FCC Foreign Broadcast Ownership Waivers for Stakes Above 25 Percent Backed by All Commenting Groups
All companies and groups commenting backed a broadcast coalition’s clarification request (http://bit.ly/11eis79) (CD Feb 27 p14) for the FCC to allow on a case-by-case basis foreign investments in U.S. broadcasters exceeding 25 percent. Some individuals opposed the change. Many of the initial comments posted this week in docket 13-50 (http://bit.ly/10bzk2S) cited competition from new and other media not subject to the same rules. The commission hasn’t waived the 25 percent threshold for radio and TV-station ownership, though it has such procedures for telecom investments, said Nexstar (http://bit.ly/YQFt2C) and others. Cybersecurity and other concerns that may face wireless and wireline investments held by those outside the U.S. don’t apply to stations, said NAB (http://bit.ly/11nLv98).
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Thirty-one “national minority and civil rights” groups said they supported the August request by the Coalition for Broadcast Investment, a group that included CBS, Clear Channel, Disney and more than a dozen other owners of radio and TV stations. “Over the past several years, minority broadcast ownership has undergone a steep and unprecedented decline” largely because most U.S. banks and venture-capital firms that invested in small and mid-size broadcast deals “left the space entirely,” said the 31 groups. “Encouraging foreign investment in American broadcasting would also create reciprocal opportunities for American broadcasters to expand their footprints” into radio and TV outside the country, said the groups that included Asian American, Black and Puerto Rican chambers of commerce, Rainbow Push and Minority Media and Telecommunications Council. MMTC submitted the comments (http://bit.ly/17jZttE).
The Asian American Justice Center backed the coalition’s clarification request. The center cited “reciprocal opportunities for American broadcasters in foreign markets.” Its support doesn’t moot an April 9 request from the Leadership Conference on Civil and Human Rights, of which the center is a “partner,” for the FCC to release plans for Telecom Act Section 257 minority media ownership studies (CD April 12 p16), said the filing (http://bit.ly/11elF6t). The National Association of Black Owned Broadcasters didn’t submit comments. Executive Director Jim Winston, who had expressed concerns about foreign-ownership waivers (CD Sept 27 p2), had no comment Tuesday.
Adelante Media, NAB and Nexstar cited an array of new media that don’t face foreign-ownership restrictions, in backing the coalition’s request. They also said multichannel video programming distributors and cable channels aren’t subject to the caps. Adelante’s 18 radio stations “compete against Internet and services which aren’t even subject to the foreign ownership benchmark,” and its three TV stations have rivals including Apple, Facebook, Google, Hulu, Netflix, Twitter and Yahoo, said the company (http://bit.ly/ZYBb3A), like Nexstar part of the coalition that sought the clarification. Nexstar listed many of those rivals and news websites. The FCC in 1995 said a “strict” 25-percent cap wouldn’t apply to the telecom sector, and the “substantial expertise and tools to evaluate the merits of proposed foreign investment” can be used in a broadcast context, said Nexstar, owner of 48 full-power TV stations.
NAB said the agency “has full discretion” to OK such investments in broadcasters if it finds the public interest would be served. The agency has never exercised that discretion, said the association. “Regulatory parity alone” supports the broadcast coalition’s request, said NAB. Mobile DTV, 3D and ultra HD TV, digital, and other services “will require significant capital,” the group said. “Allowing the broadcast industry an opportunity to access new and additional sources of capital would enable broadcasters to develop and deploy new services more quickly and better keep pace with their cable, satellite and online competitors -- all of whom have greater ability to participate in capital markets worldwide.” Security concerns stem from not editorial control over broadcasts, but from the possibility foreigners will engage in cyberwarfare using wired and wireless networks, said NAB. “Any security-based concerns associated with allowing increased foreign investment must be allayed by the fact” that the request doesn’t address direct foreign ownership in broadcast licensees, but in parent companies, said NAB.
"The primary issue facing any prospective buyer of a broadcast station” and especially new entrants is access to capital to fund deals, said the National Association of Media Brokers (http://bit.ly/12k2eMa). “Many companies which provided capital to prospective new owners who were previously active in the broadcast marketplace have exited the industry. New sources of capital to take their place have been slow to develop.”