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FCC Clarifies Policy For Foreign Investment In Broadcast Licensees

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Released: November 14, 2013

Federal Communications Commission

FCC 13-150

Before the

Federal Communications Commission

Washington, D.C. 20554

In the Matter of
)
)

Commission Policies and Procedures Under
)
MB Docket No. 13-50
Section 310(b)(4) of the Communications Act,
)
Foreign Investment in Broadcast Licensees
)

DECLARATORY RULING

Adopted: November 14, 2013

Released: November 14, 2013

By the Commission: Chairman Wheeler and Commissioners Clyburn, Rosenworcel, Pai, and O’Rielly
issuing separate statements.

I.

INTRODUCTION

1.
This Declaratory Ruling issued pursuant to section 1.2 of the Commission’s rules1 is
intended to remove apparent uncertainty about the Commission’s policies and procedures for evaluating
potential foreign investment in broadcast licensees under section 310(b)(4) of the Communications Act of
1934, as amended (the “Act”).2 That section restricts foreign ownership or voting interests exceeding 25
percent of the capital stock in U.S.-organized entities that control broadcast (and certain other types of)
Commission licensees, when the Commission finds that the imposition of such a limitation is in the public
interest. As noted below, broadcasters, public interest groups, and others have expressed the view that it
would be in the public interest to increase access to capital and investment financing for the broadcast
sector. These parties assert that, as they read Commission precedent, the application of section 310(b)(4)
to broadcast licensees has restricted the flow of foreign capital to domestic broadcast licensees or to
entities interested in entering the broadcast industry. They assert that foreign sources of capital would be
available to broadcasters if section 310(b)(4) were not applied to block access to those sources. Some
parties further believe that the benefits of increased capital from foreign investors would assist, among
other beneficiaries, minorities, women, and small broadcast entities, for which access to capital is a
particular impediment to market entry. In light of these stated concerns, we believe it useful to articulate
and clarify the Commission’s policies and procedures in reviewing applications or proposed transactions
that propose foreign broadcast ownership that would exceed the 25 percent benchmark contained in
section 310(b)(4) and to assure the broadcast industry and potential foreign investors that the Commission
intends to consider such matters on a case-by-case basis.

II.

BACKGROUND

2.
The Act’s foreign ownership restrictions were originally conceived to address homeland
security interests during wartime. They were designed to protect the integrity of ship-to-shore and
governmental communications and thwart the airing of foreign propaganda on broadcast stations.3

1 47 C.F.R. § 1.2. See also 5 U.S.C § 554(e).
2 47 U.S.C. § 310(b)(4).
3 See, e.g., Radio Communications: Hearing on S. 3620 and S. 5334 Before the House Commerce Committee, 62nd
Cong 35-37 (Mar. 1, 1912) (adopting predecessor language to section 310). See also Fox Television Stations, Inc.,
10 FCC Rcd 8452 (1995) (“Fox I”); Wilner & Scheiner, Request for Declaratory Ruling Concerning the Citizenship
(continued….)
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Nevertheless, those statutory provisions have always provided the Commission with the discretion to
approve foreign ownership in broadcast licensees in excess of the 25 percent benchmark. Section 310
currently states in pertinent part:
(b) No broadcast or common carrier or aeronautical en route or aeronautical fixed radio station
license shall be granted to or held by – *** (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.4
3.
The Commission has traditionally viewed the 25 percent benchmark for foreign
ownership and voting interests in U.S.-organized entities that control broadcast licensees as the
presumptive limit consistent with the public interest.5 It has done so based on a determination that foreign
ownership of broadcast stations presents different questions from those raised by foreign ownership in
other types of radio spectrum licensees.6 The Commission’s approach to the benchmark for foreign
(Continued from previous page)
Requirements of Section 310(b)(3) and (4) of the Communications Act of 1934, 103 FCC 2d 511, 516-17 (stating
that “. . . Section 310(b) reflects the broader purpose of ‘safeguard[ing] the United States from foreign influence’ in
the field of broadcasting. The specific citizenship requirements governing positional, ownership and voting interests
reflect a deliberate judgment on the part of Congress as to the limitations necessary to prevent undue alien influence
in broadcasting.”) (1985) (“Wilner & Scheiner”); Request for Declaratory Ruling Concerning Section 310(a)(5) of
the Communications Act
, 67 FCC 2d 604 (1974) (the prior section 310(a)(5) is now section 310(b)(4)). See also
Letter from Mace Rosenstein and Gerard J. Waldron, Counsel for the Coalition for Broadcast Investment (“CBI”), to
Marlene H. Dortch, Secretary, Federal Communications Commission at 2 (Aug. 31, 2012) (“CBI Request”); Nexstar
Broadcasting, Inc. Comments at 2 (“Nexstar”).
4 47 U.S.C. § 310(b)(4). The officer and director thresholds originally contained in Section 310(b)(4) were
eliminated by Section 403(k) of the Telecommunications Act of 1996, P.L. No. 104-104, 110 Stat 56 (1996); see
also Implementation of Section 403(k) of the Telecommunications Act of 1996
(Citizenship Requirements), 61 FR
55579-01, Oct. 28, 1996 (FCC 96-396) (amending Commission rules, 47 C.F.R. Parts 20, 21, 22 and 101
(Communications common carriers, Radio); and 47 C.F.R. Parts 24, 26, 80, 87, 90 and 100 (Radio).
5 Traditionally, the Commission has considered the type of radio license at issue in assessing whether foreign
ownership in excess of the benchmark would serve the public interest. See, e.g., 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, Notice of Proposed Rulemaking, FCC 11-121, 26 FCC Rcd 11703,
11704 n.3 (2011) (“Foreign Ownership NPRM”) (noting that the Commission historically has recognized different
policy concerns for foreign ownership in the U.S.-organized parents of broadcast licensees under section 310(b)(4));
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, First Report and Order, FCC 12-
93, 27 FCC Rcd 9832, 9834 n.11 (2012) (same) (“Foreign Ownership First Report and Order”); 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, Second Report and Order, FCC 13-50, 28 FCC
Rcd 5741, 5742 n.4 (2013) (“Foreign Ownership Second Report and Order”), citing to Foreign Ownership NPRM
at 11704 n.3. For example, the Commission has noted common carrier radio licenses are passive in nature and
confer no control over the content of transmissions. Broadcast transmissions have been found to present additional
national security concerns because they implicate content. See, e.g., Foreign Ownership NPRM, 26 FCC Rcd at
11704 n.3, citing Cable & Wireless, Inc., Declaratory Ruling and Memorandum Opinion, Order, Authorization, and
Certificate, 10 FCC Rcd 13177, 13179, ¶ 18 (1995); Market Entry and Regulation of Foreign-Affiliated Entities,
Notice of Proposed Rule Making, 10 FCC Rcd 4844, 4852 n.19 and accompanying text (1995) (“Market Entry
NPRM
”).
6 Market Entry and Regulation of Foreign-Affiliated Entities, Report and Order, 11 FCC Rcd 3873, 3947 (1995)
(“Market Entry Order”) (Commission determination not to adopt an effective competitive opportunities (“ECO”)
approach for broadcast foreign ownership similar to that applied in common carrier section 310 evaluations). See
also supra
note 5.
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investments in broadcast licensees has reflected “heightened concern for foreign influence over or control
of [broadcast] licensees which exercise editorial discretion over the content of their transmissions.”7 Over
time, the Commission’s approach to foreign investment in the common carrier context has resulted in the
development of a body of precedent, rules, and procedures for transactions involving such carriers. The
Commission has not been presented with a similar number of applications in the broadcast sector and
therefore has not had the opportunity to develop its policies and procedures in this context.
4.
A number of diverse interested parties have asked the Commission to review its policies
and procedures regarding the assessment of applications or proposed transactions that would exceed the
25 percent threshold in section 310(b)(4) in the broadcast context. On August 31, 2012, the Coalition for
Broadcast Investment (“CBI”) filed a “Request for Clarification of the Commission’s Policies and
Procedures Under 47 U.S.C. § 310(b)(4).” Therein, CBI sought “clarification” that the Commission will
exercise its statutory discretion to “conduct a substantive, facts and circumstances evaluation of proposals
for foreign investment in excess of 25 percent in the parent company of a broadcast licensee.”8 On
February 26, 2013, the Media Bureau issued a public notice inviting comment on the CBI Request. The
Commission received nine comments and five reply comments, the majority of which support CBI’s
position.9
5.
CBI asserts that the Commission, for over 80 years, has failed to exercise its authority
and discretion to permit foreign ownership interests in entities that control the licensees of broadcast radio
or television stations in excess of the 25 percent benchmark.10 It is commenters’ view that the
Commission “maintains an irrebutable presumption” against relief from the 25 percent restriction, which
inhibits financial institutions and other investors from considering broadcast transactions where the 25
percent benchmark would be surpassed and frustrates the public interest.11 CBI contends that by
confirming its intention to exercise the discretion afforded the agency by the plain language of the statute
the Commission can ease the path for new broadcast entrants, while enabling existing broadcasters to
offer expanded, innovative services.12 National Association of Media Brokers (“NAMB”) indicates that
banks from Canada and Europe have expressed their interest in making equity investments in U.S.
broadcast stations but that the alien ownership limitations in section 310(b)(4) of the Act, as applied to the

