Review of Foreign Ownership Policies for Common Carrier and Aeronautical Radio Licensees, 50628-50630 [2012-20704]
Download as PDF
<![CDATA[
50628
Federal Register / Vol. 77, No. 163 / Wednesday, August 22, 2012 / Rules and Regulations
Location and case
No.
State and county
Date and name of newspaper
where notice was published
Chief executive officer of community
Effective date of
modification
Community
No.
The Honorable Peggy Noland, Mayor,
City of Deerfield Beach, 150 Northeast
2nd Avenue, Deerfield Beach, FL
33441.
The Honorable Roseann Minnet, Mayor,
Town of Lauderdale-By-The-Sea, 4501
Ocean Drive, Lauderdale-By-The-Sea,
FL 33308.
November 22, 2011 ........
125101
October 26, 2011 ...........
125123
Broward (FEMA
Docket No.:
B–1248).
City of Deerfield
Beach (12–04–
0283P).
December 2, 2011; December
9, 2011; The Sun-Sentinel.
Broward (FEMA
Docket No.:
B–1248).
Town of LauderdaleBy-The-Sea (11–
04–7642P).
November 3, 2011; November
10, 2011; The Sun-Sentinel.
City of Richmond Hill
(11–04–4401P).
December 7, 2011; December
14, 2011; The Bryan County
News.
The Honorable E. Harold Fowler, Mayor,
City of Richmond Hill, 40 Richard Davis
Drive, Richmond Hill, GA 31324.
November 29, 2011 ........
130018
Unincorporated
areas of Dare
County (11–04–
5020P).
September 8, 2011; September
15, 2011; The Coastland
Times.
The Honorable Warren Judge, Chairman,
Dare County Board of Supervisors, 954
Marshall C. Collins Drive, Manteo, NC
27954.
August 30, 2011 .............
375348
Georgia:
Bryan (FEMA
Docket No.:
B–1253).
North Carolina:
Dare (FEMA
Docket No.:
B–1244).
(Catalog of Federal Domestic Assistance No.
97.022, ‘‘Flood Insurance.’’)
AGENCY:
inspection and copying during normal
business hours in the FCC Reference
Information Center, Portals II, 445 12th
Street SW., Washington, DC 20554. The
complete text may also be purchased
from the Commission’s duplicating
contractor, Best Copy and Printing, Inc.,
Portals II, 445 12th Street SW., Room
CY–B402, Washington, DC 20554,
telephone: (800) 378–3160, fax: (202)
488–5563, or via its web site, https://
www.bcpiweb.com. The complete text
also is available on the Commission’s
Web site at https://hraunfoss.fcc.gov/
edocs_public/attachmatch/FCC-1293A1.pdf. To request the document in
accessible formats for people with
disabilities (Braille, large print,
electronic files, audio format), send an
email to fcc504@fcc.gov or call the
Consumer & Governmental Affairs
Bureau at 202–418–0530 (voice), 202–
418–0432 (tty).
In this document, the
Commission adopts a new approach to
its review of foreign ownership in
common carrier radio station licensees,
where the foreign ownership is held in
the licensee through U.S.-organized
entities that do not control the licensee.
This action responds to pleadings filed
in response to the Notice of Proposed
Rulemaking initiating this docket and to
the Public Notice in this docket seeking
further comment on the new approach.
DATES: Effective August 22, 2012.
FOR FURTHER INFORMATION CONTACT:
Kathleen Collins or Susan O’Connell,
Policy Division, International Bureau,
FCC, (202) 418–1460 or via the Internet
at Kathleen.Collins@fcc.gov and
Susan.O’Connell@fcc.gov
SUPPLEMENTARY INFORMATION: This is a
summary of the Commission’s First
Report and Order in IB Docket No. 11–
133, FCC 12–93, adopted August 17,
2012, and released August 17, 2012. The
full text of this document is available for
Summary of First Report and Order
1. On April 11, 2012, the International
Bureau, on behalf of the Commission,
issued a Public Notice in this docket (77
FR 24452, April 24, 2012) inviting
comment on the legal and policy
implications of forbearing under section
10 of the Communications Act of 1934,
as amended (the Act), 47 U.S.C. 160,
from applying section 310(b)(3) of the
Act to certain foreign ownership
interests in common carrier licensees,
where those interests are held through
U.S.-organized entities that do not
control the licensee. The First Report
and Order forbears, pursuant to section
10(a) of the Act, from applying the 20
percent foreign ownership limit set forth
in section 310(b)(3) of the Act to the
class of common carrier licensees in
which foreign ownership in the licensee
is held through U.S.-organized entities
that do not control the licensee, to the
extent the Commission determines such
foreign ownership is consistent with the
public interest under the policies and
procedures the Commission has adopted
Dated: August 8, 2012.
