Foreign Ownership of US Broadcast Stations Suddenly the Rage? – FCC Seeks Comments on Two Proposals for Alien Ownership to Exceed 25%, Including One for 100% Australian Ownership

In the last two days, the FCC has asked for public comment on two proposals for foreign ownership of US broadcast stations where that ownership would exceed 25% of the company – a limit that has for decades been seen as the upper end of ownership by foreign nationals.  While the FCC three years ago said that they would consider such ownership on a case by case basis (see our article here), up until this week, the FCC had considered only one case under this new flexible policy – and that was the case of Pandora, where the FCC took over a year to approve their acquisition of a broadcast station – and Pandora didn’t even think that their foreign ownership exceeded the 25% threshold, but they could not prove it because of the difficulty of assessing the citizenship of public companies (see our article here on the filing of the Pandora petition).  Now, the FCC seeks comments on two cases, one where an Australian husband and wife team seek to acquire 100% ownership of companies owning 29 radio and TV stations in Alaska, Arkansas and Texas.  The second involves Univision, which asks for FCC approval for foreign ownership of up to 49% of its stock, as it plans a public offering which would also involve the conversion to stock of warrants held by a Mexican company that already has a stake in the company.

While the FCC last year asked for comments on adopting new processing rules for these kinds of requests – especially those involving public companies – no order has come out of the FCC on that proceeding yet (see our summary here).  Last month, the FCC did adopt some new procedures for the streamlining of the consideration of foreign ownership requests for all services regulated by the FCC, not just broadcasting, but that proceeding did not deal with the substantive issues surrounding foreign ownership, but instead with the process by which the FCC interacts with other government agencies in assessing the national security concerns with foreign ownership of communications properties.  With this background, does the release of these two requests for comment signal any movement from the FCC on foreign ownership issues?

Perhaps it does.  In the rulemaking begun last year to further explore liberalizing the procedures by which non-US citizens could acquire broadcast stations, there were surprisingly few comments that in any way expressed concerns about the FCC’s proposals.  These proposals included limiting the need to track the nationality of non-attributable owners, allowing foreign owners who are approved as shareholders to increase to 49% ownership without additional approval (or if approved in a controlling role, to increase their ownership to 100%), and looking at ways to make the determination of the nationality of owners easier, particularly for public companies.  For instance, the FCC might allow applicants to rely on the residence of the shareholder, without having to ask each individual their citizenship and without having to assume that all non-responding shareholders are foreign owners, as is technically required under 40-year old unpublished FCC guidelines.  Perhaps these cases will give the FCC further evidence on some of the issues raised in its outstanding rulemaking proceeding, so that it can bring that proceeding to a close, and clarify the ability of foreign citizens to invest in, and even own, US broadcast properties.