FCC Seeks to Codify Foreign Ownership Policy

At its meeting on April 28th, the Commission is proposing to codify its foreign ownership rules. The Communications Act § 310(b) requires the FCC to approve foreign ownership or investment in communications systems, especially broadcast stations.  The FCC has traditionally examined foreign ownership issues on a case-by-case basis.   It now feels that the policies should be codified in specific rules.

“While the Commission encourages foreign investment in licensees subject to section 310(b) of the Communications Act of 1934, as amended (the Act), certain foreign investment may raise national security risks and other concerns. To account for increasingly complex foreign ownership structures over the past decade, the Commission has adopted certain practices but has never codified these legal requirements into the rules.”

Specifically, the proceeding would:

• Propose to codify existing policy regarding which entity is the controlling U.S. parent;

• Propose to codify the Commission’s advance approval policy regarding certain deemed voting interests;

• Propose to require identification of trusts and trustees;

• Propose to extend the remedial procedures and methodology to privately held companies;

• Propose to add requirements regarding the contents of remedial petitions;

• Seek comment on requiring the filing of amendments as a complete restatement to petitions for declaratory ruling;

• Propose to clarify U.S. residency requirements; and

• Seek comment on other potential opportunities to alleviate unnecessary regulatory burdens in the context of our foreign ownership review under section 310(b) of the Act.

With regard to broadcast licensees only:

• Seek comment on how the Commission should process applications filed by a broadcast licensee during the pendency of a remedial petition for declaratory ruling under section 310(b); and

• Seek comment on other foreign ownership considerations related to the processing of Noncommercial Educational (NCE) and low-power FM (LPFM) stations.

If the FCC moves to relax some of its ownership rules, that may help stimulate investment in broadcasting.  This could include foreign investment, especially for stations along the border with Canada.  So, this issue may be very important for New York stations.

You can see the FCC’s proposed rules here.