Foreign Ownership NPRM Broadly Supported at FCC
A draft NPRM on relaxing foreign ownership rules (see 1510010042) is expected to be approved at Thursday’s FCC meeting, and it could be a unanimous vote, agency and industry officials told us Monday. The NPRM seeks comment on rule changes that would apply largely to situations involving foreign ownership of broadcasters, but some that also apply to common carriers, an agency official said. Relaxation of rules making it difficult for foreign investment in broadcasting was spoken of favorably in blog posts from Commissioner Mike O'Rielly and Chairman Tom Wheeler (here and here) in recent months, and previous efforts to relax the rules met no opposition, broadcast attorneys said. The proposals in the NPRM are widely supported by broadcasters, industry attorneys said.
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The item would seek comment on changing the way foreign ownership of broadcasters is treated by the FCC to make it more similar to how it's handled for other communications industries, an agency official said. The process for common-carrier deals involving foreign ownership was streamlined in 2013, and the NPRM seeks comment on applying those same changes to foreign ownership in broadcasting, FCC officials said. “The proposed rules will update the filing and review process -- all so it is better adapted to the current business environment -- while at the same time preserving the Commission’s case-by-case public interest review and national security protections,” said Wheeler in a blog post on the proposed rules. The agency had no immediate comment Monday.
The item would seek comment on rule changes to address the situation confronted by Pandora during its attempt to buy KXMZ(FM) Box Elder, South Dakota (see 1506020035), FCC officials told us. Some of Pandora’s stock is owned by investment entities that aren’t required by the SEC to disclose their investors' full names and identities, and though Pandora and others argued that other evidence showed that most of these investors were likely not foreign nationals, FCC rules required that investors whose identities couldn’t be determined to be treated as foreign for the purposes of determining the degree to which Pandora is foreign owned. The NPRM would seek comment on changing the way the FCC determines foreign ownership to prevent that from recurring, and on applying those changes to broadcasters and carriers, said a commission official.
The rules that tripped up Pandora are largely seen as out of date, Multicultural Media Telecom and Internet Council Senior Adviser David Honig told us. Honig supports relaxed foreign ownership rules because they make it easier for new industry entrants to get access to capital, he said.