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Foreign Ownership Rules and Policies for Common Carrier, Aeronautical En Route
and Aeronautical Fixed Radio Station Licensees

Section 310 of the Communications Act of 1934, as amended (47 U.S.C. § 310(a), (b)) requires the Commission to review foreign investment in radio station licenses. This section imposes specific restrictions on who may hold certain types of radio station licenses. The provisions of Section 310 apply to applications for initial radio licenses, applications for assignments and transfers of control of radio licenses, and spectrum leasing arrangements under the Commission’s secondary market rules.

Section 310(a) prohibits a foreign government or its representative from holding any radio license. Section 310(b) contains specific restrictions on who can hold a broadcast, common carrier, or aeronautical radio station license. Sections 310(b)(1) and (b)(2) prohibit any alien or representative, and any foreign-organized corporation, respectively, from holding a broadcast, common carrier, aeronautical radio license. Section 310(b)(3) prohibits foreign individuals, governments, and corporations from owning more than twenty percent of the capital stock of a broadcast, common carrier, or aeronautical radio station licensee. Section 310(b)(4) establishes a twenty-five percent benchmark for investment by foreign individuals, governments, and corporations in U.S.-organized entities that directly or indirectly control a U.S. broadcast, common carrier, or aeronautical radio station licensee. The Commission may grant a request from a foreign individual, government, or entity to own, directly or indirectly, more than twenty-five percent (and up to one hundred percent) of the stock of a U.S.-organized entity that holds a controlling interest in a common carrier or aeronautical radio licensee, unless the Commission finds that such foreign ownership would not serve the public interest.

In its 2012 Foreign Ownership First Report and Order, the Commission determined that it would forbear from applying the foreign ownership limitations in section 310(b)(3) to the class of common carrier licensees in which the foreign investment is held in the licensee through U.S.-organized entities that do not control the licensee, to the extent the Commission determines such foreign ownership is consistent with the public interest under the policies and procedures the Commission has adopted for the public interest review of foreign ownership subject to section 310(b)(4). In its 2013 Foreign Ownership Second Report and Order, the Commission adopted rules codifying its existing requirement that common carrier licensees subject to section 310(b)(3) forbearance seek and obtain Commission prior approval before foreign ownership in the subject licensee exceeds twenty percent of its equity interests and/or twenty percent of its voting interests. The Commission similarly adopted a rule codifying its existing requirement that common carrier and aeronautical radio station licensees seek and obtain prior Commission approval of their U.S. parents’ foreign ownership under section 310(b)(4) before direct or indirect foreign ownership of their U.S. parent companies exceeds the twenty-five percent statutory benchmark.

Published: September 10, 2013 Updated: September 10, 2013
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