7 Market Entry NPRM, 10 FCC Rcd at 4884 ¶ 99.
8 CBI Request at 1; see also CBI May 28, 2013, Ex Parte at 1. CBI members comprise national broadcast networks,
radio and television station licensees, and community and consumer organizations.
9 Media Bureau Announces Filing of Request for Clarification of the Commission’s Policies and Procedures Under
47 U.S.C. §310 (b)(4) by the Coalition for Broadcast Investment,
MB Docket No. 13-50, Public Notice, 28 FCC Rcd
1469 (MB 2013). Comments were filed by Adelante Media Group, Nexstar Broadcasting, Inc., Asian American
Justice Center, Minority Media and Telecommunications Council, National Association of Broadcasters, National
Association of Media Brokers, Dale A. Ganske, Bradley L. Gould and David A. Schum. Reply comments were
filed by CBI, National Association of Broadcasters, Alaska Broadcast Communications, Inc. et al., Wiley Rein LLP,
and National Association of Black Elected Legislative Women. See also Letter from Sen. Harry Reid (D-Nevada) to
Julius Genachowski, FCC Chairman (June 8, 2012); Letter from Sen. Charles Schumer (D-New York) to Julius
Genachowski, FCC Chairman (July 2, 2012). Senators Reid and Schumer support a case-by-case review process for
foreign broadcast investments and coordination of national security reviews with Executive Branch agencies.
10 CBI Request at 2.
11 Nexstar Comments at 2; see also Alaska Broadcast Communications, Inc., Juneau Alaska Communications, LLC
and Texarkana Radio Center Licenses, LLC (jointly “AJT”) Joint Reply Comments at 2 n.4.
12 CBI Reply Comments at 2.
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broadcast industry, have limited their participation.13 Broadcasters support CBI’s request for clarification
as a way to attract new sources of capital to their industry.14
6.
Commenters also highlight the fact that the Commission adjusted its policies and
procedures involving common carrier licensees over 15 years ago to authorize foreign investment in
excess of the statutory benchmark in order to encourage a “more open and competitive U.S.
telecommunications market.”15 Commenters attribute “globalization, growth and innovation” in the
telecommunications sector to that Commission decision.16 NAB adds that the Commission has issued
approximately 150 section 310(b)(4) rulings authorizing foreign investment in U.S. telecommunications
carriers exceeding the 25 percent statutory benchmark.17 By comparison, in the view of industry
commenters, the Commission’s inflexibility in its review of broadcast foreign investment over the 25
percent benchmark has deprived the broadcast sector of available capital.18
7.
Several commenters remark that the media landscape has evolved significantly since
section 310 was enacted and that those changes eliminate the need to restrict foreign ownership in
broadcast licensees to 25 percent.19 CBI member Adelante Media Group states that imposition of the
limit on broadcasters is unfair because broadcasters must compete against distribution platforms that are
not subject to the same statutory policy – Netflix, Apple, Google, Twitter, multichannel video program
distributors, and pay TV networks.20 Others concur,21 stating that wireless carriers and cable operators
have seen significant capital investments from foreign interests while broadcasters have been denied those
same opportunities.22 Wiley Rein LLP similarly contends that a revised foreign investment policy for
broadcasting would correct the current marketplace distortion that exists between broadcasters and their

