Every four years, the FCC is required by Congressional mandate to review its' broadcast ownership rules to determine if they still serve the public interest. One rule that has never been reevaluated is that pertaining to policies which have long been in place severely restricting ownership in U.S. broadcast stations by foreign entities, even those closely allied with the United States. It is time to do so.
Almost 100 years ago, due to fears resulting from foreign control of coastal telegraph stations on the Eastern seaboard during a period when wartime concerns were rapidly developing, the Congress instituted the first restrictions on foreign ownership of communications facilities. Fifteen years later, in the Radio Act of 1927, the Congress carried forward these restrictions in the predecessor provisions of Section 310(b) of the Communications Act. In the entirety of the legislative process from 1912 until the passage of the Communications Act of 1934, Congress' sole concern was foreign dominance of international communications facilities during wartime.
Moreover, since 1934, both Congress and the FCC have removed strict foreign ownership prohibitions from every industry subject to the Commission's regulatory jurisdiction (or refused to extend them to other industries) save one: broadcasting -- an exception the FCC has never rationally explained, let alone justified. It is time to look again.
This process is finally underway. Last year, the Commission continued its march toward more relaxed foreign ownership regulation of the nation's "critical telecommunications infrastructure" (see Notice of Proposed Rulemaking in IB Docket No. 11-133, released August 9, 2011). This year, in its First Report and Order in that proceeding released August 17, 2012, the FCC adopted a policy of regulatory forbearance where foreign ownership is held through U.S.-organized entities that do not control the licensee. This is but a continuation of the basic policy shift adopted for all communications common carriers in the FCC's 1997 Foreign Carrier Participation Order.
Building on this increasing flexibility by the FCC, a coalition of major broadcast groups, headed by Univision Communications, asked the FCC in a letter dated August 31, to pronounce publicly that it would henceforth exercise the same statutory discretion and consider, in any particular case, whether the public interest would be served by extending the 1997 policy to broadcasters. Twenty-eight other U.S. companies and organizations signed onto the Letter Request, including CBS, Clear Channel and the Walt Disney Company. Although an FCC Public Notice requesting comment on the Letter Request is expected soon, Commissioner Ajit Pai has already signaled his support (see Remarks before the NAB Radio Show in Dallas, TX on September 19).
Indeed, no public harm has resulted from any of the numerous instances in which America's "critical telecommunications infrastructure" have largely been owned and controlled by foreign corporations (for example, T-Mobile), nor from the one instance where the Commission permitted an Australian company to own 99% of Fox Television. The so-called "presumption" against foreign ownership of broadcast stations cannot survive a factual record; nor should it.
The time has come for the FCC to follow its own enabling statute and come to terms with precisely where the public interest lies. We believe it is through adopting a new policy, premised on its 1997 Foreign Carrier Participation Order, which will (a) promote competition, (b) increase diverse viewpoints and minority ownership, (c) lower the cost of capital to U.S. firms, (d) place broadcasters on an even competitive plane domestically, and (e) open markets to U.S. companies abroad.