Sandra K. Knight,
Deputy Associate Administrator for
Mitigation, Department of Homeland
Security, Federal Emergency Management
Agency.
[FR Doc. 2012–20632 Filed 8–21–12; 8:45 am]
BILLING CODE 9110–12–P
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Parts 1 and 25
[IB Docket No. 11–133; FCC 12–93]
Review of Foreign Ownership Policies
for Common Carrier and Aeronautical
Radio Licensees
Federal Communications
Commission.
ACTION: Final rule.
wreier-aviles on DSK7SPTVN1PROD with RULES
SUMMARY:
VerDate Mar<15>2010
16:23 Aug 21, 2012
Jkt 226001
PO 00000
Frm 00068
Fmt 4700
Sfmt 4700
for the public interest review of foreign
ownership subject to section 310(b)(4) of
the Act. The First Report and Order
refers to this class of licensees as
‘‘licensees subject to section 310(b)(3)
forbearance.’’ The forbearance approach
applies only to such foreign ownership
in common carrier licensees and not to
broadcast or other licensees covered by
section 310(b)(3). Nor does the approach
apply to foreign ownership held in a
licensee other than indirectly through
an intervening U.S.-organized entity
that does not control the licensee.
2. Section 10(a) of the Act enables the
Commission to forbear from applying
any regulation or any provision of the
Act to a telecommunications carrier or
service, or a class of
telecommunications carriers or services,
if the Commission determines that
forbearances satisfies the following
three-pronged test: (1) Enforcement of
such regulation or provision is not
necessary to ensure that the charges,
practices, classifications, or regulations
by, for, or in connection with that
telecommunications carrier or
telecommunications service are just and
reasonable and are not unjustly or
unreasonably discriminatory; (2)
enforcement of such regulation or
provision is not necessary for the
protection of consumers; and (3)
forbearance from applying such
provision or regulation is consistent
with the public interest. 47 U.S.C.
160(a).
3. The First Report and Order finds
that forbearing from applying section
310(b)(3)’s 20 percent foreign equity and
voting limits to the class of common
carrier licensees in which foreign
interests in the licensee are held
through U.S.-organized entities that do
not control the licensee, to the extent
such foreign ownership serves the
public interest as determined under the
E:\FR\FM\22AUR1.SGM
22AUR1
wreier-aviles on DSK7SPTVN1PROD with RULES
Federal Register / Vol. 77, No. 163 / Wednesday, August 22, 2012 / Rules and Regulations
policies and procedures the
Commission uses for assessing foreign
ownership of the controlling U.S.organized parents of common carrier
licensees under section 310(b)(4),
satisfies each of the three section 10
criteria. The First Report and Order
requires licensees subject to section
310(b)(3) forbearance to file a petition
for declaratory ruling or similar request
to obtain Commission approval before
foreign ownership held in the licensee
through U.S.-organized entities that do
not control the licensee, together with
foreign ownership held in the licensee
itself, exceeds 20 percent of the
licensee’s equity interests and/or 20
percent of its voting interests.
4. In the First Report and Order, the
Commission concludes that, under the
first prong of section 10, it is not
necessary to apply the foreign
ownership limits in section 310(b)(3) to
licensees subject to section 310(b)(3)
forbearance to ensure that their charges
and practices are just and reasonable
and not unjustly or unreasonably
discriminatory. Based on the
Commission’s experience in applying its
policies under section 310(b)(4), the
Commission finds no evidence that the
foreign ownership of a common carrier
licensee, in and of itself, is directly
relevant to the carrier’s compliance with
the requirements of sections 201 and
202 of the Act that charges, practices,
classifications, and regulations be just
and reasonable and not unjustly or
unreasonably discriminatory. In
addition, the Commission has other,
more tailored tools at its disposal, such
as section 201, 202, and 208 of the Act,
to ensure that rates, practices and
classifications of common carrier
licensees are just and reasonable and
not unjustly or unreasonably
discriminatory.
5. The Commission also concludes
that, under the section prong of section
10, it is unnecessary for the protection
of consumers to apply section
310(b)(3)’s 20 percent limit to foreign
interests in licensees subject to section
310(b)(3) forbearance. Under the
forbearance approach, the Commission
will give notice and seek public
comment on a petition for declaratory
ruling or similar request asking for
approval of proposed foreign equity
and/or voting interests in a common
carrier licensee over 20 percent. This
notice and comment process will inform
any Commission decision to grant a
petition for declaratory ruling to exceed
section 310(b)(3)’s 20 percent limit and
allow the Commission to assess any
potential harm to consumers.