13 NAMB Comments at 2.
14 National Association of Broadcasters Comments at 1-2 (“NAB”), citing, Foreign Ownership NPRM, 26 FCC Rcd
at 11706; Adelante Media Group Comments at 2; AJT Joint Reply Comments at 3-4; CBI Request at 3. But see
Comments of Bradley L. Gould, David A. Schum.
15 Nexstar Comments at 3 n.6, citing Market Entry Order, 11 FCC Rcd at 3943 ¶ 183.
16 CBI Request at 4.
17 NAB Comments at 3, citing Foreign Ownership NPRM, 26 FCC Rcd at 11705-06 ¶ 2.
18 CBI Request at 5; NAB Comments at 3 (“. . . Commission should not continue its disparate treatment of broadcast
entities seeking needed investment capital from a variety of sources, including those outside the United States.”).
19 NAB Comments at 3; CBI Request at 3-4.
20 Adelante Comments at 2. Adelante Media Group specializes in Spanish language radio and television
broadcasting in emerging Hispanic markets, owning and operating 18 radio stations in nine markets. Jay Meyers,
Chief Executive Officer of Adelante, is also President and CEO of Broadcast Management and Technology, a firm
that consults with financial institutions and broadcast owners. Adelante Comments at 1-2; see also Nexstar
Comments at 2-3; AJT Joint Reply Comments at 3-4 n.11 (citing Statement of Ajit Pai, Commissioner, Federal
Communications Commission, Hearing Before the Committee on Commerce, Science, and Transportation of the
United States Senate, “Oversight of the Federal Communications Commission,”
2013 WL 987095 *11 (Mar. 12,
2013); Wiley Rein Reply Comments at 4.
21 See, e.g., NAB Reply Comments at 2 n.4, citing Foreign Ownership Second Report and Order, Statement of
Commissioner Jessica Rosenwercel (available at
http://transition.fcc.gov/Daily_Releases/Daily_Business/2013/db0418/FCC-13-50A4.pdf ) and Statement of
Commissioner Ajit Pai (available at http://transition.fcc.gov/Daily_Releases/Daily_Business/2013/db0418/FCC-13-
50A5.pdf).
22 NAMB Comments at 2-4.
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competitors in other services.23 NAB states that today’s security concerns stem principally from the
possibility that foreign interests will engage in cyber-warfare over wired and wireless communications
networks, not from the possibility of editorial control over broadcast transmissions.24
8.
CBI maintains that a regulatory infrastructure exists that is sufficient for the Commission
to evaluate broadcasters’ foreign investment proposals. They recommend that the Commission utilize the
procedures already in place with respect to proposed common carrier foreign ownership to coordinate
with the relevant Executive Branch agencies on any issues related to national security, law enforcement,
foreign policy, or trade policy with respect to particular applications or proposed transactions that would
exceed 25 percent foreign investment in the controlling U.S. parents of telecommunications entities.25
CBI notes that, pursuant to current procedures, the Commission regularly refers requests for section
310(b)(4) declaratory rulings involving such proposed investments in common carriers to the relevant
Executive Branch agencies with expertise in national security matters.26 CBI suggests that a similar
process would ensure that broadcast transactions that propose foreign investment over the 25 percent
benchmark would receive national security review.27
9.
NAB and other commenters observe that Congress and the Commission have long
recognized lack of access to capital as a leading barrier to increased ownership opportunities for small
businesses, including women and minorities, in broadcasting and other communications sectors.28
Commenters in other Commission proceedings have raised similar concerns. For example, in the current
quadrennial review of broadcast ownership rules, Diversity and Competition Supporters29 request that the
Commission “relax its foreign ownership policies pursuant to section 310(b)(4) to provide new funding
options for minority broadcast entrepreneurs . . . and give all U.S. broadcasters the opportunity to increase
their investments in foreign broadcast outlets.”30 Furthermore, in its comments in this proceeding,
Minority Media and Telecommunications Council (“MMTC”), on behalf of 31 national minority and civil
rights organizations, states that encouraging foreign investment in broadcasting would create “reciprocal

23 Wiley Rein Reply Comments at 3; CBI Reply Comments at 5 (asserting that increased investment will speed the
development of additional services, including 3-D television, ultra-high definition television and “services not yet
envisioned”).
24 NAB Comments at 6.
25 CBI Request at 8.
26 Id., citing FCC Homeland Security Liaison Activities (Mar. 2012).
27 CBI Request at 8.
28 Asian American Justice Center Comments at 1; CBI Request at 4; see also NAB Comments at 5 n.13(the
Commission has previously recognized that the primary impediment to the participation of women and minorities in
spectrum-based services is lack of access to capital, caused by factors which include higher costs in raising capital
and lending discrimination).
29 Diversity and Competition Supporters (“DCS”) includes 50 trade, civil rights, legislative and scholarly
organizations. See Initial Comments of the Diversity and Competition Supporters in Response to the Notice of
Proposed Rulemaking, 2010 Quadrennial Regulatory Review – Review of the Commission’s Broadcast Ownership
Rules and Other Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996, Promoting
Diversification of Ownership in the Broadcasting Services
, MB Docket Nos. 09-182, 07-294 (“DCS Initial
Comments”).
30 See DCS Initial Comments at 24. Several commenters in that proceeding broadly endorsed DCS’ proposal that
the Commission relax foreign ownership policies. See Reply Comments of Tribune Company, Debtor-in-
Possession, MB Docket Nos. 09-182, 07-294 at 41-42; Bonneville/Scranton Reply to the Report on Ownership of
Commercial Broadcast Stations, MB Docket Nos. 09-182, 07-294 at 13 (“323 Report”); see also NAB 323 Report
Reply at 3. See also “Azteca: Raise Foreign Ownership Limits,” by Harry A. Jessell, TV NEWSCHECK (July 13,
2010) (Azteca International Corp. urges the Commission to relax foreign ownership rules to allow foreign
companies to own up to 51 percent of U.S. broadcasting companies).
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opportunities” for American broadcasters to expand their footprints into radio and television markets in
regions and countries such as Central and South America, China, Korea, and Australia.31 These groups
maintain that relaxing the strict interpretation and application of section 310(b)(4) is one of the most
significant steps the Commission can take to reverse the decline in minority broadcast ownership.32
Commenters, including Adelante and NAMB, assert that access to additional capital will support the
creation of more programming aimed at racial and ethnic minorities and bilingual speakers, and foster
new entrants into broadcast ownership.33

III.

