The FCC voted unanimously Thursday to approve a declaratory ruling that makes it clear the 25% benchmark or cap on foreign investment in U.S. broadcast companies is a guideline only and the agency will consider, on a case-by-case basis, deals that would include a larger percentage of such foreign investment.
FCC officials believe more guidelines on foreign broadcaster ownership will be developed over time and such decisions will be made with deference to federal agencies for national security and trade issues. The 25% constraint stemmed from the 1920s, when Congress was worried about foreign governments using broadcast transmitters to disrupt U.S. communications.
In the meantime, commissioners said the change would spur investment in U.S. broadcast companies and afford U.S. broadcasters more opportunities overseas and increase access to capital for would-be female and minority station owners.
In his first public commission meeting as chairman, Tom Wheeler said the change will be “far from a rubber stamp” in okaying the deals.
Commissioner Ajit Pai, who called on the FCC to modernize the broadcast ownership rules a year ago, said, until now, foreign investors have been allowed to own large portions of U.S. satellite, cable and Internet companies, but not broadcast companies. The result, he said, is “A British company has (at least for the time being) a 45% stake in our nation’s largest wireless carrier, but that same British company is not allowed to hold a 45% stake in a single AM radio station in rural Kansas.”
While voting for the change, new GOP Commissioner Michael O’Rielly said the commission could have gone further, such as providing more guidance or setting a new threshold.