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File pnmc5021 (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ************************************************************************* Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) Amendment of Parts 20, 21, 22, 24, 26, 80, ) 87, 90, 100, and 101 of the Commission's Rules ) To Implement Section 403(k) of the ) Telecommunications Act of 1996 ) ) (Citizenship Requirements) ) ORDER Adopted: September 27, 1996 ; Released: October 9, 1996 By the Commission: I. INTRODUCTION 1. On February 8, 1996, the Telecommunications Act of 1996 became law. Section 403(k) of the Telecom Act amends sections 310(b)(3) and (4) of the Communications Act of 1934 to remove the restrictions against corporate licensees having alien officers or directors. In this order, we amend certain Commission rules relating to the citizenship requirements for licenses for broadcast, common carrier, aeronautical en route, and aeronautical fixed radio stations to conform to the amended statutory language. To further implement the statutory change, we also modify in part certain policies treating certain alien partners as the equivalent of alien officers and directors set forth in Request for Declaratory Ruling Concerning the Citizenship Requirements of Section 310(b)(3) and (4) of the Communications Act of 1934, as amended, 103 FCC 2d 511 (1985), recon. in part, 1 FCC Rcd 12 (1986) (Wilner and Scheiner) and in Market Entry and Regulation of Foreign-affiliated Entities, 11 FCC Rcd 3873 (1995) (Foreign Carrier Entry Order). II. BACKGROUND 2. Section 310(b) of the Communications Act applies to licenses for broadcast, common carrier, aeronautical en route, and aeronautical fixed radio stations. Prior to enactment of the Telecom Act, section 310(b)(3) precluded a license being granted to or held by any corporation with any alien officer or director, or by a corporation in which more than one-fifth of the capital stock was owned or voted by aliens. The prior version of section 310(b)(4), which applies where another corporation directly or indirectly controls a corporate licensee, provided that the Commission may deny an application or revoke a license where any officer of the parent corporation is an alien, more than one-fourth of its directors are aliens, or more than one-fourth of the capital stock is owned or voted by aliens, if it finds that such denial or revocation serves the public interest. 3. To implement the statute, the Commission included the statutory restrictions on alien ownership set forth in sections 310(b)(3) and (4) in certain rules that define the eligibility criteria for holding licenses for certain types of broadcast, common carrier, and aeronautical stations. In addition, various other Commission actions, while not codified, also effectuate these statutory provisions. In Wilner and Scheiner we issued a declaratory ruling prescribing the manner in which sections 310(b)(3) and (4) apply to corporate and partnership interests. In doing so, we advised that the statutory restrictions governing foreign officers or directors apply to partners in a partnership without any limited partners, to general partners in a limited partnership, and to non-insulated limited partners. 103 FCC 2d at 520 n.43. And, in our Foreign Carrier Entry Order, 11 FCC Rcd at 3941-56  179-219, we adopted an "effective competitive opportunities" test to be considered, along with additional public interest factors, in deciding whether it is in the public interest to permit alien ownership of licensees of common carrier radio facilities in excess of the statutory benchmarks set forth in section 310(b)(4). We identified several factors as being germane to this analysis, including "the extent of alien participation in the applicant's parent corporation (in particular the presence of alien officers and directors in excess of the statutory benchmarks)." Id. at 3955  216. 4. Section 403 of the Telecom Act provides for the elimination of unnecessary Commission regulations and functions. In this context, section 403(k) amends sections 310(b)(3) and (4) to remove the restriction on a broadcast, common carrier, or aeronautical license being held by or granted to a corporation having alien officers or directors. The restrictions on how much of the capital stock may be owned or voted by aliens have not been changed. III. DISCUSSION 5. Current Commission rules that govern the licensing of commercial mobile radio services (Part 20), domestic public fixed radio services (Part 21), public mobile services (Part 22), narrowband and broadband personal communications services (Part 24), general wireless communications service (Part 26), stations in the maritime services (Part 80), aviation services (Part 87), private land mobile radio services (Part 90), direct broadcast satellite service (Part 100), and fixed microwave services (Part 101) incorporate verbatim the statutory restrictions on alien ownership embodied in sections 310(b)(3) and (4). Accordingly, as reflected in the attached Appendix, we amend the applicable rules that prescribe the citizenship requirements for licensees in these various communications services to eliminate the restrictions against corporations with alien officers or directors. For other services, where these restrictions are not codified in the rules, no changes to our rules are needed. 