6. The Commission concludes, under
the third prong of section 10, that the
VerDate Mar<15>2010
15:22 Aug 21, 2012
Jkt 226001
public interest would be served by not
applying the foreign ownership limit of
section 310(b)(3) to licensees subject to
section 310(b)(3) forbearance—where
the licensee has greater than 20 percent
foreign ownership held through U.S.organized entities that do not control
the licensee—for the same reasons that
the public interest is served when the
Commission allows, under section
310(b)(4), greater than 25 percent
foreign ownership in the controlling
U.S.-organized parent of a common
carrier licensee under otherwise
identical circumstances. In the context
of common carrier licensees, the
Commission discerns no public interest
distinction between the two situations.
7. By incorporating the Commission’s
section 310(b)(4) policies and
procedures, the forbearance approach
will protect the national security
objectives underlying the Act. These
policies and procedures provide
Executive Branch expert agencies the
opportunity to review proposed foreign
ownership in the controlling U.S.organized parents of common carrier
licensees for any national security, law
enforcement, or public safety issues.
The forbearance approach will provide
the Executive Branch agencies the same
opportunity to assess proposed foreign
ownership in licensees subject to
section 310(b)(3) forbearance.
8. In addition, the forbearance
approach will ensure that foreign
ownership from World Trade
Organization (WTO) Member countries
will be reviewed under the
Commission’s open entry standard,
whether the foreign investment is held
through U.S.-organized entities that
control the licensee or through U.S.organized entities that do not control
the licensee. The forbearance approach
also comports with commenters’ request
in this docket that the Commission treat
all ‘‘indirect’’ foreign ownership in a
common carrier licensee in a manner
consistent with the Commission’s
section 310(b)(4) policies and
procedures so as to further the
objectives of the WTO Basic Telecom
Agreement. Conforming the
Commission’s foreign ownership
policies for sections 310(b)(3) and
310(b)(4) will clarify and simplify
Commission regulation of foreign
ownership of common carrier licensees.
The forbearance approach also will
enhance competitive market conditions
for common carrier licensees by
allowing them and their potential
owners to structure foreign investment
in the licensee in a manner that best
accommodates their financial
considerations and business needs.
PO 00000
Frm 00069
Fmt 4700
Sfmt 4700
50629
9. The forbearance approach requires
a licensee to file a petition for
declaratory ruling or similar request
seeking Commission approval before
foreign ownership held in the licensee
through U.S.-organized entities that do
not control the licensee, together with
foreign ownership held in the licensee
itself, exceeds 20 percent of the
licensee’s equity interests and/or 20
percent of its voting interests. The
Commission, or the International
Bureau on delegated authority, will
place the request on notice for public
comment and forward the petition to the
Executive Branch agencies for review.
Following conclusion of this process,
the Commission, or the International
Bureau on delegated authority, will
issue a declaratory ruling as to whether
the proposed foreign ownership is in the
public interest. The licensee shall not be
allowed to have foreign ownership
under section 310(b)(3) in excess of 20
percent unless and until the
Commission or the International Bureau
has granted the licensee’s request.
10. The Commission finds that the
benefits of adopting the forbearance
approach outweigh the costs. By
forbearing from applying the section
310(b)(3) foreign ownership limit to the
subject class of common carrier
licensees, licensees and their potential
owners will have flexibility in the
structuring of their investment, free of a
statutory constraint. The Commission
anticipates that the costs of the approval
process for proposed foreign ownership
of licensees subject to section 310(b)(3)
forbearance will be far less for licensees
than the costs they have to incur in
structuring their investments to comply
with the section 310(b)(3) limit.
Moreover, under the forbearance
approach, the approval process will be
consistent with the Commission’s policy
framework for foreign ownership of the
controlling U.S. parents of licensees
under section 310(b)(4). For these
reasons, the Commission expects this
approach to reduce unnecessary costs
and burdens on common carrier
licensees. Finally, the forbearance
approach will not compromise the
Commission’s ability to carry out its
statutory duties under section 310(b) of
the Act, including protection of national
security and law enforcement interests.
11. The First Report and Order defers
consideration, to a later stage of the
proceeding, of the comments urging the
Commission to simplify the section
310(b)(4) requirements and apply those
revised requirements to the evaluation
of foreign interests in a common carrier
licensee held through U.S.-organized
entities that do not control the licensee.
