Barriers to foreign investment in wireless and other U.S. telecom providers have been reduced significantly by the Federal Communications Commission ("FCC") in a recent ruling. Until now, proposed foreign investments had to go through a time-consuming FCC review process, and permissible investments were limited in size and scope.
Under the new FCC rules:
- Proposed investments will be subject to a streamlined regulatory review process. Instead of requiring FCC approval for every transaction, the new rules permit investors to obtain "blanket" approval that could cover multiple different investments with only post-closing reporting requirements.
- Limits on foreign investment will be relaxed. Investors from countries outside the World Trade Organization will have an easier time getting regulatory approval, and all investors will have an easier time getting approval for higher levels of investment than they can under the current rules.
- Investors will have more flexibility on how their interest in a U.S. carrier would be structured. For example, under the new rules, it will be easier to structure investments using a foreign entity's subsidiaries and affiliates on different deals going forward or on changed investments in a particular U.S. carrier.
- Expansion opportunities for U.S. carriers with approved foreign investment will be increased. Such carriers will no longer have to obtain separate FCC approval for providing new services or for serving new markets.