6. Consistent with the elimination of the restrictions on alien officers and directors of corporate licensees, we will also no longer accord any independent significance under the statute to positions held by aliens that may convey the power to manage the affairs of an unincorporated entity or to bind a partnership -- such as a general partner or a noninsulated limited partner. Our action in this regard does not alter our more general determination that, for purposes of ownership attribution in connection with the multiple ownership rules, general partners and noninsulated limited partners exercise powers and exert influence functionally equivalent to officers and directors in a corporation. Similarly, in applying the "effective competition opportunities" test that we adopted in the Foreign Carrier Entry Order, we will no longer consider the presence of alien officers and/or directors in the parent company of a common carrier licensee in determining, pursuant to section 310(b)(4), whether it serves the public interest to allow an alien entity or combination of entities to control more than 25 percent of the capital stock of a company that directly or indirectly controls a common carrier licensee. 7. In making these changes to our rules and policies, we emphasize that, since Congress has retained those portions of sections 310(b)(3) and (b)(4) that restrict alien ownership and/or voting interests, our action does not affect these restrictions, which we have previously held to encompass partnership and other noncorporate interests. Wilner and Scheiner, 103 FCC 2d at 516  10. Thus, in calculating whether aliens exceed the ownership and voting benchmarks set forth in these statutory provisions, we will continue to follow the guidelines specified in Wilner and Scheiner that relate to the computation of such interests. IV. ADMINISTRATIVE MATTERS 8. The rule changes that we adopt today simply conform our rules and policies to section 403(k) of the Telecom Act. These changes thus merely implement the new Congressional directive to remove the restriction that no broadcast, common carrier, or aeronautical license may be held by or granted to a corporation having alien officers or directors. Accordingly, we find for good cause that compliance with the general notice and comment provisions of the Administrative Procedure Act is unnecessary. See 5 U.S.C.  553(b)(B). For similar reasons, and because the changes ease restrictions on alien participation, compliance with the effective date provision of the Administrative Procedure Act also is unnecessary. 5 U.S.C.  553(d). 9. ACCORDINGLY, IT IS ORDERED, That, pursuant to Sections 154(i) and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i) and 303(r), Parts 20, 21, 22, 24, 26, 80, 87, 90, 100 and 101 of the Commission's Rules, 47 C.F.R. Parts 20, 21, 22, 24, 26, 80, 87, 90, 100, and 101 ARE AMENDED as set forth in the Appendix, EFFECTIVE upon publication in the Federal Register. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary APPENDIX Rule Changes Parts 20, 21, 22, 24, 26, 80, 87, 90, 100 and 101 of Title 47 of the Code of Federal Regulations are amended as follows: PART 20 -- COMMERCIAL MOBILE RADIO SERVICES 1. The authority citation for Part 20 continues to read as follows: AUTHORITY: Secs. 4, 303, and 332. 48 Stat. 1066, 1082, as amended; 47 U.S.C. 154, 303, and 332, unless otherwise noted. 2. Section 20.5 is amended by revising paragraphs (a)(4) and (a)(5) to read as follows:  20.5 Citizenship. (a) * * * (4) Any corporation of which more than one-fifth of the capital stock is owned of record or voted by aliens or their representatives or by a foreign government or representative thereof or by any corporation organized under the laws of a foreign country; or (5) Any corporation directly or indirectly controlled by any other corporation of which more than one-fourth of the capital stock is owned of record or voted by aliens, their representatives, or by a foreign government or representative thereof, or by any corporation organized under the laws of a foreign country, if the Commission finds that the public interest will be served by the refusal or revocation of such license. * * * * * PART 21 -- DOMESTIC PUBLIC FIXED RADIO SERVICES 3. The authority citation for Part 21 continues to read as follows: AUTHORITY: Secs. 1, 2, 4, 201-205, 208, 215, 218, 303, 307, 313, 403, 404, 410, 602, 48 Stat. as amended, 1064, 1066, 1070-1073, 1076, 1077, 1080, 1082, 1083, 1087, 1094, 1098, 1102; 47 U.S.C. 151, 154, 201-205, 208, 215, 218, 303, 307, 313, 314, 403, 404, 602; 47 U.S.C. 552, 554. 4. Section 21.4 is amended by removing paragraphs (d) and (f), and redesignating paragraphs (e) and (g) as paragraphs (d) and (e), respectively. PART 22 -- PUBLIC MOBILE SERVICES 5. The authority citation for Part 22 continues to read as follows: AUTHORITY: 47 U.S.C. 154, 303, and 332, unless otherwise noted. 6. Section 22.5 is amended by revising paragraphs (b)(3) and (b)(4) to read as follows:  22.5 Citizenship. * * * * * (b) * * * (3) Any corporation of which more than one-fifth of the capital stock is owned of record or voted by aliens or their representatives or by a foreign government or representative thereof, or by any corporation organized under the laws of a foreign country; (4) Any corporation directly or indirectly controlled by any other corporation of which more than one-fourth of the capital stock is owned of record or voted by aliens, their representatives, or by a foreign government or representative thereof, or by any corporation organized under the laws of a foreign country, if the FCC finds that the public interest will be served by the refusal or revocation of such license. PART 24 -- PERSONAL COMMUNICATIONS SERVICES 7. The authority citation for Part 24 continues to read as follows: AUTHORITY: 47 U.S.C. 154, 301, 302, 303, 309, and 332, unless otherwise noted. 