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FCC Approves Pandora Waiver

Action clears way for KXMZ purchase

Saying its decision is in the public interest, the FCC has approved a waiver for Pandora so that its parent company, Pandora Media, can exceed the 25% foreign media ownership benchmark.

The approval clears the way for the Internet audio company to purchase KXMZ(FM), Rapid City, S.D., for $600,000 from Connoisseur Media. Pandora has been operating the station under a local marketing agreement since 2013.

The move was expected. Chairman Tom Wheeler said at the recent NAB Show he’s in favor of loosening foreign ownership limits, potentially increasing foreign investment in U.S. broadcast companies and vice-versa.

Pandora said when it announced the purchase it’s seeking to become a broadcast station owner in order to reduce its streaming royalty rates.

ASCAP objected to the deal, and both are involved in litigation over streaming royalty rates. Indeed, ASCAP told the agency that signing off on the transaction “could lead to the collapse of the collective copyright licensing system.”

The NAB didn’t take a position on the merits of Pandora’s petition but urged the commission to either begin a rulemaking or otherwise relax the “outdated” standard for showing compliance with the foreign media ownership benchmarks.

FCC Commissioner Ajit Pai agreed with the decision, noting the agency tied both itself and Pandora “in knots” over how the rule applied to the transaction, which he said was “absurd.”

“There is no evidence whatsoever in the record that the public interest would be harmed by allowing a publicly-traded company with widely dispersed foreign ownership to own an FM radio station in South Dakota,” Pai said.

Commissioner Michael O’Rielly, who also favored the deal, favors dropping the case-by-case decisions and setting rules that allow more foreign broadcast ownership.