Affirmatively Expand Permissible Foreign Ownership

For decades, extensive research and corresponding analysis have demonstrated the vast benefits of removing obstacles to international trade. Our experiences from previous trade agreements have demostrated the direct payoffs of removing or reducing artificial barriers plus protectionist measures. Among countless other benefits, increased trade has produced higher standards of living meant for Americans, expanded foreign markets for our products, reduced costs for services and goods. It’s also one area where several Republicans and Democrats in Congress and elsewhere, as well as the current Management, strongly agree. Fortunately, the Commission rate has the opportunity to further this bipartisan cause by reducing barriers to foreign investment in the U. T. communications marketplace. Let’s seize this moment!

The Communications Act already affords the Commission rate the flexibility to relax restrictions on foreign investment in certain radio licensees, which includes broadcast and commercial wireless. Specifically, current law prohibits greater than 25 % of foreign investment in a Oughout. S. entity that controls, straight or indirectly, a U. T. radio licensee, but only if the public interest would be served by the Commission rate refusing or revoking a license. In other words, the Commission is free to enable a higher foreign limit or waive the limit altogether, which was verified in the Commission’s unanimous November 2013 Declaratory Ruling. Disappointingly, the Commission rate declined, at that time, to make such a positive step, deciding only to confirm that demands from current or prospective transmitted licensees seeking approval for foreign investment above the threshold will be considered on a case-by-case basis. What we need is to get the ball rolling simply by setting rules and policies that affirmatively permit foreign ownership over the 25 percent cap once and for all.

The case to get rid of the shackles on foreign investment decision in U. S. companies will be exceptionally strong. First and foremost, U. T. companies, especially smaller ones, stand to benefit from new sources of capital necessary in the super-challenging, ever-changing, consumer-centric, competitive environment that is the U. T. marketplace. From the thousands of exhibitors at the International Consumer Electronics Show to the smaller sized Small Business Expo held a few weeks ago at the Commission and everywhere in between, the dreamers and risk-takers are in a big way focused on ways to obtain new avenues of funding. For the firms aiming to add new diverse voices to the market, the option of foreign investment rather than traditional capital lines, which have proven difficult to access in the past, would be very welcome. For struggling firms, such capital could act as life blood keeping the doors open or providing funding for growth and job creation. And, established companies will have a lot more capital options, thereby reducing their particular borrowing costs, which frees in the budget for product and service deployment. In some regards just having foreign capital as a possibility will be constructive.

Similarly important, the Commission’s past unwillingness to be receptive to greater foreign investment has been used as an excuse by other nations to retain indefensible trade barriers that harm Oughout. S. companies. As U. T. firms have tried to invest worldwide, they have run into legal and step-by-step roadblocks by foreign governments. In most cases, the responding countries have used the differences between how the U. S. considers foreign ownership and other nations. Just look at some of the countries that allow greater foreign investment in marketing communications: United Kingdom, 100 percent; South Korea, forty-nine percent; Mexico, 49 percent; plus India, 74 percent. Note that also China holds itself out as allowing 49 percent (although internal practices and barriers suggest otherwise). If we want U. S. companies to be able to invest internationally and take advantage of globe markets, which can provide significant profits on investment, build natural partners for greater U. S. marketing communications industry growth, and allow international diversity, we need to be willing to remove any perception that the U. S. is not willing to approve greater foreign investment decision.

To date, the Commission’s new transmitted case-by-case process has been less than effective. Its passive nature hasn’t led to the filing of many applications, especially since the international perception is that the rhetoric may be positive but the expected outcome of any application would still be negative. In fact , the Declaratory Ruling made clear that it was just a restatement from the Commission’s approach, not putting out a welcome mat. As such, this didn’t provide the necessary comfort for those seeking to invest in U. S. marketing communications companies.

Another reason for the lack of progress is that it has been entangled in a side battle over an application seeking consent to the transfer of control of a radio stations station to Pandora Radio LLC. In that case, on which I take no position at this time, the Commission must decide whether Pandora should be allowed to hold a radio station permit. In order to do so , Pandora, a Oughout. S. company, must show that its parent company’s percentage associated with foreign shareholders is sufficiently beneath the 25 percent benchmark. The record indicates that while Pandora estimates its foreign investment in the 15-17 percent range, like all publicly-traded companies generally, it cannot establish the identity, let alone the nationality from the majority of its shareholders. Thus, the application sits.

Without judging the merits from the pending petition or application, it seems reasonable in our global marketplace to utilize another measurement, including the possibility of a representative sample size to evaluate foreign ownership. To require publicly-traded U. T. companies to identify and supply to the FCC the precise details of their shareholder make-up, which can change on a daily or even hourly basis, does not comport with all the highly dynamic electronic and worldwide nature of capital markets. On any given day, does GM or even GE know the nationality of each from the shareholders? What about our national protection companies, like Lockheed or Common Dynamics, which certainly hold an essential place in our nation’s security?

Moreover, growing foreign investment in broadcast could be accomplished without jeopardizing or intimidating national security in any way. Just like within the Declaratory Ruling, the Commission really does retain the ongoing ability to closely study and reject, as necessary, any application that presents concerns to the national security agencies. One option would be to automatically grant applications unless of course, and only if, a very simplified submitting necessitates further review for nationwide security reasons. Alternatively, as I have got previously suggested, we could establish a presumption that the applications should be granted, therefore shifting the burden on the Commission to reject. And any national protection review of foreign investment in both transmitted and wireless licensees can have a a lot more formalized process, including time limits to ensure a timely conclusion.

Working together, Republicans and Democrats can expand foreign investment plus improve the growth projections for the Oughout. S. communications industry. By being willing to create real flexibility when it comes to the foreign investment requirements, the Commission rate would facilitate access to capital, expand the ability of U. S. companies to invest internationally, while at the same time preserve nationwide security protections.

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