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FCC Denies ASCAP Challenge to Pandora Decision

The FCC has denied a music industry challenge to its decision to allow Pandora to exceed the 25% cap on foreign ownership of a broadcast station, at least for one radio station in South Dakota.

That came in a vote on the item this week by the commissioners. It was on the noncontroversial item agenda along with almost a dozen others that were all voted at once.

In May, in a declaratory ruling in response to a petition from the online music site,  which wants to buy a radio station, the FCC said: "[W]e find that it would serve the public interest to permit a widely dispersed group of shareholders to hold aggregate foreign ownership in Pandora Media in excess of the 25% benchmark.

The FCC this week voted on an American Society of Composers, Authors and Publishers June 3, 2015, petition seeking reconsideration of the declaratory ruling. "[N]one of ASCAP’s arguments on the merits warrants reconsideration or review of the Bureau’s order," the commission concluded.

In granting Pandora's request to exceed the limits, the FCC had said that “The alleged harms [harms ASACAP had alleged] to the performing rights system arise from Pandora’s proposed purchase of a radio station, not from the level of Pandora’s foreign ownership."

The FCC voted back in November ( to clarify that its 25% limit on foreign ownership of broadcast properties is not a hard cap, but a trigger for case-by-case review. At the time it "considered and rejected ASCAP’s suggestion that we leverage our statutory obligations under Section 310(b)(4) [foreign ownership] in an attempt to preserve the current music licensing system."

The declaratory ruling only applied to the "case" of Pandora's ability to buy KXMZ(FM), Box Elder, S.D., a point the FCC made in the Pandora ruling. "With respect to the alleged universality of our holding," it said, "we emphasize that the actions taken herein are limited to the specific circumstances before us and that any petition for declaratory ruling that another publicly traded company may submit will be analyzed based on its own particular facts and circumstances."

But that caveat notwithstanding, it could signal the FCC's willingness to let other "widely dispersed groups of shareholders" include more than 25% foreign ownership of stations, radio and TV at least revisit the issue. The FCC also made that point in the Pandora order in response to a National Association of Broadcasters request that it do so. "Indeed, we intend to examine in the near future whether it would be appropriate for the Commission to revise its methodology..." the FCC said.

Pandora and broadcasters recently teamed up in a new coalition to push back against music publishers, like ASCAP, and artists' push for a per-performance license for on-air and online music. There is currently only a blanket license.

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.