There are two different answers to this question depending on which channel/frequency the FM station with the cancelled license is on.
Non-reserved (Commercial) band (92.1~107.9 MHz)
In the non-reserved (commercial) FM band, the FCC allots specific channels and station classes to specific communities before a station is licensed. Likewise, if a non-reserved band FM station on a certain channel in a certain community decides to cancel their license or if the license is expired and not renewed (or if the station is silent for more than 365 consecutive days), the station may be gone, but the original allotment will remain. LPFM stations are required to protect vacant FM allotments. Sometimes, the allotment may be at a different set of reference coordinates than where the station is, so it may, in some rare cases show as available. Keep in mind though, that in the long term, the allotment that was associated with the FM station with the cancelled license could eventually come back up for auction and when that happens, a new full-power FM station will likely come to that channel, which may cause interference or receive inteference from the LPFM station, which in many cases will result in the LPFM station being displaced.
It should be noted that FM translators are not required to protect vacant FM allotments, however, the same caveats will apply that there may be a station on that channel some day and that any secondary services, such as FM translators are located in places that will cause interference to the full-service FM station, the secondary station (translator or LPFM) will have to give way and change frequency or go off the air.
Now the procedure is a bit different below 92...
Reserved (Non-Commercial Educational) band (88.1~91.9 MHz)
In the reserved noncommercial educational (NCE) band, there is no table of allotments. If a reserved-band full-service station's license is cancelled or if an original construction permit does not build within the designated construction period resulting in the cancellation of the construction permit, the is no pre-set allotment to fall back on and the spectrum would become available for LPFM or FM translator use subject to meeting distance separation requirements to all other stations pursuant to §73.807 and to Channel 6 full-service and low power TV stations, pursuant to §73.825. Normally, spectrum will not be available until 30 days after the cancellation is published in the FCC "Actions" Public Notice. This allows for the previous licensee to file a Petition for Reconsideration on the cancellation.
