At its August Open meeting, the FCC proposed to streamline the requirements related to its review of foreign ownership of entities holding common carrier radio licenses and some aeronautical radio licenses under Section 310(b)(4) of the Communications Act that may have become too burdensome and complex. These proposed changes do not affect the requirements that apply to FCC review of foreign ownership in broadcast licensees. These changes, if adopted, would reduce regulatory barriers and delay to foreign investment in many U.S. telecommunications businesses.
FCC staff commented that the current requirements place a significant burden on licensees requiring time consuming reports at significant costs. These requirements also place a strain on FCC resources to review the numerous and voluminous filings required by the rules. Reform of the foreign ownership review procedures should increase predictability for foreign investors, benefitting the economy and job creation, according to the FCC staff.
Specifically, in the Notice of Proposed Rulemaking (“NPRM”) released on August 9, the FCC seeks comment on several proposed changes to its practices and procedures used for Section 310(b)(4) determinations on foreign ownership:
While the FCC seeks to reduce barriers to investment in telecommunications, the proposed changes would not affect the statutory requirement to seek Commission approval generally of proposed indirect foreign ownership over the 25% threshold and all transfers of control. The Commissioners also emphasized that the proposed changes do not relieve the Commission of its obligation to protect the public interest and national security interests. In separate remarks about the proposal, Commissioner Michael Copps expressed some skepticism that the existing rules place an unwarranted burden on licensees and foreign investors and reiterated the need to scrutinize the impact of the proposed changes on “American consumers, American businesses and America’s well-being.”
The FCC has not yet announced comment and reply comment deadlines.
Please do not hesitate to contact us if you would like more information about how the FCC’s foreign ownership requirements apply to your company or would like to weigh in on the FCC’s proposed changes:
This article was originally published by Bingham McCutchen LLP.