On August 9, 2011, the Federal Communications Commission ("FCC") released a Notice of Proposed Rulemaking initiating a review of the FCC’s policies and procedures that apply to foreign ownership of common carrier radio station licensees – e.g., wireless licensees who provide phone service – and of aeronautical en route and aeronautical fixed radio station licensees pursuant to section 310(b)(4) of the Communications Act of 1934, as amended. The FCC seeks comment in this rulemaking on measures to revise and simplify its regulatory framework under section 310(b)(4). Initial comments are due 45 days after publication of the Notice in the Federal Register, and reply comments are 30 days thereafter.

Section 310 of the Act requires the FCC to review foreign investment in wireless common carrier and aeronautical radio station licenses and imposes specific restrictions on who may hold certain types of radio licenses. For example, Section 310(b)(4) establishes a 25 percent benchmark for investment interests by foreign individuals, corporations, and governments in U.S.-organized entities that directly or indirectly control a U.S. broadcast, common carrier, or aeronautical radio station licensee. Wireless licensees seeking FCC approval of foreign ownership under section 310(b)(4) have faced significant difficulties and expense in trying to ascertain their percentages of foreign ownership, citizenship and principal places of business of their investors, including individuals and entities that hold de minimis interests. Many licensees must also return to the FCC, repeatedly, to obtain subsequent approvals when foreign ownership exceeds the permitted limits of the earlier ruling.

The FCC is exploring several possible means to tailor the FCC’s oversight of foreign investment so as to reduce the section 310(b)(4) regulatory costs and burdens imposed on wireless carriers, provide greater transparency and more predictability with respect to the FCC’s filing requirements and review process, and to promote capital formation. The FCC seeks comment on a wide range of related issues, including various proposals to:

  • Revise and codify standards for Section 310(b)(4) determinations
  • Modify the framework for Section 310(b)(4) compliance by licensees
  • Reduce the burdens associated with filing Section 310(b)(4) Petitions for Declaratory Rulings
  • Streamline the filing and processing of Section 310(b)(4) Petitions for Declaratory Rulings
  • Transition from the current regulatory framework to any new framework adopted in this proceeding