On April 18, 2013, the FCC announced streamlined policies and procedures for review of foreign ownership of U.S. companies holding common carrier wireless licenses and certain aeronautical radio licenses under Sections 310(b)(3) and 310(b)(4) of the Communications Act of 1934, as amended, 47 U.S.C. §§ 310(b)(3) and 310(b)(4). Specifically, the Commission:

  • Eliminated the distinction between foreign investment from WTO Member countries and non-WTO Member companies. Instead, the FCC will apply an "open entry standard" in assessment of all foreign investment under its Section 310(b)(3) forbearance approach;
  • Continue coordination with relevant Executive Branch agencies on all petitions for declaratory ruling and applications in which the applicant is owned by foreign entities in excess of of the limits set forth in Sections 310(b)(3) and 310(b)(4);
  • Streamlined review of foreign investment by:
    1. Requiring that petitioners identify only those foreign investors that would hold equity and/or voting interests of greater than five percent, and in certain situations, greater than ten percent;
    2. Allowing petitioners to request specific advance approval for any named foreign investor to increase its equity and/or voting interest at some future time; and
    3. Permitting petitioners, under Section 310(b)(4) to request specific approval for any named foreign investor that proposes to acquire a controlling interest or to increase the interest to 100 percent at some future time;
  • Issue new declaratory rulings allowing foreign ownership with a 100 percent aggregate allowance for unnamed and future foreign investors, provided that the licensee obtains approval before any foreign investor acquires an interest greater than five percent (or ten percent in certain situations);
  • Allow the licensee's "subsidiaries and affiliates" to rely on the licensee's foreign ownership ruling rather than having to file a new petition for declaratory ruling, if the foreign ownership of the licensee and subsidiary or affiliate are in compliance with the terms of the FCC ruling with respect to the licensee and FCC rules, generally;
  • Allow licensees to introduce new foreign-organized entities into the approved vertical ownership chain in certain cases without prior approval, provided that the new foreign-organized entity is under 100 percent common ownership and control with a previously-approved foreign investor; and
  • Eliminate the practice of issuing service- and geographic-specific rulings, and instead permit a licensee with a foreign ownership ruling to add new services and new geographic service areas without petitioning for declaratory ruling, approving the ownership structure anew.

These changes significantly ease the regulatory burden for U.S. wireless companies planning foreign ownership. Streamlining the process will encourage foreign investment and growth of U.S. carriers.