The FCC voted unanimously Nov. 14 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.
New chairman Tom Wheeler said that it would be a careful review, not a rubber stamp, but that it could help promote media diversity, and gave a "right on!" to the possibility that it could help finance station spectrum sharing or moves from UHF to VHF channels, allowing for the freeing up of spectrum for wireless.
Asked following the meeting about his reference to those scenarios and whether he was signaling the FCC would look favorably on someone who agreed to participate in the reverse auction in deciding what foreign ownerships to allow, Wheeler said no. "If you're trying to infer from that that there was some kind of oblique blessing given, the answer is no. What I was saying is that there is the eye of the needle, which is the policy the Congress has created for us, and included in that is spectrum policy. And we are in the middle of a rather serious, dramatic process to make sure spectrum is being put to its most efficient use. And that is a policy issue that ought to be considered when you are looking on a case-by-case basis at any [foregin ownership] proposals that come in."
Other issues to take into account, he said, include national security, media diversity, and localism.
In teeing up the item, the Media Bureau praised broadcasting, saying it "occupied a vital role in the daily lives of Americans."
While the vote was unanimous, new Republican Commissioner Michael O'Rielly came out swinging, though with padded gloves. He said that while he supported the item — particularly helping to remove trade barriers — it could have gone further. For instance, the FCC did not approve any guidelines for review or a streamlined process. He also chided the FCC for not moving more quickly — the proposal has been on the table for over a year — and talked about the deals that might have been done in the interim.
O'Rielly ended his statement with the exhortation to "stay strong for freedom," the same phrase he used to end his nomination hearing in the Senate.
The commissioners all talked about the decision's potential impact on media diversity by boosting access to capital. The item was teed up for a vote by former acting chairwoman Mignon Clyburn, who has made promoting media diversity one of her key issues.
"I am optimistic that this Declaratory Ruling will invigorate American broadcasting, increase minority ownership, and expand opportunities abroad for U.S. media companies," said Commissioner Ajit Pai. He pointed out that while a British company has a 45% stake in the nation's largest wireless carrier, the same company "is not allowed to hold a 45% stake in a single AM radio station in rural Kansas."
Commissioner Jessica Rosenworcel said that she supported the item because the de facto 25% hard cap was a historical aberration — the rules date from 1927 — and because it does not grant blanket waivers or allow foreign entities to wholly own broadcast licenses, so it is consistent with national security objectives.
The item also makes clear that the FCC will defer to the expertise of other agencies on issues of national security law enforcement, foreign policy and trade policy.
"NAB applauds the FCC for providing flexibility in Commission rules allowing increased foreign investment in broadcast TV and radio stations," the National Association of Broadcasters said in a statement. "We are especially pleased the FCC recognized that local broadcasters routinely provide ‘local news, Amber Alerts and public safety information' to serve our communities. Today's vote provides broadcasters greater access to capital that will allow local stations to continue our indispensable role as the primary purveyor of news, entertainment and lifeline information to the American people."
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.
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