The FCC admits its rules governing foreign ownership levels in broadcast licensees need clarifying. Now the commission will consider a proposal at its April meeting that would set out clear expectations about its review of foreign investment in broadcast licensees.
In a draft of the proposal, the commission said it hopes to reduce unnecessary burdens on broadcasters while continuing to protect the public interest, which includes national security, law enforcement, foreign policy and trade policy. It also aims to streamline review processes.
The FCC regulates foreign ownership in broadcast licensees, with limits on direct and indirect ownership. The usual 25% cap on foreign investment remains in place. However, the commission said over the last decade it has developed policies and precedent to implant foreign ownership rules but in some cases never codified them.
“That only makes it harder for entities to understand and navigate our rules, risks inconsistent outcomes and can needlessly raise costs,” the commission said in the draft.
A 2016 FCC order eased foreign ownership restrictions and allowed petitions for approval for up to 100% aggregate foreign voting and/or equity investment by foreign investors in a U.S. parent of a broadcast licensee, but the commission must sign off on certain benchmarks.
Part of Carr’s plan
The latest development appears to be another step in Chairman Brendan Carr’s quest to limit red tape for broadcasters. In comments on the proposal last week, he said unwritten rules only make it harder for entities to understand and navigate requirements.
“They risk inconsistent outcomes and they can needlessly raise costs. We therefore initiate a proceeding that looks at codifying our requirements while asking about eliminating any needless ones,” Carr wrote in his blog.
Foreign ownership in broadcast groups was frequently discussed under the previous FCC regime of Jessica Rosenworcel. Industry observers say radio broadcasters have increasingly looked to tap into foreign investment as a way to help bolster their cash reserves.
Foreign investment precedent
Most recently, the FCC agreed to temporarily waive the 25% cap on foreign ownership in order for Audacy to exit bankruptcy during its reorganization. However, the media company later withdrew the request when its level of foreign ownership fell below the threshold, as Radio World reported.
In another instance, the FCC in 2024 voted to allow Spanish Broadcasting System to exceed the usual 25% cap on foreign investment.
The commission also voted to modify its foreign ID sponsorship rules to prevent foreign propaganda from airing on American soil in 2024. Portions of the rules took effect last summer — though the NAB has tried to block those changes.
The FCC’s Notice of Proposed Rulemaking to be voted on later this month states the commission clearly supports robust foreign investment in U.S. companies and networks.
(Read the FCC’s NPRM on Clarifying Foreign Ownership Rules.)
“Importantly, foreign investment in our common carrier and broadcast licensees fosters technical innovation, creates jobs and ultimately increases U.S. economic growth. At the same time, we recognize that certain foreign investment, particularly from foreign adversary countries, may raise national security risks and other concerns,” the FCC said in the NPRM.
“The NPRM seeks comment on extending the commission’s methodology for determining foreign ownership levels and the remedial process for inadvertent violations of the foreign ownership benchmarks,” according to the draft of the proposal.
In addition, the draft proposes to codify existing policy regarding which entity is the controlling U.S. parent. The FCC will also seek comment on other potential opportunities to alleviate unnecessary regulatory burdens in the context of our foreign ownership review, according to the NPRM. Specifically for broadcast, it would seek comment on other foreign ownership considerations related to processing of NCE and LPFM stations.
The FCC draft of the proposal concludes: “The commission believes that the streamlining proposals and other options on which the commission seeks comment in this NPRM will reduce costs and burdens currently imposed on licensees, including those licensees that are small entities, and accelerate the foreign ownership review process, while continuing to ensure that the Commission has the information needed to carry out our statutory duties.”
The NAB recently launched a Modernize the Rules campaign to the urge the FCC to overhaul broadcast ownership regulations that the group says unfairly limit broadcasters’ ability to grow.
Though the group has historically advocated for policies that ease restrictions on foreign investment in U.S. broadcast companies, it isn’t a part of the modernization that NAB has been advocating for, according to an NAB spokesperson.
The FCC’s April meeting is scheduled for April 28. If the NPRM is formally adopted, an official comment deadline date will be established once the NPRM (GN Docket 25-149) is printed in the Federal Register.
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