The FCC yesterday released its first decision approving 100% foreign ownership of a group of US broadcast stations. This comes after significant relaxation of the FCC’s interpretation of the foreign ownership limits which, less than 4 years ago, had been interpreted to effectively prohibit foreign ownership of more than 25% of a company controlling broadcast licensees (see our article here about the 2013 decision to relax the restrictive policy). In yesterday’s decision, the FCC approved the application of an LLC controlled 100% by a husband and wife, both Australian citizens, to acquire complete control over several companies that are the licensees of 7 AMs, 8 FMs, 13 FM translators, and 1 TV translator in Alaska and Texarkana, Arkansas and Texas. The FCC’s approval requires that these individuals get FCC approval if any other foreign owners are added to their company, but otherwise imposes no other significant conditions on this acquisition. Given the simple 50/50 ownership of a husband and wife in a closely held company, the ownership reporting and analysis conditions imposed on public companies who have been allowed to exceed the 25% threshold in the past (see our article here and here) were not required in this case.
What is perhaps most interesting is just how routine this process has now become. Very recently, the FCC approved investment by a Cayman Islands based fund of more than 5%, up to 49%, of the ownership in Pandora (which owns a company that holds a radio station). These approvals come on top of several other acquisitions by foreign investors of non-controlling interests in broadcast licensees. As long as these owners are approved by various US government agencies as not presenting security risks, the approvals don’t seem to be an FCC issue. The FCC noted in yesterday’s order that allowing this kind of foreign ownership brings new sources of capital into the US broadcasting industry, and may encourage other countries to relax their ownership rules to allow investment by US companies in broadcast companies serving other countries. What a difference a few years can make!