FCC Approves Streamlining Of Broadcast Foreign Ownership Rules
September 29, 2016 at 10:49 AM (PT)
At its open meeting TODAY (9/29), the FCC passed the proposal for streamlining its foreign ownership rules for broadcast stations.
The Commission approved the changes, which require that applicants with reportable foreign ownership to provide information on ownership, network operations, and related matters at the time they file their applications, rather than making the Executive Branch seek out the information itself; require a certification for all applicants, with or without foreign ownership, to certify to certain mitigation provisions when they file their applications; and set a 90-day time frame for Executive Branch review, with an additional one-time 90-day extension "in rare circumstances," by a unanimous voice vote. The new rules are similar to those already in effect for common carrier wireless licensees.
The approval came after the controversial set-top box proposal was dropped from the agenda at the last minute.
Chairman TOM WHEELER said, "Today’s rules will update the procedures for requesting approval of foreign ownership of broadcast licensees with specific rules that incorporate the same streamlined procedures used for common carrier wireless licensees, with certain exceptions and clarifications. They will modernize our processes so they are better adapted to the current business environment, which has obviously evolved over the
"In addition, the item recognizes the difficulty U.S. public companies face in ascertaining their foreign ownership, and establishes a framework for a publicly traded broadcast or common carrier licensee or controlling U.S. parent to ascertain its foreign ownership levels using information that is “known or reasonably should be known” to the company in the ordinary course of business, thereby eliminating the need for shareholder surveys.
"Taken together, these reforms will better harmonize the process with the one established in 2013 for other licensees, provide greater certainty for stakeholders, potentially enable greater investment in broadcaster licensees, and update the compliance methodology to better reflect the current marketplace. Special thanks to Commissioner O’RIELLY for his leadership in highlighting this issue."
Commissioner MIGNON L. CLYBURN said, "As a former owner of a small media outlet, I know all too well the importance of adequate capital to enable operations, support new and innovative service offerings, and provide value to customers. Today’s order recognizes these benefits by extending in large part to the broadcast industry, the streamlined rules and modified procedures the Commission adopted three years ago for foreign ownership reviews of common carrier licensees. We address head-on the complexities and difficulties faced by publicly-traded broadcast companies when attempting to ascertain the extent of foreign ownership. And we provide more efficient approaches, offer greater transparency and predictability, and enhance access to capital opportunities for broadcasters, while reducing regulatory burdens and costs.
"The leadership and staff of the International Bureau and Media Bureau are to be commended because this Order is a praiseworthy example of how the Commission unleashes opportunities by harmonizing and streamlining rules to facilitate capital investment as we protect important public policy goals."
Commissioner JESSICA ROSENWORCEL said, "today we update our policies by extending to broadcast licensees the same streamlined rules and procedures applicable to common carrier licensees under the law. We clarify our rules for foreign investment across the board. We also improve our method for counting foreign ownership in both common carriers and broadcasters. These actions remove barriers for investment and provide clarity for broadcasters seeking support for new technologies and new ways to reach the communities they serve. This effort has my full support."
Commissioner AJIT PAI said, "These same streamlined procedures have worked well in the
common carrier context, and I’m confident they’ll work well in the broadcast context. They’ll make it easier for broadcasters to access capital while at the same time still ensuring that any foreign ownership above the 25% benchmark set forth in Section 310(b)(4) of the Communications Act does not compromise our national security or any other public interest. They will also promote regulatory parity and ensure that different sectors of the communications industry can compete for investment on a level playing field.... I am... optimistic that this Order will reduce the regulatory burdens placed on public companies and make it easier for them to comply with our rules. At the end of the day, the Commission’s rules in this area need to strike a balance. On the one hand, we should promote investment in the United States and make it easier for communications companies to access capital. But on the other hand, we must ensure that any specific foreign investment in this sector of our economy is in the public interest. Because this Order generally strikes the right balance, I am pleased to support it and would like to thank the staff of the International Bureau and the Media Bureau for their hard work in this proceeding."
And Commissioner MICHAEL O’RIELLY said, "Quite simply, today’s order is a helpful step, as the changes are likely to produce significant benefits without jeopardizing national security. By allowing broadcasters to follow the streamlined process available to common carrier licensees, we facilitate new avenues of capital that will help stations compete in today’s highly competitive video marketplace..... There are some things, however, that I would have done things differently. For instance, I hoped that the item would raise the overall reporting threshold. Raising this level, which triggers the time-consuming review process, would reduce costs on industry participants, align the U.S. with nations that
permit higher levels of foreign investment, and reduce the efforts of other countries to restrict U.S. investment based on our ownership restrictions. While we do not do this today, I am pleased that the item states that we may pursue such measures in the future.
"In that regard, the Commission must finish its proceeding on Team Telecom to truly streamline its foreign ownership review. We can take all the steps we want, but if Team Telecom can hold up applications for years in a regulatory abyss, all of these improvements are of little value. Failing to identify the concerns, hiding behind an opaque structure and delaying or refusing to conclude a review, as Team Telecom does right now, is incomprehensible. That docket is nearly universally filled with filings indicating that drastic improvements to Team Telecom are needed, and it needs to be resolved in the very near term."
NAB OK With It, Too
NAB Executive Vice President of Communications DENNIS WHARTON said, "The FCC has taken an important step in allowing broadcasters to more freely and fairly compete for investment dollars. This order extends to broadcasters the same application and approval process that has been open to our competitors for years, and establishes more streamlined ways for radio and TV stations to comply with foreign ownership limits. NAB applauds the Commission’s decision and looks forward to greater investment in local sources of news and programming."