FCC Foreign Broadcast Ownership Waivers Backed in All Replies

The Wiley Rein law firm and three companies 20 percent owned by Australians proposed some additional changes beyond what the petition sought in the replies, posted Tuesday and Wednesday in docket 13-50 (http://bit.ly/12mGzj3). The August request by a coalition of broadcasters including CBS, Clear Channel, Disney and nonprofits was backed by all companies and organizations filing initial comments on a public notice on the petition (CD April 19 p7). Wiley Rein wants the commission to clarify that publicly traded broadcast companies, “as is permissible for common carriers, rely on addresses of record to certify compliance with Section 310(b)(4),” said the law firm with broadcast clients (http://bit.ly/16pqaAX). “Given that the statute applies equally to both broadcast licensees and common carriers, it is inconsistent and improper to impose on broadcast licensees more burdensome and costly requirements associated with obtaining and verifying information to assess foreign ownership.” The firm, which said it also has “financial institution” clients, cited the example of Vodafone and Verizon.

The Alaska radio station owners want the FCC to have a rebuttable presumption in favor of exceeding the 25 percent threshold if the funds are from a citizen of a country that’s in good standing with the U.S. That would exclude nations on “a U.S. Departments of State, Treasury or Commerce watch list,” that were “red flagged by the U.S. Departments of Homeland Security or Commerce” or have “other national security concerns on its face,” said Alaska Broadcast Communications, Juneau Alaska Communications and Texarkana Radio Center Licenses (http://bit.ly/130N52z). “Precedent” for such a presumption comes from the FCC’s rebuttable presumption “based on the foreign investment source’s alliance, treaty, and trade status in relation to the” U.S., the three companies said. “For years, the Commission has recognized a [rebuttable] presumption that foreign investment in telecommunications providers in excess of the 25 percent benchmark is in the public interest if it is from a nation that is a member of the World Trade Organization."

Concerns about putting broadcasters on equal footing with new and other media that lack such a ban on non-U.S. ownership above 25 percent also were mentioned in replies, as in initial comments. Cable networks, over-the-top video providers, Internet radio and “online access to a huge variety of news” was cited by the Coalition for Broadcast Investment (CBI) that made the petition. “Only broadcasters, among all these competing outlets, are subject to a rigid foreign-investment restriction,” said CBI (http://bit.ly/18qTIee). “In this competitive environment, there is no basis in fact or law for any assertion that the public interest would be harmed merely by considering higher levels of indirect foreign investment in broadcasters on a case-by-case basis.” Initial comments had also said cybersecurity wasn’t a likely concern.

"The Commission’s policy of safeguarding only the broadcast medium against potential foreign influence is obsolete,” said the Alaska broadcasters. “There is no logical national security rationale for distinguishing between broadcasting and other forms of communications media that are not subject to restrictions on foreign investment.” To NAB, “lessening this regulatory disparity would not only promote more robust competition in the communications marketplace, but also would allow broadcasters to invest more in their existing program services and ‘finance new offerings using digital technology,'” it said, citing initial comments by Adelante Media, a member of CBI. “This lack of opposition underscores the modest nature of the requested relief for a more flexible case-by-case review of foreign investment and ownership in broadcast properties,” said NAB (http://bit.ly/11YedNs).

Whether commissioners vote on any foreign broadcast ownership rule change or not, allowing waivers would probably be done by a formal action to provide public notice of a new tack, said an FCC official and an industry lawyer. They said it’s unclear if any rule change would be adopted under Acting Chairman Mignon Clyburn, and it may wait until there’s a permanent FCC leader. Tom Wheeler is being nominated for that job by President Barack Obama. (See separate report in this issue). “I'm guessing it’s a little bit controversial,” even though all organizations supported CBI, said broadcast lawyer David Silverman of Davis Wright, who represented the Alaskan broadcasters in the proceeding. “Otherwise it would have happened by now” before last year’s petition was filed, he said. “The media landscape has changed sufficiently that it would seem to justify changing their policy in that regard.” With the Internet and cable programming not “subject to ownership restrictions, there really is no reason to enforce it so strictly in the broadcast context,” said Silverman. He’s “cautiously optimistic” the policy will change once there’s a permanent chairman.

NAB was among those pointing to Pai and Rosenworcel’s statements in approving the order for streamlined reviews of some non-broadcast licensees. “Commissioners Rosenworcel and Pai both recognized that broadcasters would similarly benefit from increased foreign investment and urged swift action on CBI’s request.” Rosenworcel wasn’t “as definitive as Commissioner Pai, who said they should” likewise OK the petition, said Oxenford, representing the National Association of Media Brokers in the proceeding (http://bit.ly/12k2eMa), in an interview. The Asian American Justice Center, which also backed the petition (http://bit.ly/11elF6t), sees lack of “access to capital” among some minority- and women-owned stations as “an issue” that might be helped with the waivers, said Jason Lagria, senior staff attorney for media and telecom, in an interview. “Looking at it on a case-by-case basis, I think that’s OK” rather than the current no-waiver policy, he said.