DISCUSSION

10.
We believe the broadcast industry, the financial sector, and ownership diversity
advocates will each benefit from a fresh statement of our policy and procedures governing Commission
review under section 310(b)(4) of the Act of proposals for foreign investment exceeding the 25 percent
benchmark in U.S.-organized entities that control broadcast licensees. We acknowledge commenters’
common position that changes have occurred in the media landscape and marketplace since the foreign
ownership restriction was enacted and that limited access to capital is a concern in the broadcast industry,
especially for small business entities and new entrants, including minorities and women. We read the
plain language of the statute as providing us the opportunity to review on a case-by-case basis
applications for approval of foreign investment in the controlling U.S. parent of a broadcast licensee
above the 25 percent benchmark. Such applications may be granted unless the Commission finds that a
denial will serve the public interest. In light of the concerns many commenters raised, we believe that a
clear articulation of the Commission’s approach to section 310(b)(4) in the broadcast context has the
potential to spur new and increased opportunities for capitalization for broadcasters, and particularly for
minority, female, small business entities, and new entrants.34 Greater capitalization may in turn yield
greater innovation, particularly in programming directed at niche or minority audiences.
11.
Section 310(b)(4) of the Act authorizes us to evaluate whether or not, in a particular
situation, it is in the public interest to permit an entity to obtain or to hold a station license
notwithstanding the fact that the alien interest in the U.S. parent of the station licensee would exceed the
statutory benchmark – and to make such determinations on a case-by-case basis.35 Congress’ directive is
that 25 percent alien ownership is the point at which the Commission must act and exercise its discretion
in making a public interest determination on proposed ownership arrangements that would exceed this
level.36 Congress entrusts to the Commission the discretion to reject alien voting or ownership above the

31 Comments of MMTC on behalf of Thirty-one Civil Rights Organizations at 1; see also CBI Reply Comments at 1,
5; Asian American Justice Center Comments at 1; Letter from Margaret L. Tobey, Vice President for Regulatory
Affairs, NBC Universal, to Marlene H. Dortch, FCC Secretary (Nov. 7, 2013) (“the Declaratory Ruling . . . could
help U.S. broadcast companies gain greater access to foreign media markets”).
32 Comments of MMTC on behalf of Thirty-one Civil Rights Organizations at 1; see also National Organization of
Black Elected Legislative Women Reply Comments at 2. But see Letter from Lauren M. Wilson, Policy Counsel,
Free Press, to Marlene H. Dortch, FCC Secretary (Nov. 7, 2013) (raising concerns about the availability of foreign
investment for new entrants and smaller broadcasters).
33 Adelante Comments at 2; NAMB Comments at 4; NAB Reply Comments at 3.
34 We also hope that clarifying our policy regarding foreign investment will encourage other countries to liberalize
restrictions on investment in their media markets and pave the way for greater U.S. investment opportunities in those
markets.
35 See, e.g., Wilner & Scheiner, 103 FCC 2d at 524 (clarifying, inter alia, that limited partnership interests are within
the scope of section 310(b)).
36 The statutory benchmark reflects Congress’ judgment of the point at which foreign ownership and voting may
conflict with the national interest. Fox Television Stations Inc., 11 FCC Rcd 5714, 5722 (1995); see also Univision
Holdings, Inc. (Transferor) and Perenchio Television, Inc. (Transferee) for Transfer of Control of Univision Station

(continued….)
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benchmark if the Commission finds that the public interest would be served by the refusal of the
transaction which would confer a greater than 25 percent alien interest in the controlling U.S. parent of a
domestic broadcast license or by the revocation of the licenses involved.37 The Commission’s decision in
such cases is based on the specific facts and unique circumstances presented by each application before
it.38 The bulk of the Commission’s precedent under section 310(b)(4) has involved foreign investment in
the controlling U.S. parents of telecommunications carriers, not broadcast station licensees.39 To the
extent that the Commission’s past practice may have been interpreted as precluding case-by-case review
of applications involving foreign investment in the controlling U.S. parents of broadcast licensees, as
some commenters have suggested, we take this occasion to clarify that the contrary is true. We have
given, and will continue to give, the fact-specific, individual case-by-case review the statute calls for to
applications involving broadcast stations. As we have previously concluded with respect to the
application of section 310(b)(4) in broadcast cases, the 25 percent benchmark “is only a trigger for the
exercise of our discretion, which we then exercise based upon a more searching analysis of the
circumstances in each case.”40
12.
The Commission has not interpreted the benchmark as a permissive threshold that
would allow foreign investors to hold more than 25 percent interests in the controlling U.S. parents of
licensees absent Commission action.41 Rather, under the Commission’s precedent, the 25 percent
benchmark set forth in section 310(b)(4) of the Act has been applied to restrict foreign ownership of the
controlling U.S. parents of broadcast licensees absent an affirmative Commission finding in a particular
case that such ownership is in the public interest. The parties to this proceeding have not asked us to
reconsider this precedent. Thus, we reiterate that, under this precedent, applicants may not exceed the
310(b)(4) benchmark absent the express prior consent of the Commission. To exercise the statute’s
discretion in a meaningful way, the Commission must receive from the applicant detailed information
sufficient for the agency to make the public interest finding required by the statute. 42
13.
Applicants seeking approval of broadcast assignments or transfers must continue to
(Continued from previous page)
Group, Inc., Licensee of Television Station Group Inc., 7 FCC Rcd 6672 (1992) (examining alien de facto control
and real-party-in-interest issues for section 310(b)(4) compliance).
37 Fox I, 10 FCC Rcd at 8469-70.
38 Fox I, 10 FCC Rcd at 8472.
39 See, e.g., supra note 5; see also Foreign Ownership Second Report and Order, 28 FCC Rcd 5741.
40 Fox I, 10 FCC Rcd at 8472. See also GRC Cablevision Inc., 47 FCC 2d 467, 468 ¶ 6 (1974) (alien ownership in
broadcast television “presents different questions which we will deal with as they arise in concrete situations.”).
41 Fox I, 10 FCC Rcd at 8745-46 (stating that “. . . [T]he Commission must be given the opportunity to make a
public interest determination specifically focused upon the implications of exercising its discretion before an
ownership structure above the foreign ownership benchmark is vested with corporate prerogatives over a
Commission licensee.”); Galesburg Broadcasting Company, Notice of Apparent Liability for Forfeiture, 6 FCC Rcd
2210, 2210 (1991) (“Galesburg”) (finding that the transfer of a majority of the voting stock in the U.S.-organized
parent of the licensee to a trustee wholly owned by a Canadian bank without prior Commission approval “deprived
the Commission of the opportunity to pass on the propriety of alien ownership which Section 310(b)(4) of the Act
contemplates”). See also Foreign Ownership First Report and Order, 27 FCC Rcd at 9843 n.58; Foreign
Ownership Second Report and Order
, 28 FCC Rcd at 5759, n.98 (both citing to Fox I and Galesburg for the same
proposition).
42 Fox I, 10 FCC Rcd at 8476-77; Galesburg Broadcasting Company, 6 FCC Rcd at 2210; compare In re Hispanic
Broadcasting Corp
., 18 FCC Rcd 18834 (2003) (finding that the equity and voting interests held by foreign entities
in Univision comply with the alien ownership restrictions set forth in section 310 of the Communications Act). See
also Foreign Ownership Second Report and Order
, 28 FCC Rcd at 5759 (confirming “the Commission’s long-
standing policy that the statute requires us to review and approve foreign ownership of licensees subject to section
310(b)(4) before that foreign ownership exceeds the 25 percent statutory limit”).
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inform the Commission of their proposed transaction’s compliance with section 310 of the Act.43 For
example, Section III, Question 9 of Form 314 requires proposed assignees to certify their compliance with
the provisions of section 310 relating to interests of aliens and foreign governments. Applicants must
continue either to certify that their transactions will comply with section 310 benchmarks or, in the event
they will not, to indicate that they will not comply and provide an explanatory exhibit.44 A petition for
declaratory ruling to allow foreign ownership to exceed the 25 percent benchmark must be filed along
with any application in which the applicant cannot certify compliance with section 310(b)(4).45 Again, in
all cases, before the benchmark may be exceeded, we must approve the transaction.
14.
We also clarify that, prospectively, if a proposed foreign investment in a broadcast
licensee’s controlling U.S. parent would exceed the benchmark but does not require the filing of a Form
314 or other FCC application, a petition for declaratory ruling must be filed with the Commission in
advance.46 We expect to process Form 314 and other applications, as well as petitions for declaratory
rulings in this category, in a similar manner for purposes of section 310(b)(4) review. Following
preliminary staff review to ensure completeness of the filing materials, both types of submissions will be
subject to public notice seeking comment from interested parties. The Commission will coordinate as
necessary and appropriate with Executive Branch agencies regarding such applications and petitions.
Consistent with the Commission’s long-standing policy in reviewing foreign ownership of common
carrier applicants and licensees, the Commission will continue to afford appropriate deference to the
expertise of the Executive Branch agencies on issues related to national security, law enforcement,
foreign policy, and trade policy.47 As part of its review, the Commission may send the applicants or
petitioners letters of inquiry or document requests, request additional materials, or take any other needed
measures in order to conduct a comprehensive public interest review. Once the Commission has
concluded its inquiry, it will release a written opinion or other notice authorizing, denying, or
conditioning the requested foreign ownership.48

