T-Mobile, Comcast, NAB Support FCC Foreign Ownership Changes
The FCC needs to update and streamline its rules on foreign ownership of communications companies, NAB, Comcast, T-Mobile, Nexstar and 21st Century Fox said in comments filed in docket 15-236 by Monday's deadline. Though some offered opposing suggestions for how the commission's foreign ownership regulations should change, they all agreed the FCC's current systems for measuring and limiting foreign ownership need to be fixed. The FCC's existing policies for public companies are “complex and unclear” and require gathering “voluminous, difficult-to-obtain information about de minimus [sic] shareholders and entities remote in the ownership chain; and result in significant expense on licensees and the Commission,” T-Mobile said. “This process can discourage foreign investment.”
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The NPRM the companies commented on examined loosening foreign ownership restrictions on broadcasters and changing the way the commission gauges foreign ownership. The NPRM was partially a reaction to problems uncovered by Pandora's application to buy a terrestrial radio station. Since Pandora was widely owned by funds and investors who don't have to disclose their identities under SEC rules, its percentage of foreign ownership couldn't be determined, and existing FCC policy required the commission to treat unknown investors as foreigners, complicating Pandora's transaction. “The procedures currently required of broadcasters are unduly burdensome and unnecessary,” NAB said.
NAB wants the FCC to fix the problem by permitting nonattributable foreign ownership in broadcasters of up to 49.99 percent without prior commission approval, and allowing up to 100 percent aggregate foreign ownership of broadcasters. The FCC should also be explicit and detailed with guidance about how it will review foreign ownership applications, NAB said. “A more clearly defined review and approval process will provide licensees greater transparency and predictability,” NAB said.
With so many competing media options, the rationale for the FCC to limit foreign ownership in broadcasting no longer applies, NAB said. The role of such rules to “control the ability of foreign entities to disseminate programming in the United States has been extremely diluted,” NAB said. “Even in the context of revised foreign ownership rules, the Commission and Executive Branch agencies will retain the ability to evaluate transactions and protect against security threats,” NAB said. Nexstar also backed streamlined foreign ownership rules.
While T-Mobile agreed with the thrust of the FCC's NPRM, it said simpler steps than those suggested by the FCC could be taken to streamline the way the commission gauges foreign ownership. “The Commission should establish a rebuttable presumption that shareholders holding interests of five percent or less in a public company in the ownership chain do not raise public interest concerns,” T-Mobile said. “There is no need for a fact-intensive inquiry into a public company’s five-percent-or-less shareholders.” The FCC should “recognize that shareholders holding interests of five percent or less in a public company cannot influence the decisions of the company” instead of adopting “highly detailed” methodologies for determining ownership, T-Mobile said.
These changes “would serve the public interest by promoting additional investment in the broadcast sector,” and assist all publicly traded communications companies, 21st Century Fox said. Public company shares “increasingly are bought and sold as part of a global stock market,” it said.
Comcast “strongly” supports an FCC proposal in the NPRM to allow licensees owned by U.S. public companies to “rely solely on information that is known or reasonably should be known to the public company” to determine if the licensee is in compliance with foreign ownership rules, Comcast said in its comments. The FCC shouldn't “impose any specific methodology” on how companies should analyze the available information about their investors, Comcast said.