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FCC Lets Pandora Exceed Foreign Ownership Cap

The FCC has granted Pandora permission to exceed the 25% cap on foreign ownership of a broadcast station, at least for one radio station in South Dakota, though it could signal an anticipated loosening of that restriction.

That came in a declaratory ruling in response to a petition by online music site Pandora, which wants to buy a radio station. "[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 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.

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.

ASCAP had petitioned the FCC to deny the Pandora request, but the FCC denied that petition saying it was motivated by the copyright dispute, which needed to be resolved by "Congress, the courts, and other government agencies. Furthermore, we agree that matters concerning the collective licensing regime are unrelated to potential unacceptable foreign influence over U.S. broadcast stations," the FCC said.

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.