43 See FCC Form 314 – Application for Consent to Assignment of Broadcast Station Construction Permit or License,
Section III, Question 9, Alien Ownership and Control (Oct. 2012) (available at
http://transition.fcc.gov/Forms/Form314/314.pdf); FCC Form 315 – Application for Consent to Transfer Control of
Entity Holding Broadcast Station Construction Permit or License, Section IV, Question 11, Alien Ownership and
Control (Oct. 2012) (available at http://transition.fcc.gov/Form/Form315/315.pdf; FCC Form 316 – Application for
Consent to Assign Broadcast Station Construction Permit or License or Transfer of Control of Entity Holding
Broadcast Station Construction Permit or License, Section III, Question 10, Alien Ownership and Control (June
2010) (available at http://transition.fcc.gov/Forms/Form316/316.pdf).
44 We use the “long-form” broadcast assignment application, FCC Form 314, as an example. The same standard
would apply whenever compliance with the alien ownership provisions or certification to such compliance arises.
See, e.g., supra note 43.
45 47 C.F.R. § 1.2(a) (the Commission may on motion or on its own motion issue a declaratory ruling terminating a
controversy or removing uncertainty).
46 Id.
47 See generally Foreign Ownership Second Report and Order, 28 FCC Rcd at 5751 ¶ 13, 5762 ¶ 34; see also Rules
and Policies on Foreign Participation in the U.S. Telecommunications Market: Market Entry and Regulation of
Foreign Affiliated Entities
, IB Docket Nos. 97-14 and 95-22, Report and Order and Order on Reconsideration, 12
FCC Rcd 23891, 23920 ¶ 63 (1997) (“Foreign Participation Order”) (“We thus will continue to accord deference to
the expertise of Executive Branch agencies in identifying and interpreting issues of concern related to national
security, law enforcement, and foreign policy that are relevant to an application pending before us.”); see also
Market Entry Order
, 11 FCC Rcd at 3955 ¶ 219. We anticipate that we may further develop our broadcast foreign
ownership policies and procedures as we conduct our case-by-case reviews of particular applications and petitions
and as we coordinate such filings with the appropriate Executive Branch agencies.
48 See, e.g., Applications of Cellco Partnership d/b/a Verizon Wireless and SpectrumCo LLC and Cox TMI, LLC For
Consent To Assign AWS-1 Licenses, Applications of Verizon Wireless and Leap for Consent To Exchange Lower
700 MHz, AWS-1, and PCS Licenses, Applications of T-Mobile License LLC and Cellco Partnership d/b/a Verizon

