The FCC has adopted rules to extend to broadcast licensees the same streamlined rules and procedures that common carrier wireless licensees use to seek approval for foreign ownership, with appropriate broadcast-specific modifications. The FCC also reformed the methodology for publicly traded broadcast and common carrier licensees and controlling U.S. parents to assess compliance with the statutory foreign ownership limits.
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.
The review by the Commission of proposed foreign ownership above 25 percent will stay in place. As a result, the rules modernize the foreign ownership filing and review processes so they are better adapted to the current business environment.
The FCC says that adopting 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.
With this 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 approval of up to and including 100 percent foreign ownership of its controlling U.S. parent.
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). They also 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 regardless of the broadcast service (e.g., AM, FM, or TV) or the geographic area.
NAB Executive VP/Communications Dennis Wharton said in a statement, "The FCC has taken an important step in allowing broadcasters to more freely and fairly compete for investment dollars. This order extends to broadcasters the same application and approval process that has been open to our competitors for years, and establishes more streamlined ways for radio and TV stations to comply with foreign ownership limits. NAB applauds the Commission's decision and looks forward to greater investment in local sources of news and programming."