COMMISSIONER AJIT PAI
Review of Foreign Ownership Policies for Common Carrier and Aeronautical Radio Licensees
under Section 310(b)(4) of the Communications Act of 1934, as Amended
, IB Docket No. 11-133.
As today’s item observes, “foreign investment has been . . . an important source of financing for
U.S. telecommunications companies, fostering technical innovation, economic growth and job creation.”1
We are lucky to have this inflow of capital, for it is a truth universally acknowledged that constructing
next-generation networks requires possession of a good fortune.2 In 2011, for example, wireless
companies poured over $25 billion into building and upgrading their networks.3
This makes it critical that the United States remain the most attractive place in the world for
investment in the communications industry. By reducing regulatory costs and burdens for common
carrier radio station licensees, the measures contained in this Second Report and Order
will help us
achieve that goal, and I am therefore pleased to support it.
But today’s effort cannot be a coda. When it comes to foreign investment, one aspect of the
Commission’s policies still demands reexamination and revision. Currently, we have a de facto
any foreign investment in a U.S. broadcast holding company that exceeds a 25 percent benchmark. Under
our rules, then, a foreign company can indirectly hold more than a quarter share in our nation’s largest
cable operators, cable programmers, wireline carriers, wireless carriers, Internet backbone providers, and
satellite video providers. Yet that company cannot own a similar interest in a single AM radio station in a
small, rural town. As I have pointed out before, this makes no sense.4 It is long past time for us to level
the regulatory playing field.
Foreign investment can pave the way for growth and innovation in broadcasting, just as it has
done for other segments of the communications industry. That’s why the Coalition for Broadcast
Investment asked the Commission last year to modernize our current policy and evaluate foreign
investment on a case-by-case basis. In February, the Media Bureau put the Coalition’s proposal out for
comment. We received the first round of feedback on Monday. Even at this early stage, the support for
permitting additional foreign investment is overwhelming.
It might not be a surprise that industry groups, such as the National Association of Broadcasters,
support these investments. But it is notable that at least thirty-one national minority and civil rights
organizations do too, including the League of United Latin American Citizens, the Rainbow PUSH
Coalition, the National Black Caucus of State Legislators, the Asian American Chamber of Commerce,
and the Minority Media and Telecommunications Council. As these groups put it, “To reverse the decline
in minority broadcast ownership, one of the most significant steps the Commission could take is to relax
its strict application of Section 310(b)(4) of the Communications Act . . . . By relaxing its restrictions on
1 Second Report and Order
, para. 3.
. Jane Austen, Pride and Prejudice
3 Implementation of Section 6002(b) of the Omnibus Budget Reconciliation Act of 1993, Annual Report and Analysis
of Competitive Market Conditions With Respect to Mobile Wireless, including Commercial Mobile Services
Docket No. 11-186, Sixteenth Report, FCC 13-34, at Table 33 (rel. Mar. 19, 2013).
., Remarks of Commissioner Ajit Pai before the NAB Radio Show at 5–6 (Sept. 19, 2012), available at
; Statement of Commissioner Ajit Pai on Modernizing Approach to Foreign Investment in
Broadcast Stations (Feb. 26, 2013), available at http://go.usa.gov/TjTC
; Statement of Commissioner Ajit Pai,
Hearing Before the United States Senate Committee on Commerce, Science, and Transportation, “Oversight of the
Federal Communications Commission” at 9 (Mar. 12, 2013), available at http://go.usa.gov/TjTW
foreign investment in broadcasting, the Commission would greatly assist minority broadcasters whose
survival depends on their ability to grow domestically and internationally.”
The comment cycle on the Coalition’s proposal will end on April 30, and I hope that the
Commission will take action soon thereafter. By ending our anachronistic approach to foreign
investment, we can bring new vitality to the broadcasting industry. We can increase access to capital.
And we can help boost minority ownership.
In closing, I would like to thank the staff of the International Bureau for their work on today’s
item and for their ongoing efforts to review foreign ownership applications. In particular, the
Commission’s long-time foreign ownership expert, Susan O’Connell, merits special recognition. Much
of today’s item reflects the knowledge and wisdom that Susan has developed through her years of
experience with these issues.