(continued….)
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15.
We expect to evaluate proposals on the basis of our body of decisions relating to
broadcast ownership and foreign ownership and the framework set forth in this item, evaluating the facts
as they are presented in each specific application or petition for declaratory ruling.49 By their nature,
these case-by-case reviews will lead to distinct, factually driven results. Each application or petition will
be assessed on its own merits, and we will determine, given the particular circumstances presented in a
particular case, whether the public interest would be served by permitting the requested foreign
ownership. We anticipate that applicants may propose ownership by a range of foreign interests and
countries, involving varying corporate and organizational structures, with differing public interest
showings. Although many commenters have suggested that there is significant availability of foreign
capital for broadcasters, we cannot predict whether applications proposing new foreign investment will in
fact increase. If they do increase, over time, the Commission’s case-by-case review may suggest policy
issues or streamlined procedural mechanisms that could be addressed in future Commission proceedings.
We may in the future elect to create a standardized review process similar to that adopted in the common
carrier context.50 At this time, however, we are cognizant of the distinctions between common carrier
facilities and broadcast stations and of the differences in the Commission’s experiences with proposals to
exceed the section 310(b)(4) benchmark for foreign investments in these two categories of Commission
licensees. Therefore, we believe it is appropriate that our review of proposed broadcast investments
remain on a case-by-case basis and be allowed to mature before we consider comprehensive rules and
procedures similar to those applicable to foreign investment in common carrier licensees.51
16.
Some commenters have asserted that the underlying national security rationale for section
310(b)(4) in the broadcast area, protection from foreign propaganda on radio and television stations, no
(Continued from previous page)
Wireless for Consent to Assign Licenses, WT Docket No. 12-4, Memorandum Opinion and Order and Declaratory
Ruling, FCC 12-95, 27 FCC Rcd 10699, 10769 ¶¶ 191-92 (2013), pet. for recon. pending (conditioning grant of
applications to assign licenses and grant of declaratory ruling to Verizon Wireless on its compliance with the terms
and conditions contained in the March 27, 2008, Letter to Stewart Baker, Assistant Secretary of Policy, U.S.
Department of Homeland Security; and conditioning grant of applications to assign licenses to T-Mobile License on
its compliance with the terms contained in the National Security Agreement entered into on January 12, 2001, as
amended as of January 4, 2008, between Deutsche Telekom and the U.S. Department of Justice, the Federal Bureau
of Investigation, and the U.S. Department of Homeland Security).
49 We will not entertain petitions to exceed the foreign ownership limits of section 310(b)(3) for foreign investment
in broadcast licensees. Foreign interests in a U.S.-organized parent that controls a licensee are subject to section
310(b)(4), not section 310(b)(3). Unlike section 310(b)(4), section 310(b)(3) does not afford the Commission any
discretion to approve foreign investment in broadcast licensees in excess of the limitations contained therein. While
the Commission has statutory authority to forbear from applying any regulation or provision of the Act to a
telecommunications carrier or service if the Commission determines that forbearance is in the public interest, that
authority is limited to application of those requirements to telecommunications carriers or services. See 47 U.S.C.
§ 160. It does not extend to broadcast station licensees covered by section 310(b)(3). Foreign Ownership Second
Report and Order
, 28 FCC Rcd at 5749 ¶ 9 n.31. See also Foreign Ownership First Report and Order, 27 FCC Rcd
9832 (adopting forbearance from applying the section 310(b)(3) limit to the class of common carrier licensees in
which foreign ownership in the licensee is held 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) of the Act).
50 See Foreign Ownership Second Report and Order, 28 FCC Rcd 5741 (codifying policies and procedures for
authorizing foreign ownership of common carrier, aeronautical en route, and aeronautical fixed radio station
licensees under section 310(b)). See also Foreign Participation Order, 12 FCC Rcd at 24033 ¶ 323.
51 Some commenters raise additional suggestions for Commission review of foreign investment in broadcast
licensees. Although many of these recommendations proffer thoughtful contributions to the proceeding record, it is
premature to adopt them at this time. Our consideration of the numerous overarching issues involved in this area is
ongoing. As we continue to address applications on a case-by-case basis, we will ascertain whether it is appropriate
to conduct a rulemaking proceeding.
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longer exists.52 Although many new potential threats and national security issues have arisen as
technology has advanced,53 we do not believe that the historical statutory concern for foreign influence
over broadcast stations has disappeared. Broadcast stations are licensed to serve the needs and interests
of local U.S. communities. They uniquely offer a range of critical information services to the American
public, including, for instance, the provision of local, state, national, and international news, national
Emergency Alerts, local severe weather alerts, Amber Alerts for missing children, and homeland security
information. Ensuring that the ownership of broadcast licensees serves the public interest pis embodied in
a statutory directive with which we must faithfully comply and we will evaluate applications proposing
foreign broadcast ownership accordingly. In particular, we will address each specific situation in terms of
its potential public interest benefits and any relevant public interest concerns, including national security
concerns, consistent with the statute and this Declaratory Ruling.

IV.

ORDERING CLAUSE

17.
Accordingly, IT IS ORDERED that, pursuant to the authority contained in sections 4(i)
and 310(b) of the Communications Act of 1934, as amended, 47 U.S.C. §§ 154(i), 310(b), 5 U.S.C §
554(e) and section 1.2 of the Commission’s rules, 47 C.F.R. § 1.2, this Declaratory Ruling in MB Docket
No. 13-50 IS ADOPTED.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary

52 NAB Comments at 6; NAMB Comments at 4; CBI Request App. at 2; Nextstar Comments at 2.
53 See, e.g., “Confidential Reports List U.S. Weapon System Designs Compromised by Chinese Cyberspies,” by
Ellen Nakashima, THE WASHINGTON POST (May 27, 2013).
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STATEMENT OF

CHAIRMAN TOM WHEELER

Re:

Commission Policies and Procedures Under Section 310(b)(4) of the Communications Act,
Foreign Investment in Broadcast Licensees

, Declaratory Ruling, MB Docket No. 13-50
Promoting a regulatory framework that does not inhibit the flow of capital to the US
communications sector is an important goal of Commission policy. In today’s global economy,
companies regularly look beyond their borders for new sources of investment. We have heard from the
broadcast industry, however, that the Commission’s interpretation of Section 310(b)(4) is widely
perceived as an obstacle to new investment opportunities.
Today’s Declaratory Ruling clarifies that the Commission is open to considering proposals for
foreign investment in broadcast licensees that exceed the 25 percent statutory benchmark.
I want to emphasize that we are “open to considering” such proposals. This is far from an
indication that we’re going to rubber stamp them. The Commission will look at each petition and
application on a case-by-case basis to determine if approval to exceed 25 percent benchmark for foreign
ownership is consistent with the public interest, including the goals established by Congress. Those goals
include encouraging investment, innovation, media diversity, localism, and the efficient use of spectrum.
The infusion of additional foreign capital has the potential to enhance the ability of broadcasters
to use their spectrum to serve the needs and interests of their communities. Moreover, as we all know, the
Commission is engaged in an extensive process to assure that spectrum is put to its highest and best use.
Among other means, this process will utilize a voluntary incentive action to allow the market to make that
decision. I, therefore, will assess foreign ownership petitions and applications by looking at, among other
factors, whether they will help to fulfill these goals, including efficient spectrum usage.
Today’s ruling could, for example, unleash new capital to help stations to make the up-front
investment necessary to share a channel after their spectrum is sold at auction. Similarly, foreign capital
that would help a broadcaster move from the UHF band to VHF band might also further the
Commission’s efficiency goals. We are in the midst of a major effort to improve spectrum efficiency, and
I encourage those who might want to attract foreign investment to keep those goals in mind.
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STATEMENT OF

COMMISSIONER MIGNON CLYBURN

Re:

Commission Policies and Procedures Under Section 310(b)(4) of the Communications Act,
Foreign Investment in Broadcast Licensees

