Unanimous Approval Likely for FCC Foreign-Ownership Clarification
An FCC draft order that would clarify and codify the agency's policies related to foreign ownership of broadcasters and common carriers is expected to be unanimously approved at Thursday’s open meeting, industry officials told us. The draft item is seen as noncontroversial and has drawn no ex parte filings in docket 25-149.
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“As foreign ownership structures have become more complicated, the Commission has developed policies and precedent for implementing its Section 310(b) rules to assess foreign ownership investments,” said an FCC fact sheet on the draft item. “These policies and practices now warrant clarification or inclusion in the rules.”
The FCC’s rules allow foreign entities to own more than 25% of a company that controls a broadcaster or common carrier if the agency determines that it's in the public interest. The draft order concerns the processes surrounding filing the petitions for declaratory ruling that lead to that public interest determination. “These clarifications will assist petitioners in providing the relevant information in their initial filings, minimize the need for supplemental filings, and promote efficient and shorter processing times,” said the fact sheet. The order stems from an April NPRM that was unanimously approved and also drew little industry opposition.
In a blog post earlier this month, Wilkins Barker attorneys David Oxenford and Keenan Adamchak wrote that the draft order “tries to provide a clearer statement of the Commission’s policies and procedures by embodying them in actual FCC rules.”
For example, the item would codify the agency’s existing policy on how parent companies, trusts and trustees are identified in petitions for declaratory ruling, as well as how the FCC weighs limited partnerships and “deemed voting interest” when making a foreign-ownership determination. It would also clarify that the FCC won’t weigh whether a foreign investor has U.S. residency in making its public interest determination. “We find that requiring a foreign investor to maintain U.S. residency would be antithetical to the Commission’s policy of allowing certain levels of foreign ownership that are not contrary to the public interest,” the draft says.
In addition, the order would extend to privately held companies the agency’s practice of allowing remedial petitions for declaratory ruling for companies that have inadvertently fallen out of compliance with the foreign-ownership rules due to complex ownership structures that include equity funds. Currently, the remedial filing process is available only to public companies. Private companies have told the FCC that they have “experienced difficulty in controlling or preventing changes in these funds, even when the entities are privately held.” Without allowing the remedial filings, those companies could be subject to enforcement proceedings for inadvertently going over the foreign-ownership limits without FCC approval, the draft item says.
The item would also codify the procedures for amending petitions for declaratory ruling and clarify foreign-ownership policies for noncommercial educational and low-power FM stations.