E:\FR\FM\22AUR1.SGM
22AUR1
50630
Federal Register / Vol. 77, No. 163 / Wednesday, August 22, 2012 / Rules and Regulations
wreier-aviles on DSK7SPTVN1PROD with RULES
Regulatory Flexibility Certification
12. The Regulatory Flexibility Act of
1980, as amended (RFA),1 requires that
a regulatory flexibility analysis be
prepared for notice-and-comment rule
making proceedings, unless the agency
certifies that ‘‘the rule will not, if
promulgated, have a significant
economic impact on a substantial
number of small entities.’’ 2 The RFA
generally defines the term ‘‘small
entity’’ as having the same meaning as
the terms ‘‘small business,’’ ‘‘small
organization,’’ and ‘‘small governmental
jurisdiction.’’ 3 In addition, the term
‘‘small business’’ has the same meaning
as the term ‘‘small business concern’’
under the Small Business Act.4 A
‘‘small business concern’’ is one which:
(1) Is independently owned and
operated; (2) is not dominant in its field
of operation; and (3) satisfies any
additional criteria established by the
Small Business Administration (SBA).
13. The approach adopted in the First
Report and Order will remove a
statutory constraint on common carrier
licensees, by forbearing from applying
the 20 percent ownership limit under
section 310(b)(3) to the class of common
carrier licensees in which the foreign
ownership is held in the licensee
through intervening U.S.-organized
entities that do not control the licensee.
Instead of prohibiting foreign ownership
in excess of 20 percent under section
310(b)(3), the Commission will assess
whether the proposed foreign
ownership in excess of 20 percent is in
the public interest through an approval
process that is consistent with its
policies and procedures for approval of
foreign ownership in a U.S.-organized
entity that controls a licensee, under
section 310(b)(4). The Commission
believes that the new approach will
reduce costs and burdens currently
imposed on common carrier licensees,
including those licensees that are small
entities, while continuing to ensure that
the Commission has the information it
needs to carry out its statutory duties.
Therefore, the Commission certifies that
1 See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601–
612, has been amended by the Small Business
Regulatory Enforcement Fairness Act of 1996,
Public Law 104–121, Title II, 110 Stat. 857 (1996).
2 5 U.S.C. 605(b).
3 5 U.S.C. 601(6).
4 5 U.S.C. 601(3) (incorporating by reference the
definition of ‘‘small business concern’’ in the Small
Business Act, 15 U.S.C. 632). Pursuant to 5 U.S.C.
601(3), the statutory definition of a small business
applies ‘‘unless an agency, after consultation with
the Office of Advocacy of the Small Business
Administration and after opportunity for public
comment, establishes one or more definitions of
such term which are appropriate to the activities of
the agency and publishes such definitions(s) in the
Federal Register.’’
VerDate Mar<15>2010
15:22 Aug 21, 2012
Jkt 226001
the new approach will not have a
significant economic impact on a
substantial number of small entities.
The Commission will send a copy of the
First Report and Order, including a copy
of this Regulatory Flexibility
Certification, to the Chief Counsel for
Advocacy of the SBA.5 This certification
also will be published in the Federal
Register.6
Paperwork Reduction Act of 1995
Analysis
14. The First Report and Order does
not contain new or modified
information collection requirements
subject to the Paperwork Reduction Act
of 1995, Public Law 104–13. The
information collection requirements for
the section 310(b) foreign ownership
approval process are included in OMB
Control No. 3060–0686. In addition,
therefore, this document does not
contain any new or modified
information collection burden for small
business concerns with fewer than 25
employees, pursuant to the Small
Business Paperwork Relief Act of 2002,
Public Law 107–198, see 44 U.S.C.
3506(c)(4).
Report to Congress
15. The Commission has included a
copy of the First Report and Order in a
report sent to Congress and the
Government Accountability Office
pursuant to the Congressional Review
Act. See 5 U.S.C. 801(a)(1)(A).
Ordering Clauses
16. It is ordered, pursuant to sections
1, 2, 4(i), 4(j), 5(c), 10, 303(r), 308(b),
309, 310(b), 310(d), and 403 of the
Communications Act of 1934, as
amended, 47 U.S.C. 151, 152, 154(i),
154(j), 155(c), 160, 303(r), 308(b), 309,
310(b), 310(d), and 403, that the First
Report and Order in IB Docket No. 11–
133 IS ADOPTED.
17. It is further ordered that the
requirements of this First Report and
Order shall be effective upon
publication in the Federal Register.7
18. It is further ordered that the
Commission’s Consumer and
Governmental Affairs Bureau, Reference
Information Center, shall send a copy of
this Report and Order, including the
Regulatory Flexibility Certification, to
55
U.S.C. 605(b).
