In November, the FCC changed its policy regarding the foreign ownership of broadcast stations. In its decision, about which we wrote here, it agreed to entertain applications seeking “alien ownership” exceeding the 25% limit for foreign ownership of broadcast stations that had previously been in place. In the modern communications era, with its diversity of media outlets, the Commission determined that the risk of increased foreign ownership was outweighed by the potential for new entrants into the broadcast industry, backed by new sources of capital from outside of the United States. The FCC did not adopt any blanket rules for permitting higher levels of alien ownership, but instead agreed to consider specific requests for a declaratory ruling on a case-by-case basis to show that foreign ownership of a broadcast station in excess of 25% was not contrary to the public interest. Despite the invitation to file such requests, as far as we know, none have been filed – until now, and that comes from what is perhaps an unexpected source – Pandora, which is best known as an Internet radio operator.
As we wrote several months ago, Pandora has sought to acquire an FM radio station that operates in the Rapid City, South Dakota radio market. Its application to acquire the station was opposed by ASCAP, who feared that Pandora would use its status as a broadcaster to ask for broadcaster rates negotiated by the Radio Music Licensing Committee (RMLC) for the public performance of ASCAP music. ASCAP based its opposition principally on the contention that Pandora had not proved that less than 25% of its stock was beneficially owned or controlled by foreign entities. Despite Pandora being a company founded in the US by US citizens, headquartered and operating almost exclusively in the US, and traded on the US stock exchanges, ASCAP contended that Pandora had not established that its ownership of a broadcast station would not violate the alien ownership rules. How could they make such an argument?
Continue Reading Pandora Files First Petition for Declaratory Ruling Under FCC’s Liberalized Foreign Ownership Rules for Broadcast Stations