The Media Bureau of the Federal Communications Commission (FCC) has released the first-ever decision permitting foreign citizens to own 100% of broadcast station licensees. In the declaratory ruling, the FCC authorized two Australian citizens each to own 50% of Frontier Media, LLC, the parent company of broadcast licensees owning seven AM radio stations, eight FM radio stations, thirteen FM translators, and one TV translator in Alaska, Arkansas, and Texas. As a condition of approval, the owners must obtain prior consent for any additional foreign owners, but the ruling imposes no other significant conditions.
This ruling shows just how far we have come since 2013, when the FCC first indicated a willingness to consider, on a case-by-case basis, whether to allow foreign ownership exceeding a mere 25% in broadcast companies. Until that time, the FCC had applied a de facto 25% cap on such investments, while taking a much more relaxed approach to foreign ownership in telecom companies subject to the foreign ownership rules. Then, in 2015, the FCC acted favorably upon Pandora’s request to exceed the 25% benchmark, permitting it to have up to 49.99% aggregate foreign ownership and imposing certain compliance and reporting conditions and, ultimately, approving its acquisition of a radio station. Fast forward to late last year, when the FCC adopted new foreign ownership rules to streamline its approach to broadcast petitions for declaratory ruling and establish a new framework for public companies to assess foreign ownership compliance. And following on the heels of that order, the FCC permitted Univision to have up to 49% foreign ownership, including up to 40% held by Televisa, a Mexican corporation, and approved additional foreign investment in Pandora.
These developments are a welcome change from the prior regime under which broadcasters existed, and cement the FCC’s recognition—reiterated in the most recent decision—that it serves the public interest to “encourage new sources of investment in the broadcast industry, including foreign investment.” Although properly acknowledging the need to protect national security and other public policy goals (and thus providing the relevant Executive Branch agencies notice and an opportunity to review requests for approval through the Team Telecom process), the FCC seems favorably inclined, and certainly more so than ever before, to permit increased foreign investment in broadcasting.