Here’s What The Commission Streamlined


On Thursday, the FCC adopted rules to extend to broadcast licensees the same streamlined rules and procedures that wireless carriers use for having foreign ownership approved.

The NAB applauded the rule change and said it looked forward “to greater investment in local sources of news and programming.” Here are the details from the Commission’s Report and Order.

The Communications Act establishes a 25 percent benchmark for foreign investment in U.S.-organized entities that control a U.S. broadcast, common carrier, or aeronautical fixed or en route radio licensee. Licensees must obtain FCC approval before foreign ownership exceeds 25 percent. That 25 percent number stays in place.

The Commission says a standardized filing and review process for broadcast licensees’ requests for approval of foreign ownership will provide the broadcast sector with a clearer path for investment. “The reformed methodology for ascertaining foreign ownership of publicly traded licensees and controlling U.S. parents will eliminate the need to perform surveys or random samples of shareholders, which the Commission finds are impractical for public companies in today’s marketplace.” Remember the issue Pandora was having when it tried to determine foreign ownership for the Connoisseur station it was purchasing?

Here are the specifics from the Commission’s Report and Order
– The Commission replaces the ad hoc case-by-case procedures for requesting approval of foreign ownership of broadcast licensees with a standardized filing and review process.
– The streamlined rules and procedures allow a broadcast licensee to request in its Section 310(b)(4) petition for declaratory ruling:

o   approval of up to and including 100 percent aggregate foreign ownership of its controlling U.S. parent;
o   approval for a proposed, controlling foreign investor to increase its equity and/or voting interests in the U.S. parent up to and including 100 percent at some future time without filing a new petition—this applies where the foreign investor would acquire an initial controlling interest of less than 100 percent; and
o   approval for a non-controlling foreign investor named in the petition to increase its equity and/or voting interests in the U.S. parent at some future time, up to and including a non-controlling 49.99 percent equity and/or voting interest.

  • The new rules require broadcast petitioners to seek specific approval only of foreign individuals or entities with a greater than 5 percent ownership interest (or, in certain situations, an interest greater than 10 percent).
  • The new rules allow broadcast licensees that have foreign ownership rulings to apply those rulings to all radio and television broadcast licenses then held or subsequently proposed to be acquired by the same licensee and its covered subsidiaries and affiliates, regardless of the broadcast service (e.g., AM, FM, or TV) or the geographic area in which the stations are located.

Reform Methodology for Assessing Compliance with Section 310(b).
– The reformed methodology provides a framework for a publicly traded licensee or controlling U.S. parent to ascertain its foreign ownership using information that is “known or reasonably should be known” to the company in the ordinary course of business.

– For publicly traded licensees and U.S. parent companies, the item formalizes the current equitable practice of recognizing a licensee’s good faith efforts to comply with 310(b) where the non-compliance was due solely to circumstances beyond the licensee’s control that were not known or reasonably foreseeable to the licensee.


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