6 Id.
7 See 47 CFR 1.103, 1.427(b). As set forth above,
by forbearing from applying the strict section
310(b)(3) foreign ownership limit to the subject
class of common carrier licensees, we afford these
licensees and their potential owners greater
flexibility in the structuring of their investment,
free of a statutory constraint. Our action thereby
‘‘relieves a restriction’’ within the meaning of 5
U.S.C. 553(d)(1).
PO 00000
Frm 00070
Fmt 4700
Sfmt 4700
the Chief Counsel for Advocacy of the
Small Business Administration.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2012–20704 Filed 8–21–12; 8:45 am]
BILLING CODE 6712–01–P
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Part 73
[MB Docket No. 12–51; RM–11647; DA 12–
1260]
Radio Broadcasting Services;
Westfield, NY
Federal Communications
Commission.
ACTION: Final rule.
AGENCY:
The Audio Division, at the
request of Connoisseur Media of Erie,
LLC, allots Channel 265A at Westfield,
New York, as its first local transmission
service. Channel 265A can be allotted to
Westfield consistent with the minimum
distance separation requirements of the
Rules with a site restriction 3.4
kilometers (2.1 miles) west of the
community. The reference coordinates
are 42–18–51 NL and 79–37–04 WL.
The allotment of Channel 265A at
Westfield is located 320 kilometers (199
miles) from the Canadian border.
Therefore, Canadian concurrence has
been requested and approved by the
Canadian government.
DATES: Effective September 17, 2012.
FOR FURTHER INFORMATION CONTACT:
Rolanda F. Smith, Media Bureau, (202)
418–2700.
SUPPLEMENTARY INFORMATION: This is a
synopsis of the Commission’s Report
and Order, adopted August 2, 2012, and
released August 3, 2012. The full text of
this Commission decision is available
for inspection and copying during
normal business hours in the FCC’s
Reference Information Center at Portals
II, CY–A257, 445 12th Street SW.,
Washington, DC 20554. This document
may also be purchased from the
Commission’s duplicating contractors,
Best Copy and Printing, Inc., 445 12th
Street SW., Room CY–B402,
Washington, DC 20554, telephone 1–
800–378–3160 or via email
www.BCPIWEB.com. This document
does not contain proposed information
collection requirements subject to the
Paperwork Reduction Act of 1995,
Public Law 104–13. The Commission
will send a copy of this Report and
Order in a report to be sent to Congress
and the Government Accountability
SUMMARY:
E:\FR\FM\22AUR1.SGM
22AUR1
]]>Agencies
[Federal Register Volume 77, Number 163 (Wednesday, August 22, 2012)]
[Rules and Regulations]
[Pages 50628-50630]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-20704]
=======================================================================
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 1 and 25
[IB Docket No. 11-133; FCC 12-93]
Review of Foreign Ownership Policies for Common Carrier and
Aeronautical Radio Licensees
AGENCY: Federal Communications Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: In this document, the Commission adopts a new approach to its
review of foreign ownership in common carrier radio station licensees,
where the foreign ownership is held in the licensee through U.S.-
organized entities that do not control the licensee. This action
responds to pleadings filed in response to the Notice of Proposed
Rulemaking initiating this docket and to the Public Notice in this
docket seeking further comment on the new approach.
DATES: Effective August 22, 2012.
FOR FURTHER INFORMATION CONTACT: Kathleen Collins or Susan O'Connell,
Policy Division, International Bureau, FCC, (202) 418-1460 or via the
Internet at Kathleen.Collins@fcc.gov and Susan.O'Connell@fcc.gov
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's First
Report and Order in IB Docket No. 11-133, FCC 12-93, adopted August 17,
2012, and released August 17, 2012. The full text of this document is
available for inspection and copying during normal business hours in
the FCC Reference Information Center, Portals II, 445 12th Street SW.,
Washington, DC 20554. The complete text may also be purchased from the
Commission's duplicating contractor, Best Copy and Printing, Inc.,
Portals II, 445 12th Street SW., Room CY-B402, Washington, DC 20554,
telephone: (800) 378-3160, fax: (202) 488-5563, or via its web site,
https://www.bcpiweb.com. The complete text also is available on the
Commission's Web site at https://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-12-93A1.pdf. To request the document in accessible
formats for people with disabilities (Braille, large print, electronic
files, audio format), send an email to fcc504@fcc.gov or call the
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).
