FCC announces case-by-case approach to possible increases in indirect foreign control of broadcast licensees.
Indirect alien control of U.S. broadcast stations, long thought a taboo, may be on the way to acceptance at the FCC. In a Declaratory Ruling, the Commission has announced that it will consider easing up on such indirect foreign ownership of U.S. stations. But exactly when any easing up will occur, and how much alien control the FCC will eventually permit, remains to be seen.
Section 310(b)(3) of the Communications Act requires that entities holding certain FCC-issued licenses (for broadcast and common carrier services and radios serving aircraft while en route) must be organized under U.S. law AND may have no more than 20% foreign ownership. By contrast, Section 310(b)(4) of the Act permits such licensees to be indirectly controlled by separate entities up to 25% of which is owned by alien interests. In other words, while the license holder itself cannot be more than 20% foreign-owned, up to 25% of its parent company may be owned by foreign individuals or companies (even if the parent, which must be a domestic U.S. entity, is a 100% owner of the licensee).
The convoluted structure of Section 310(b)(4) suggests that the Commission might be able to allow entities with more than 25% alien ownership to control such FCC licensees – as long as an appropriate public interest determination is made. Historically, though, the Commission has strictly adhered to the 25% benchmark: it has never made such a public interest determination and, consequently, it has effectively established 25% as a hard and fast maximum not to be exceeded.
But now the Commission says that, going forward, it will be more open-minded to – and is, indeed, effectively inviting proposals for – greater indirect foreign ownership and control of broadcast licensees.