, Declaratory Ruling, MB Docket No. 13-50
From my earliest days as a Commissioner, I have heard time and again that a major impediment
to new entry in the broadcast industry is access to capital. These concerns, expressed by broadcasters and
public sector interests alike, highlight just how acute this situation is for those who are underrepresented
in the ownership ranks, namely minorities and women. Knocking down unnecessary barriers and
realizing greater ownership diversity will help to open our airwaves to the presentation of content that
more fully reflects the composition of our broad society. And while it may be true that the Commission
has limited jurisdiction to influence the flow of capital, Section 310(b)(4) of the Act is at least one tool we
do have.
Today, I am pleased to say, we clarify the Commission’s policies for foreign investment in
broadcast licensees by signaling that the Commission is open to considering proposed foreign investments
in broadcasting on a case-by-case basis. Doing so will help ensure that broadcasting remains a vital,
forward-leaning media service. Competition and innovation in media in the 21st century move at warp
speed, and in order to keep pace, broadcasters need new and increased sources of capital. Although other
platforms, such as telecommunications, have long had the benefit of access to foreign investment,
broadcasters have not yet fully tapped those available resources. My hope is that this action will remove
whatever hindrances may have restricted new opportunities.
Today’s Declaratory Ruling affirms that the plain language of the statute allows the Commission
to authorize foreign capital investment above the 25 percent statutory threshold in the controlling U.S.
parent of a broadcast licensee. The decision does not attempt to set forth in detail all of the criteria we
might consider in determining whether a particular investment is consistent with the public interest.
Instead, it contemplates that the Commission will proceed thoughtfully in evaluating all the facts and
circumstances implicated by any specific arrangement that is proposed. An applicant is required to
submit detailed information sufficient for us to make a satisfactory public interest finding. No investment
above the benchmark is permitted without the express prior approval of the Commission. Consistent with
our longstanding practice in reviewing foreign investment in telecommunications licensees, we will
continue to afford appropriate deference to the expertise of the Executive Branch agencies on issues
related to national security, law enforcement, foreign policy, and trade policy.
I thank the staff in the Media Bureau for their hard work on this important item.
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STATEMENT OF

COMMISSIONER JESSICA ROSENWORCEL

Re:

Commission Policies and Procedures Under Section 310(b)(4) of the Communications
Act of 1934, Foreign Investment in Broadcast Licensees

, MB Docket No. 13-50
Like other segments of the communications industry, broadcasters are facing an increasingly
complex, multi-platform future. But unlike other segments of the communications industry, broadcasters
have faced unique funding constraints with respect to investment from foreign shores.
Today, the Commission remedies this anomaly. We begin by acknowledging that federal law
expressly permits foreign investment of up to 25 percent in the controlling parent of a broadcast licensee.
However, we make clear one of the less clear aspects of the law—that investment that exceeds this 25
percent benchmark is permissible, if the Commission determines that it is in the public interest.
I believe that this is the right thing to do—for two fundamental reasons.
First, I believe our existing approach that treats this 25 percent threshold as an inflexible bar is
now a historical aberration. This was a policy long-ago designed to prevent foreign powers from
disrupting ship-to-shore governmental communications during warfare. But just as horses and bayonets
are not the tools of modern warfare, the cyber threats we face today are not especially well-guarded by
this prohibition. Moreover, as scores of civil rights groups have acknowledged, this historical anomaly
may have the effect of diminishing investment in small and minority-owned broadcasters.
Second, I believe the steps we take here are entirely consistent with national security objectives.
We grant no blanket waivers. We do not permit foreign entities to wholly or directly own broadcast
licenses. We will just review what comes before us on a case-by-case basis, consistent with the public
interest—and that includes appropriate deference to Executive Branch agencies with expertise in security
and trade matters. This is a modern and thoughtful approach. It has my full support.
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STATEMENT OF

COMMISSIONER AJIT PAI

Re:

Commission Policies and Procedures Under Section 310(b)(4) of the Communications Act,
Foreign Investment in Broadcast Licensees

, MB Docket No. 13-50

Over a year ago, I called upon the Commission to modernize its approach to foreign investment
in broadcasting.1 Today, we do just that. At long last, we revise our interpretation of Section 310(b)(4) of
the Communications Act to eliminate the obsolete de facto ban on foreign investment of more than 25
percent in U.S. broadcast holding companies. I am optimistic that this Declaratory Ruling will invigorate
American broadcasting, increase minority ownership, and expand opportunities abroad for U.S. media
companies.
As the Declaratory Ruling points out, there has been a sharp disparity in the Commission’s
treatment of foreign investment in the common carrier and broadcast contexts.2 On one hand, in recent
years, the Commission has approved foreign investment in U.S. telecommunications carriers exceeding
the 25 percent benchmark approximately 150 times. The Commission has repeatedly recognized that
“foreign investment has been . . . an important source of financing for U.S. telecommunications
companies, fostering technical innovation, economic growth and job creation.”3 Indeed, foreign
investment has been critical to creating the robust competition we see in today’s wireless marketplace.
On the other hand, while a foreign company can indirectly hold more than a 25 percent stake in a
nationwide wireless carrier, cable operator, or Internet service provider, it has been all but impossible for
a foreign entity to own more than 25 percent of a U.S. broadcast holding company. The end result? A
British company has (at least for the time being) a 45 percent stake in our nation’s largest wireless carrier,
but that same British company is not allowed to hold a 45 percent stake in a single AM radio station in
rural Kansas.
This disparity does not make any sense to me,4 and it harms our nation’s broadcasting industry.
Foreign investment can be an “important source of financing . . . innovation, economic growth and job
creation” for broadcasters, just as it has been for telecommunications carriers. I am therefore pleased that
today’s Declaratory Ruling takes a much-needed step towards leveling the regulatory playing field. As in
the common-carrier context, the Commission will now engage in a case-by-case review of proposed
foreign investment in broadcast holding companies that exceeds a 25 percent stake. This approach will
give broadcasters more options for accessing capital while still allowing the Commission to safeguard
national security.
Aside from boosting the broadcast industry, today’s ruling is good news for another, equally
important reason. It will increase minority ownership of broadcast outlets. Since joining the

1 See Remarks of Commissioner Ajit Pai before the NAB Radio Show (Sept. 19, 2012) (NAB Radio Show Speech),
available at http://go.usa.gov/Tj2G.
2 Declaratory Ruling at para. 6.
3 See 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, Second Report and Order, 28
FCC Rcd 5741, 5744, para. 3 (2013) (Second Report and Order); 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, Notice of Proposed Rulemaking, 26 FCC Rcd 11703, 11705, para. 2 (2011).
4 See NAB Radio Show Speech at 6; Second Report and Order, 28 FCC Rcd at 5840 (Statement of Commissioner
Ajit Pai).
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Commission, I have heard the same message over and over again when it comes to ownership diversity:
The biggest obstacle to minority ownership in the broadcast industry is the lack of access to capital. That
is why the Minority Media and Telecommunications Council and 30 other national minority and civil
rights organizations have told us that permitting additional foreign investment in the broadcasting
industry would be “one of the most significant steps the Commission could take” “[t]o reverse the decline
in minority broadcast ownership.”5 With an expanded ability to access capital from abroad, minority
entrepreneurs will have a better chance of being able to enter into the broadcast industry or expand
existing businesses. Indeed, this item demonstrates how regulation can serve as a barrier to minority
ownership and how modernizing our rules can promote diversity.
Today’s decision also should help expand investment opportunities abroad for U.S. media
companies. Some countries only permit foreign ownership in their broadcast markets by investors whose
home nation provides reciprocity. Therefore, by liberalizing our approach to foreign investment in the
U.S. broadcast industry, our own companies should have greater opportunities to participate in those
nations’ media markets. And I hope that our efforts will encourage countries that currently impose more
stringent restrictions on foreign investment to relax their own rules.
Finally, given our new Chairman’s well-known interest in history, I thought that it would be
fitting to conclude this morning with a quote from one of my favorite historical figures, Winston
Churchill: “[T]his is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the
beginning.” Put simply, this Declaratory Ruling does not finish the Commission’s work on this topic.
Today, we have just taken the relatively easy step of updating our general policies to fit the times. Now,
the harder work begins. We will have to develop additional procedures for applicants seeking to take
advantage of this Declaratory Ruling. We will need to process the applications we receive. And we will
have to formulate more specific substantive standards for analyzing those applications. As we go about
these tasks, I hope that we will move promptly and stay focused on the important objective of maximizing
investment in the broadcast industry.

