In a decision released yesterday, the FCC issued a “remedial declaratory ruling” finding the change in control of stock in a company that owned broadcast stations did not offend the public interest, and that the approval of foreign ownership in the company that controlled broadcast stations above 25% (but capped at 49%) that was issued last year could stay in effect. The reason we’re bringing this case to your attention is because it highlights the specific limitations on a grant of FCC consent issue to foreign ownership above 25% in companies that control broadcast properties. As we wrote here, the FCC has set out specific rules for its approval of foreign investors who can acquire an interest above that level, and what those investors can do once they acquire their interest. What we did not emphasize in that article (or in other articles on this topic, like those here, here and here), only foreign ownership by specific individuals are approved in these declaratory rulings by the FCC. Only ownership by named foreign individuals is approved – not any foreign ownership of the company holding the broadcast interests. Where foreign ownership or control of a company that owns an interest in a company with broadcast stations changes, that change needs FCC approval, even if the same foreign entity still owns the stock but with different controlling owners. That is presumably so that the FCC can assess whether any ownership concerns are raised by any individual control party.
In this case, the broadcast company stock subject to the foreign ownership limits was held by a Trust administered by a Trust committee of Mexican citizens. The Trust was itself held by the Mexican banking subsidiary of a bank organized in the United Kingdom. The approval in this application was for the change in the bank holding the trust to a Mexican subsidiary of a Spanish bank. While the Trust committee stayed the same, the actual trust was held by a different foreign bank, triggering the need for this approval. This case reminds foreign companies who are approved to own more than 25% of a company controlling broadcast assets to be on the alert for any significant ownership or control changes, as those changes will require FCC approval.