Pandora Asks FCC To Allow KXMZ Purchase Despite Inability To Prove Foreign Ownership Cap Compliance
June 30, 2014 at 3:59 AM (PT)
PANDORA RADIO, LLC has filed a Petition for Declaratory Ruling asking the FCC to declare the company eligible to buy Top 40 KXMZ (HITS 102.7)/BOX ELDER-RAPID CITY, SD from CONNOISSEUR MEDIA LICENSES, LLC despite the "inability of the applicant to determine the identity and alien status of a substantial number of its shareholders."
PANDORA, the customizable streaming music service which filed to buy the terrestrial radio station last year, was challenged by ASCAP for possibly exceeding the 25% foreign investment cap, described by PANDORA itself as "widely dispersed, indirect, and non-controlling foreign investment." The company insists in its petition that it "complies with the 25% indirect foreign ownership benchmark" but "cannot prove this in a manner consistent with the guidance provided by the Commission’s Audio Division in this proceeding, which guidance primarily is based on a decades old Commission policy that is irreconcilable with the manner in which publicly traded securities are held and traded in the U.S. today." PANDORA cites SEC privacy regulations that "make it virtually impossible for publicly traded companies such as PANDORA to determine the identity, much less the alien status, of many of their shareholders -- often more than 50%. Further, the Commission requires broadcast licensees to treat all such unidentifiable shareholders as foreign even though most of these shareholders likely are not."
PANDORA's filing says that the company "has reasonable grounds to believe that U.S. entities own and vote more than 80%" of its shares and asks that "to the extent that the Commission requires PANDORA uniformly to treat unidentifiable shareholders as foreign... (that the FCC) permit PANDORA to be up to 100% beneficially owned by foreign entities and for foreign entities to hold up to 49.9% of the aggregate voting authority over PANDORA," which the company says would "prohibit foreign investors from acquiring voting control over PANDORA" and "better aligns the Commission’s foreign ownership limitations with other federal agency policies, such as the SEC’s shareholder privacy rules."
The controversial deal was put on hold by the Commission in JANUARY over the foreign ownership issue.