Summary of First Report and Order
1. On April 11, 2012, the International Bureau, on behalf of the
Commission, issued a Public Notice in this docket (77 FR 24452, April
24, 2012) inviting comment on the legal and policy implications of
forbearing under section 10 of the Communications Act of 1934, as
amended (the Act), 47 U.S.C. 160, from applying section 310(b)(3) of
the Act to certain foreign ownership interests in common carrier
licensees, where those interests are held through U.S.-organized
entities that do not control the licensee. The First Report and Order
forbears, pursuant to section 10(a) of the Act, from applying the 20
percent foreign ownership limit set forth in section 310(b)(3) of the
Act to the class of common carrier licensees in which foreign ownership
in the licensee is held through U.S.-organized entities that do not
control the licensee, to the extent the Commission determines such
foreign ownership is consistent with the public interest under the
policies and procedures the Commission has adopted for the public
interest review of foreign ownership subject to section 310(b)(4) of
the Act. The First Report and Order refers to this class of licensees
as ``licensees subject to section 310(b)(3) forbearance.'' The
forbearance approach applies only to such foreign ownership in common
carrier licensees and not to broadcast or other licensees covered by
section 310(b)(3). Nor does the approach apply to foreign ownership
held in a licensee other than indirectly through an intervening U.S.-
organized entity that does not control the licensee.
2. Section 10(a) of the Act enables the Commission to forbear from
applying any regulation or any provision of the Act to a
telecommunications carrier or service, or a class of telecommunications
carriers or services, if the Commission determines that forbearances
satisfies the following three-pronged test: (1) Enforcement of such
regulation or provision is not necessary to ensure that the charges,
practices, classifications, or regulations by, for, or in connection
with that telecommunications carrier or telecommunications service are
just and reasonable and are not unjustly or unreasonably
discriminatory; (2) enforcement of such regulation or provision is not
necessary for the protection of consumers; and (3) forbearance from
applying such provision or regulation is consistent with the public
interest. 47 U.S.C. 160(a).
3. The First Report and Order finds that forbearing from applying
section 310(b)(3)'s 20 percent foreign equity and voting limits to the
class of common carrier licensees in which foreign interests in the
licensee are held through U.S.-organized entities that do not control
the licensee, to the extent such foreign ownership serves the public
interest as determined under the
[[Page 50629]]
policies and procedures the Commission uses for assessing foreign
ownership of the controlling U.S.-organized parents of common carrier
licensees under section 310(b)(4), satisfies each of the three section
10 criteria. The First Report and Order requires licensees subject to
section 310(b)(3) forbearance to file a petition for declaratory ruling
or similar request to obtain Commission approval before foreign
ownership held in the licensee through U.S.-organized entities that do
not control the licensee, together with foreign ownership held in the
licensee itself, exceeds 20 percent of the licensee's equity interests
and/or 20 percent of its voting interests.
4. In the First Report and Order, the Commission concludes that,
under the first prong of section 10, it is not necessary to apply the
foreign ownership limits in section 310(b)(3) to licensees subject to
section 310(b)(3) forbearance to ensure that their charges and
practices are just and reasonable and not unjustly or unreasonably
discriminatory. Based on the Commission's experience in applying its
policies under section 310(b)(4), the Commission finds no evidence that
the foreign ownership of a common carrier licensee, in and of itself,
is directly relevant to the carrier's compliance with the requirements
of sections 201 and 202 of the Act that charges, practices,
classifications, and regulations be just and reasonable and not
unjustly or unreasonably discriminatory. In addition, the Commission
has other, more tailored tools at its disposal, such as section 201,
202, and 208 of the Act, to ensure that rates, practices and
classifications of common carrier licensees are just and reasonable and
not unjustly or unreasonably discriminatory.
5. The Commission also concludes that, under the section prong of
section 10, it is unnecessary for the protection of consumers to apply
section 310(b)(3)'s 20 percent limit to foreign interests in licensees
subject to section 310(b)(3) forbearance. Under the forbearance
approach, the Commission will give notice and seek public comment on a
petition for declaratory ruling or similar request asking for approval
of proposed foreign equity and/or voting interests in a common carrier
licensee over 20 percent. This notice and comment process will inform
any Commission decision to grant a petition for declaratory ruling to
exceed section 310(b)(3)'s 20 percent limit and allow the Commission to
assess any potential harm to consumers.
