The FCC has announced that it intends to consider foreign investment in broadcast companies at its November 14, 2013 open meeting.
Specifically, the Commission will address a petition for declaratory ruling filed by a group of broadcasters and consumer organizations seeking clarification of the FCC’s policy for foreign investment in broadcast licensees under Section 310(b)(4) of the Communications Act. As we explained in a previous post, the petition requested that the FCC take a case-by-case approach to proposals for indirect foreign ownership of broadcast licensees in excess of 25 percent. Wiley Rein submitted comments in support of the petition.
In a statement, Acting Chairwoman Mignon Clyburn stated:
Today, I circulated a declaratory ruling that clears the way for increased access to capital and potential new investors for the broadcast sector. Approval of this item will clarify the Commission’s intention to review, on a case-by-case basis, proposed transactions that would exceed the 25 percent benchmark that restricts foreign ownership in companies holding broadcast licenses. I look forward to working with my colleagues toward a final Commission vote next month.
Commissioner Ajit Pai also issued a statement voicing support for the declaratory ruling:
Under our rules, a foreign company can indirectly hold more than a one-quarter stake in our nation’s largest wireless carriers, cable operators, cable programmers, and Internet backbone providers. Yet that company cannot own a similar interest in a single radio station in rural Kansas. This disparity makes no sense, especially considering the difficult financial circumstances facing many broadcasters. Now is the time for the Commission to revise this out-of-date restriction.
With the support of Acting Chairwoman Clyburn and Commissioner Pai, it appears likely that the Commission will adopt the proposal and issue a declaratory ruling. Doing so would create opportunities for broadcasters to access new sources of capital and bring greater parity to the FCC’s approach to foreign investment for different types of licensees.
We will provide additional information as it becomes available.