FCC's O'Rielly Proposes Easing Broadcast Foreign Ownership Rules

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By Lydia Beyoud

March 3 — Loosening foreign ownership rules for broadcast media companies could be key in helping U.S companies pursue their own investments abroad, FCC Commissioner Michael O'Rielly said in a blog post.

Easing restrictions should include doing away with a case-by-case decision-making process the Federal Communications Commission adopted in a November 2013 declaratory ruling to determine whether to allow individual petitions to own more than 25 percent of a U.S. entity that controls a U.S. radio license, he said.

“To date, the Commission's new broadcast case-by-case process has been less than successful,” said O'Rielly, one of the commission's two Republican members. “Its passive nature hasn't resulted in the filing of many applications, especially since the international perception is that our rhetoric may be positive but the expected outcome of any application would still be negative.”

The FCC's reluctance to be receptive to greater foreign investment has been used as an excuse by other nations “to retain indefensible trade barriers that harm U.S. companies,” O'Rielly said in the March 3 post. Some countries may retaliate against U.S. investors by raising their own restrictions in response, thus restricting small businesses' access to capital and growth, he wrote.

“What we need is to get the ball rolling by setting rules and policies that affirmatively permit foreign ownership above the 25 percent cap once and for all,” O'Rielly said.

He noted that the issue has “been entangled in a side fight” over an application seeking consent to transfer control of a South Dakota radio station to Pandora Radio LLC, he said. While Pandora is a a U.S. company, it is being required to show that its parent's percentage of foreign shareholders is below the 25 percent threshold, O'Rielly said.

“Without judging the merits of the pending petition or application, it seems reasonable in our global marketplace to use another measurement, including the possibility of a representative sample size to evaluate foreign ownership,” he said. Requiring publicly traded U.S. companies to identify and supply the FCC with the details of their shareholder composition doesn't mesh with the dynamic and international nature of the markets, he said.

The issue could be a area of bipartisan consensus over thoughtful regulatory policy, O'Rielly said.

“Given the seismic changes in how people consume media, local broadcasters should have the option to access capital from additional sources to compete on an even footing with other industries,” a National Broadcasters Association spokesman told Bloomberg BNA by e-mail.

Text of O'Rielly's post is at http://www.fcc.gov/blog/affirmatively-expand-permissible-foreign-ownership.