Isle radio company fined $600,000 by FCC
The Federal Communications Commission is demanding that Maui-based Visionary Related Entertainment LLC pay nearly $600,000 for withdrawing auction bids on an FM station construction permit that the company ended up purchasing in a subsequent auction.
The FCC had offered a construction permit for an FM station at 107.5 FM in Kihei in Auction 37 in November 2004 and again in Auction 62 January 2006. Visionary cast bids of $1.8 million in the first auction and just under $800,000 in the second, each time withdrawing its high bid prior to the auction's close.
Per auction rules, the FCC assessed an interim payment for the withdrawn bids each time, $53,310 and $23,970, which were withheld from the upfront payments Visionary made for auction participation.
The permit was offered again in January's Auction 68, when Visionary's $1.1 million bid topped three other companies.
In a certified letter sent to Visionary Monday and posted within the FCC Web site, the commission reminds Visionary, "a bidder that withdraws a high bid during the course of an auction is subject to a bid withdrawal payment equal to the difference between the amount of the withdrawn bid and the amount of the subsequent winning bid."
Since the Kihei construction permit later sold for less than Visionary's $1.8 million bid in Auction 37, the commission wants Visionary to make up the $590,720 difference.
There is also, however, a provision allowing for reimbursement of any withheld monies, if the subsequent winning bid exceeds a previously withdrawn bid. The $799,000 bid Visionary withdrew in Auction 62 is $310,000 less than its ultimate winning bid.
Visionary President John Detz did not respond to inquiries. The company has spent some $2,291,000 in FCC auctions since 2004.
Broadcasters do have recourse in these matters, according to an FCC spokes- woman who asked not to be named. She cited the Code of Federal Regulations provisions allowing the commission to explore compromises.
Otherwise, the company has 30 days from the date of the April 16 letter in which to make the extra payment to build the yet-unnamed Kihei FM station.