be-granted Elko permit.4 Ruby argues that well settled 
Commission policy dictates that construction permits should be granted only to qualified applicants who 
have a bona fide intent to construct the facilities they propose and to render a broadcast service.5 Ruby 
concludes that, because Powells agent offered the rights to the Elko permit shortly after the long form 
application was filed (and before it was accepted for filing), Powell has demonstrated a lack of bona fide
intent to construct and operate the facilities.  Accordingly, Ruby urges that the application be denied.
There is no longer a flat prohibition against for-profit sale of construction permits acquired 
pursuant to competitive bidding procedures.6 Rejecting the traditional rationale for prohibiting such for-
profit sales of unbuilt facilities, namely, that to do so would encourage spectrum speculation, the 
Commission explained:
Our concern with spectrum speculation in an auction environment, where there are strict 
bidding and payment requirements and where the winning bidder has paid fair market 
value for an authorization, is minimal.  We also believe that the competitive bidding 
process itself, where the permittee may be required to make a substantial front end 
payment, provides a strong impetus for timely station construction.  Even in cases where 
a commercial permit is not issued pursuant to an auction, e.g., because only one 
application was filed for a frequency and therefore the application was granted as a 
singleton, we believe it is appropriate to eliminate reimbursement restrictions.  
Applicants holding these permits would have been potentially subject to the auction 
process.  Moreover, our concerns about speculation will be at a minimum where an 
auction fails to attract a single competing proposal.  Even assuming that singleton 
commercial station permittees do not have the same impetus to build quickly in order to 
recoup auction expenditures, we believe that the automatic cancellation and forfeiture 
provisions adopted in this Report and Order . . . will provide sufficient incentives to 
construct authorized facilities promptly.7
In this case, Powell appears to be offering to assign an unbuilt (and, indeed, un-awarded) 
construction permit for an amount not limited to Powells expenses in prosecuting the application for the 
permit.  We note that Ruby provides no evidence that Powell has succeeded in finding a buyer for the 
Elko permit.  Thus, there is no evidence to contradict the Commissions observation that anyone 
interested in acquiring singleton facilities obtained in an open AM auction filing window would 
presumably have filed a competing auction window application.  Moreover, even if Ruby is correct that 
Powell lacks a bona fide intent to construct its proposed new AM station at Elko, and in fact fails to 
construct that station, the construction permit will be canceled in three years in accordance with our strict 
broadcast station construction and automatic permit cancellation requirements.8
  
4 Ruby attaches a printout of the e-mail exchange between Meredith and Sutherland as Exhibit A to the Petition.
5 Petition at 2, citing Calhoun County Broadcasting Company, Memorandum Opinion and Order, 57 R.R.2d 641 
(1984).
6 1998 Biennial Regulatory Review  Streamlining of Mass Media Applications, Rules, and Processes, Report and 
Order, 13 FCC Rcd 23056 (1998), recon. granted in part, 14 FCC Rcd 17525 (1999) (Non-Technical 
Streamlining).
7 Non-Technical Streamlining, 13 FCC Rcd at 23071.
8 See 47 C.F.R.  73.3598.
3
We observe, however, that Rubys concerns do not lack merit merely because they arise here in 
an auction context.  When the Commission in Non-Technical Streamlining noted its minimal concern 
for the possibility of spectrum speculation, this did not necessarily mean that the Commission implicitly 
condoned such speculation.  It concluded only that such speculation was unlikely, given the risks and 
expenses associated with prosecuting auction applications.  As recently as two years prior to releasing 
Non-Technical Streamlining, the Commission re-affirmed that [c]onstruction permits are granted only to 
qualified applicants in reliance upon their bona fide intention to place the proposed station on the air and 
to provide broadcast service.9 The Commission went on to state that this policy was established to 
preclude the use of broadcast authorizations as a means of obtaining financial gain without rendering the 
broadcast service which, alone, justifies grant of the permits.10 The auction process itself is designed to 
further the Commission policy of promoting rapid deployment of broadcast service to the public.11 The 
evidence provided by Ruby, namely, the Meredith e-mail offering two AM stations for sale before 
obtaining their permits (and referencing five other full-power AM stations and an FM translator that, 
presumably, were on offer as well) could be viewed as an attempt by Powell to profit from yet-unawarded 
permits without any intent to construct the facilities.  However, as noted above, Powell and Merediths 
success in selling these permits is by no means guaranteed. Thus, we think that, rather than grant Rubys 
Petition, the better course is that followed in Silva and Zaragoza and Tongier, that is, to reserve 
consideration of these questions until such time, if any, as Powell or his affiliates attempt to assign any 
permits they may obtain.
Accordingly, Rubys Petition to Deny IS DENIED.  Powells application for a construction 
permit for a new AM station at Elko, Nevada IS GRANTED.
Sincerely,
Peter H. Doyle
Chief, Audio Division
Media Bureau
  
9 TRMR, Inc., Memorandum Opinion and Order, 11 FCC Rcd 17081, 17087 (1996).
10 Id. (quoting Assignment and Transfer of Construction Permits, 33 Fed. Reg. 12678 (Sept. 6, 1968)).  See also 
Richard R. Zaragoza, Esq. and John Tongier, Esq., Letter, 14 FCC Rcd 1732, 1742-43 (MMB 1998) (Zaragoza 
and Tongier) (reiterating principle that when reviewing assignment of a broadcast construction permit, the terms 
of the arrangements between parties and the totality of the facts and underlying circumstances must be reviewed to 
determine whether the facts reflect a permittees intention to construct the station or are more reflective of an up-
front sale with consummation postponed until after the station goes on the air, citing William L. Silva, Esq., Letter, 
Ref. No. 1800B3-MFW (MMB July 24, 1995) (Silva), review denied sub nom. Choctaw Broadcasting 
Corporation, Memorandum Opinion and Order, 12 FCC Rcd 8534 (1997), in which the Mass Media Bureau 
concluded from sale documents and the lack of any concrete steps toward station construction that an assignor 
permittee lacked intention to construct).
11 See 47 U.S.C.  309(j)(3)(A).  See also 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, 15935 (1998), on recon. Memorandum Opinion and Order, 14 FCC Rcd 8724, on 
further recon. Memorandum Opinion and Order, 14 FCC Rcd 14521 (1999).