6. The Commission concludes, under the third prong of section 10,
that the public interest would be served by not applying the foreign
ownership limit of section 310(b)(3) to licensees subject to section
310(b)(3) forbearance--where the licensee has greater than 20 percent
foreign ownership held through U.S.-organized entities that do not
control the licensee--for the same reasons that the public interest is
served when the Commission allows, under section 310(b)(4), greater
than 25 percent foreign ownership in the controlling U.S.-organized
parent of a common carrier licensee under otherwise identical
circumstances. In the context of common carrier licensees, the
Commission discerns no public interest distinction between the two
situations.
7. By incorporating the Commission's section 310(b)(4) policies and
procedures, the forbearance approach will protect the national security
objectives underlying the Act. These policies and procedures provide
Executive Branch expert agencies the opportunity to review proposed
foreign ownership in the controlling U.S.-organized parents of common
carrier licensees for any national security, law enforcement, or public
safety issues. The forbearance approach will provide the Executive
Branch agencies the same opportunity to assess proposed foreign
ownership in licensees subject to section 310(b)(3) forbearance.
8. In addition, the forbearance approach will ensure that foreign
ownership from World Trade Organization (WTO) Member countries will be
reviewed under the Commission's open entry standard, whether the
foreign investment is held through U.S.-organized entities that control
the licensee or through U.S.-organized entities that do not control the
licensee. The forbearance approach also comports with commenters'
request in this docket that the Commission treat all ``indirect''
foreign ownership in a common carrier licensee in a manner consistent
with the Commission's section 310(b)(4) policies and procedures so as
to further the objectives of the WTO Basic Telecom Agreement.
Conforming the Commission's foreign ownership policies for sections
310(b)(3) and 310(b)(4) will clarify and simplify Commission regulation
of foreign ownership of common carrier licensees. The forbearance
approach also will enhance competitive market conditions for common
carrier licensees by allowing them and their potential owners to
structure foreign investment in the licensee in a manner that best
accommodates their financial considerations and business needs.
9. The forbearance approach requires a licensee to file a petition
for declaratory ruling or similar request seeking Commission approval
before foreign ownership held in the licensee through U.S.-organized
entities that do not control the licensee, together with foreign
ownership held in the licensee itself, exceeds 20 percent of the
licensee's equity interests and/or 20 percent of its voting interests.
The Commission, or the International Bureau on delegated authority,
will place the request on notice for public comment and forward the
petition to the Executive Branch agencies for review. Following
conclusion of this process, the Commission, or the International Bureau
on delegated authority, will issue a declaratory ruling as to whether
the proposed foreign ownership is in the public interest. The licensee
shall not be allowed to have foreign ownership under section 310(b)(3)
in excess of 20 percent unless and until the Commission or the
International Bureau has granted the licensee's request.
10. The Commission finds that the benefits of adopting the
forbearance approach outweigh the costs. By forbearing from applying
the section 310(b)(3) foreign ownership limit to the subject class of
common carrier licensees, licensees and their potential owners will
have flexibility in the structuring of their investment, free of a
statutory constraint. The Commission anticipates that the costs of the
approval process for proposed foreign ownership of licensees subject to
section 310(b)(3) forbearance will be far less for licensees than the
costs they have to incur in structuring their investments to comply
with the section 310(b)(3) limit. Moreover, under the forbearance
approach, the approval process will be consistent with the Commission's
policy framework for foreign ownership of the controlling U.S. parents
of licensees under section 310(b)(4). For these reasons, the Commission
expects this approach to reduce unnecessary costs and burdens on common
carrier licensees. Finally, the forbearance approach will not
compromise the Commission's ability to carry out its statutory duties
under section 310(b) of the Act, including protection of national
security and law enforcement interests.
11. The First Report and Order defers consideration, to a later
stage of the proceeding, of the comments urging the Commission to
simplify the section 310(b)(4) requirements and apply those revised
requirements to the evaluation of foreign interests in a common carrier
licensee held through U.S.-organized entities that do not control the
licensee.
[[Page 50630]]
Regulatory Flexibility Certification
12. The Regulatory Flexibility Act of 1980, as amended (RFA),\1\
requires that a regulatory flexibility analysis be prepared for notice-
and-comment rule making proceedings, unless the agency certifies that
``the rule will not, if promulgated, have a significant economic impact
on a substantial number of small entities.'' \2\ The RFA generally
defines the term ``small entity'' as having the same meaning as the
terms ``small business,'' ``small organization,'' and ``small
governmental jurisdiction.'' \3\ In addition, the term ``small
business'' has the same meaning as the term ``small business concern''
under the Small Business Act.\4\ A ``small business concern'' is one
which: (1) Is independently owned and operated; (2) is not dominant in
its field of operation; and (3) satisfies any additional criteria
established by the Small Business Administration (SBA).