8. Section 24.404 is amended by revising paragraphs (b)(3) and (b)(4) to read as follows:  24.404 Eligibility. * * * * * (b) * * * (3) Any corporation of which more than one-fifth of the capital stock is owned of record or voted by aliens or their representatives or by a foreign government or representative thereof or any corporation organized under the laws of a foreign country. (4) Any corporation directly or indirectly controlled by any other corporation of which more than one-fourth of the capital stock is owned of record or voted by aliens, their representatives, or by a foreign government or representative thereof, or by any corporation organized under the laws of a foreign country, if the Commission finds that the public interest will be served by the refusal or revocation of such license. A Narrowband PCS authorization to provide Private Mobile Radio Service may not be granted to or held by a foreign government or a representative thereof. 9. Section 24.804 is amended by revising paragraphs (b)(3) and (b)(4) to read as follows:  24.804 Eligibility. * * * * * (b) * * * (3) Any corporation of which more than one-fifth of the capital stock is owned of record or voted by aliens or their representatives or by a foreign government or representative thereof or any corporation organized under the laws of a foreign country. (4) Any corporation directly or indirectly controlled by any other corporation of which more than one-fourth of the capital stock is owned of record or voted by aliens, their representatives, or by a foreign government or representative thereof, or by any corporation organized under the laws of a foreign country, if the Commission finds that the public interest will be served by the refusal or revocation of such license. * * * * * PART 26 -- GENERAL WIRELESS COMMUNICATIONS SERVICE 10. The authority citation for Part 26 continues to read as follows: AUTHORITY: 47 U.S.C. Sections 154, 301, 302, 303, 309 and 332, unless otherwise noted. 11. Section 26.302 is amended by revising paragraphs (b)(3) and (b)(4) as follows:  26.302 Eligibility. * * * * * (b) * * * (3) Any corporation of which more than one-fifth of the capital stock is owned of record or voted by aliens or their representatives or by a foreign government or representative thereof or any corporation organized under the laws of a foreign country. (4) Any corporation directly or indirectly controlled by any other corporation of which more than one-fourth of the capital stock is owned of record or voted by aliens, their representatives, or by a foreign government or representative thereof, or by any corporation organized under the laws of a foreign country, if the Commission finds that the public interest will be served by the refusal or revocation of such license. * * * * * PART 80 -- STATIONS IN THE MARITIME SERVICES 12. The authority citation for Part 80 continues to read as follows: AUTHORITY: Secs. 4, 303, 48 Stat. 1066, 1082, as amended; 47 U.S.C. 154, 303, unless otherwise noted. Interpret or apply 48 Stat. 1064-1068, 1081-1105, as amended; 47 U.S.C. 151-155, 301-609; 3 UST 3450, 3 UST 4726, 12 UST 2377. 13. Section 80.15 is amended by removing paragraphs (b)(4) and (b)(6), and redesignating paragraphs (b)(5) and (b)(7) as paragraphs (b)(4) and (b)(5), respectively. PART 87 -- AVIATION SERVICES 14. The authority citation for Part 87 continues to read as follows: AUTHORITY: 48 Stat. 1066, 1082, as amended; 47 U.S.C. 154, 303, unless otherwise noted. Interpret or apply 48 Stat. 1064-1068, 1081-1105, as amended; 47 U.S.C. 151-156, 301-609. 15. Section 87.19 is amended by removing paragraph (b)(3) and by redesignating paragraphs (b)(4) and (b)(5) as paragraphs (b)(3) and (b)(4), respectively. PART 90 -- PRIVATE LAND MOBILE RADIO SERVICES 16. The authority citation for Part 90 continues to read as follows: AUTHORITY: Sections 4, 303, 309, and 332, 48 Stat. 1066, 1082, as amended; 47 U.S.C. ss 154, 303, 309, and 332, unless otherwise noted. 17. Section 90.115 is amended by revising paragraphs (b)(3) and (b)(4) to read as follows:  90.115 Foreign government and alien eligibility. * * * * * (b) * * * (3) A corporation of which more than one-fifth of the capital stock is owned of record or voted by aliens or their representatives or by a foreign government or representative thereof, or by any corporation organized under the laws of a foreign country; (4) A corporation directly or indirectly controlled by any other corporation of which more than one-fourth of the capital stock is owned of record or voted by aliens, their representatives, or by a foreign government or representative thereof, or by any corporation organized under the laws of a foreign country, if the Commission finds that the public interest will be served by the refusal or revocation of such license. PART 100 -- DIRECT BROADCAST SATELLITE SERVICE 18. The authority citation for Part 100 continues to read as follows: AUTHORITY: Secs. 4, 303, 48 Stat. 1066, 1082, as amended; 47 U.S.C. 154, 303, 554. 19. Section 100.11 is revised by removing paragraphs (d) and (f), and redesignating paragraphs (e) and (g) as paragraphs (d) and (e), respectively. PART 101 -- FIXED MICROWAVE SERVICES 20. The authority citation for Part 101 continues to read as follows: AUTHORITY: 47 U.S.C. Secs. 154, 303, unless otherwise noted. 21. Section 101.7 is revised by removing paragraphs (b)(3) and (b)(5), and redesignating paragraphs (b)(4) and (b)(6) as (b)(3) and (b)(4), respectively.