5 Letter from the Minority Media and Telecommunications Council, et al. to Hon. Julius Genachowski, Chairman,
FCC, et al., MB Docket No. 13-50 (filed Apr. 15, 2013), available at
http://apps.fcc.gov/ecfs/document/view;jsessionid=5ZQTRnSXJkRtrZss32PgPGL3gGHf8yjL0v8GfWg27YbcGGv
MZg3R!638063854!-817071755?id=7022281769.
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STATEMENT OF

COMMISSIONER MICHAEL O’RIELLY

Re: Commission Policies and Procedures Under Section 310(b)(4) of the Communications Act,
Foreign Investment of Broadcast Licenses,

MB Docket No. 13-50

Today marks my first Commission Open Meeting as a Commissioner and it is appropriate to start by
expressing my deep appreciation to my new colleagues on the Commission. Chairman Wheeler, former
Acting Chairwoman Clyburn, and Commissioners Rosenworcel and Pai have been especially
welcoming. More importantly, my few days at the Commission have taught me that the true heart and
soul of the Commission is the myriad of warm and helpful employees who bring their energy and
commitment to this building every day.
As most of you know, I arrived at the Commission last week fresh from my confirmation process. Let me
share with you a reoccurring theme from my many meetings and conversations: both Republicans and
Democrats want the Commission to bring greater certainty to the communications marketplace by making
the decisions that are ready to be made.
Turning to the matter before us, the Commission has before it a declaratory ruling on section 310(b)(4) of
the Communications Act of 1934 as it pertains to broadcast licenses. I do have some general thoughts
with this item, which I will discuss, but they do not keep me from voting in favor of its adoption.
I am very familiar with the discussion over 310(b) and the interest by many parties to make alterations. It
seems only fitting that my first Open Meeting addresses the same topic of one of my first hearings as a
staff member of the then-House Commerce Committee.1 At that time, the Congress debated a proposal to
completely repeal 310(b).2 Further, I spent the greater part of the last five-plus years working on various
trade-related matters before the Congress.
The value of the ruling is to clarify that the Commission’s approach to 310(b)(4) should not be interpreted
as foreclosing the option of approving foreign ownership above 25 percent. It can be viewed as a
restatement of the Commission’s longstanding approach. For some, the item may seem as a change in
policy for those who believed the Commission’s prior approach was an irrebuttable presumption against
any relief. In either scenario, U.S. broadcasters and foreign investors should know this Commission is
now open to considering foreign entities holding capital stock of companies that control broadcast
licenses exceeding 25 percent, perhaps up to a high of 100 percent.
The benefits of this clarification could be significant. With a successful application, U.S. broadcasters
will have new sources of capital to operate in the dynamic and competitive video and audio marketplace.
In some instances, greater foreign investment in the companies that control U.S. broadcast licenses may
improve the financial footing of existing broadcasters or increase access to broadcasting for unique voices
in the marketplace.
Equally important, 310(b) has been used over the years as a flawed excuse by other nations to retain
indefensible trade barriers that harm U.S. companies. Bob Vastine of Georgetown University and former
President of the Coalition of Service Industries commented recently that, “For years, it’s [310(b)] been

1 Hearing “Trade Implication of Foreign Ownership Restrictions on Telecommunications Companies,”
Subcommittee on Commerce, Trade, and Manufacturing; House Commerce Committee, March 3, 1995.
2 See H.R. 514, 104th Congress, http://thomas.loc.gov/cgi-bin/query/z?c104:H.R.514:
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used rhetorically against us. When industry has gone in for the right to fully own in the insurance sector
or some other sector, we’ve often had this thrown in our face.”3

General Thoughts

1. Speedier Decision
I acknowledge that the Commission may have been hamstrung recently by the political process, but there
should be ways to be more nimble and responsive for the relatively easy cases. We don’t know what
deals would or could have been done had this item been approved earlier than 14 months from the initial
request. This is not in any way a criticism of the great staff that worked on this item; it is only a thought
to be added to the process reforms being considered.
2. Could be More
The Commission’s action today is commendable, it doesn’t move the needle enough. It could have been
more if it had been accompanied by an NPRM to further reform section 310(b)(4) as it applies to
broadcast licensees. Components of reform could include shifting the burden to the Commission to
justify blocking a deal; establishing a new level that would be acceptable under the public interest (e.g.,
49 percent, 74 percent, or more); or simply providing more guidance on which applications may be more
likely to be approved by the Commission. Recognizing that there are limits to declaratory rulings, the
item’s indication of potentially doing a further Commission proceeding sometime in the future seems
empty.
3. Bigger Picture on Investment
While today’s proceeding should be beneficial to some U.S. broadcasters, it is also useful to non-
broadcasters. Removing trade and investment barriers has benefits outside of the broadcasting sector, as
increasing trade and investment opportunities brings more jobs, improved economic growth and
efficiencies of scale to the U.S. and international marketplace. I am surprised the record did not include
more comment on this point; I am sure the Commission staff would have been happy to accommodate my
thoughts in some capacity. To be clear, no criticism lies with the able staff, who have gone out of their
way to help me, as any issue with incorporating these thoughts into the ruling lies with me and the timing
of my arrival.

Conclusion

All in all, this is a positive step and one I am pleased to support. I extend my appreciation to Former
Acting Chairwomen Clyburn for her work on this item, Commissioner Pai for being an active instigator to
initiate the item, and the Media Bureau staff for getting me up to speed in quick order.

3“FCC Poised to Ease Foreign Investment Restrictions in Broadcast Sector,” Inside US Trade, November 1, 2013.
17

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