Genachowski Pulls Declaratory Ruling on Foreign Ownership Rules After Carriers Object
The FCC dropped from the Aug. 9 meeting agenda a controversial foreign ownership rule change opposed by Verizon Wireless, Vodafone and Telefonica Internacional USA. Chairman Julius Genachowski pulled an order and declaratory ruling on the International Bureau’s Foreign Ownership Guidelines and the application of section 310(b)(3) of the Communications Act to foreign ownership of common carrier and aeronautical licensees. The item had been circulated two weeks ago for a vote at the meeting.
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FCC legal advisors were briefed on the agenda late Wednesday. Commission officials said the item was yanked so commission staff could work out a solution with carriers and others in the wireless industry.
Verizon Executive Vice President Tom Tauke called FCC Chief of Staff Edward Lazarus Monday to complain about the rule change, said an ex parte filing (http://xrl.us/bk37s5). “In short, the Guidelines appear to establish a new approach to minority indirect investment that should not be adopted by the Commission,” Tauke said.
The U.S. affiliate of Spanish telecom giant Telefonica also weighed in this week, in a letter to the International Bureau (http://xrl.us/bk38x3). “We are concerned about the implications that the approval of these guidelines may have in terms of restrictions to foreign ownership in the U.S. market,” wrote Carlos Rodriguez, manager of regulatory affairs. “We have recalled previously in several instances the importance of the U.S. and the E.U. to have a leadership role in prompting relaxation of investment restrictions in other countries. We believe the measure under consideration at the August 9th meeting may send the wrong signal and create a bad precedent."
Ari Fitzgerald of Hogan Lovells and others representing Vodafone spoke with International Bureau officials and advisers to all four FCC commissioners to express the company’s concerns (http://xrl.us/bk382o). “In 1997, the United States and other [World Trade Organization] member countries committed to open to foreign investment their markets for basic telecommunications services, including common carrier wireless services,” the filing said. “The United States’ WTO commitments do not include any limitation on indirect foreign investment in common carrier licensees. Indeed, under the United States’ WTO commitments, indirect foreign investment in U.S. common carriers can be as high as 100 percent. ... Unfortunately, the Guidelines’ interpretation of section 310(b)(3) is incompatible with those commitments.”
FCC legal advisors were briefed on the agenda late Wednesday. Commission officials said the item was yanked so commission staff could work out a solution with carriers and others in the wireless industry.