Last week, the FCC issued a declaratory ruling concluding that its long-standing policies on foreign ownership of broadcast stations were misunderstood – “clarifying” its policy to make clear that, if alien ownership exceeds 25% of the holding company of a licensee, it may in fact be permissible. The Commission decided to adopt a case-by-case approach to determine if any proposed alien ownership in excess of 25% is in the public interest. It is unclear why the FCC made a point to say that this was just a clarification of a policy that has been viewed as a strict prohibition on alien ownership of broadcast properties where the indirect ownership was in excess of 25%. In the past, the FCC broadcast prohibition was viewed as all but absolute, even though the governing statute allows for the 25% threshold to be exceeded unless the FCC determined that such excess foreign ownership was not in the public interest and ownership in excess of 25% has been allowed (under the same statutory provision) for nonbroadcast services. Nevertheless, last week’s decision made clear that foreign ownership levels in broadcast holding companies beyond the 25% threshold were possible, but much else was left unclear in the decision.
As stated in the ruling, the foreign ownership limitations were adopted because of concerns that foreign owners who controlled the instruments of communication in a time of emergency could be a security threat. Moreover, in broadcasting, there was the fear that such foreign owners could disseminate propaganda to the citizens of the US. While times have changed and the risk of the dissemination of propaganda by broadcasting seems quaint when there are so many other ways to disseminate what might be called propaganda to the public, the FCC still regards this as a concern that needs to be evaluated in every case. At the FCC meeting where the order was adopted, and in the ruling itself, it was made very clear that, in the event of any application that proposes foreign ownership in excess of 25%, the Executive Branch of government (including Homeland Security) would have to approve the foreign ownership, concluding that it does not pose any threat to the United States. For foreign companies that want to invest in broadcasting, this is not the only question that remains unanswered.
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