---------------------------------------------------------------------------
\1\ See 5 U.S.C. 603. The RFA, see 5 U.S.C. 601-612, has been
amended by the Small Business Regulatory Enforcement Fairness Act of
1996, Public Law 104-121, Title II, 110 Stat. 857 (1996).
\2\ 5 U.S.C. 605(b).
\3\ 5 U.S.C. 601(6).
\4\ 5 U.S.C. 601(3) (incorporating by reference the definition
of ``small business concern'' in the Small Business Act, 15 U.S.C.
632). Pursuant to 5 U.S.C. 601(3), the statutory definition of a
small business applies ``unless an agency, after consultation with
the Office of Advocacy of the Small Business Administration and
after opportunity for public comment, establishes one or more
definitions of such term which are appropriate to the activities of
the agency and publishes such definitions(s) in the Federal
Register.''
---------------------------------------------------------------------------
13. The approach adopted in the First Report and Order will remove
a statutory constraint on common carrier licensees, by forbearing from
applying the 20 percent ownership limit under section 310(b)(3) to the
class of common carrier licensees in which the foreign ownership is
held in the licensee through intervening U.S.-organized entities that
do not control the licensee. Instead of prohibiting foreign ownership
in excess of 20 percent under section 310(b)(3), the Commission will
assess whether the proposed foreign ownership in excess of 20 percent
is in the public interest through an approval process that is
consistent with its policies and procedures for approval of foreign
ownership in a U.S.-organized entity that controls a licensee, under
section 310(b)(4). The Commission believes that the new approach will
reduce costs and burdens currently imposed on common carrier licensees,
including those licensees that are small entities, while continuing to
ensure that the Commission has the information it needs to carry out
its statutory duties. Therefore, the Commission certifies that the new
approach will not have a significant economic impact on a substantial
number of small entities. The Commission will send a copy of the First
Report and Order, including a copy of this Regulatory Flexibility
Certification, to the Chief Counsel for Advocacy of the SBA.\5\ This
certification also will be published in the Federal Register.\6\
---------------------------------------------------------------------------
\5\ 5 U.S.C. 605(b).
\6\ Id.
---------------------------------------------------------------------------
Paperwork Reduction Act of 1995 Analysis
14. The First Report and Order does not contain new or modified
information collection requirements subject to the Paperwork Reduction
Act of 1995, Public Law 104-13. The information collection requirements
for the section 310(b) foreign ownership approval process are included
in OMB Control No. 3060-0686. In addition, therefore, this document
does not contain any new or modified information collection burden for
small business concerns with fewer than 25 employees, pursuant to the
Small Business Paperwork Relief Act of 2002, Public Law 107-198, see 44
U.S.C. 3506(c)(4).
Report to Congress
15. The Commission has included a copy of the First Report and
Order in a report sent to Congress and the Government Accountability
Office pursuant to the Congressional Review Act. See 5 U.S.C.
801(a)(1)(A).
Ordering Clauses
16. It is ordered, pursuant to sections 1, 2, 4(i), 4(j), 5(c), 10,
303(r), 308(b), 309, 310(b), 310(d), and 403 of the Communications Act
of 1934, as amended, 47 U.S.C. 151, 152, 154(i), 154(j), 155(c), 160,
303(r), 308(b), 309, 310(b), 310(d), and 403, that the First Report and
Order in IB Docket No. 11-133 IS ADOPTED.
17. It is further ordered that the requirements of this First
Report and Order shall be effective upon publication in the Federal
Register.\7\
---------------------------------------------------------------------------
\7\ See 47 CFR 1.103, 1.427(b). As set forth above, by
forbearing from applying the strict section 310(b)(3) foreign
ownership limit to the subject class of common carrier licensees, we
afford these licensees and their potential owners greater
flexibility in the structuring of their investment, free of a
statutory constraint. Our action thereby ``relieves a restriction''
within the meaning of 5 U.S.C. 553(d)(1).
---------------------------------------------------------------------------
18. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Report and Order, including the Regulatory Flexibility
Certification, to the Chief Counsel for Advocacy of the Small Business
Administration.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 2012-20704 Filed 8-21-12; 8:45 am]
BILLING CODE 6712-01-P
