On Friday, a coalition of national broadcast networks, radio and television station licensees, and community and consumer organizations filed a letter asking the Federal Communications Commission to clarify that it will no longer employ a presumptive ban on foreign investment above 25% in the parent companies of broadcast licensees. The Coalition for Broadcast Investment (the “Coalition”), which includes CBS, Disney, and such public interest organizations as the Minority & Media Telecommunications Council and the Latinos in Information Science and Technology Association, asked the FCC instead to consider on a case-by-case basis whether such a transaction is consistent with the public interest. The filing was reported on by Politico (subscription required), Multichannel News, and TVNewsCheck, among others.
The FCC has historically exercised its discretion to consider, and in many instances to allow, indirect foreign investment above the statutory benchmark in wireless common carriers, which are governed by the same statute. At the same time, the Commission has employed an irrebuttable presumption against equivalent investment in the broadcast context. The Coalition argues that this policy is inequitable, particularly when the FCC has liberalized foreign investment policies toward common carriers ― urging that broadcasters have the same ability to seek capital from foreign investment as other industry participants already have under the law.
The FCC historically justified its refusal even to consider exercising its statutory discretion to permit foreign investment above 25% in broadcast licensees with reference to concerns that foreign governments could disrupt communications during wartime or commandeer public opinion through propaganda aired on radio and television stations. The Coalition argues that technological and marketplace developments have obviated these concerns, noting that Americans today have access to local, national, and international news and information from numerous sources, including the Internet, mobile applications, video and audio streaming services, and cable and satellite programming networks. Moreover, according to the Coalition, the FCC’s routine on-the-merits review of indirect foreign investment in common carrier licensees, which includes close coordination with federal national security agencies, would ensure that U.S. security interests are taken into account with regard to each transaction.
The Coalition notes that the general policy of the United States is to encourage inbound foreign investment and argues that access to international capital markets would allow broadcasters better to meet their public interest obligations by providing new opportunities for minority businesses and entrepreneurs and infusing new capital into broadcast companies with which they can innovate and improve the services they offer their local communities.
Covington & Burling LLP represents the Coalition for Broadcast Investment with regard to this filing.
Edited on 9/5/12 to add link to filing.