Media Bureau Announces Filing of Request for Clarification of the Commission's Policies and Procedures Under the Communications Act by the Coalition for Broadcast Investment, 17395-17403 [2013-06548]
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Federal Register / Vol. 78, No. 55 / Thursday, March 21, 2013 / Notices
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[FR Doc. 2013–06513 Filed 3–20–13; 8:45 am]
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ENVIRONMENTAL PROTECTION
AGENCY
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Dated: March 14, 2013.
Mark Joyce,
Acting Designated Federal Officer.
[FR Doc. 2013–06546 Filed 3–20–13; 8:45 am]
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Dated: March 14, 2013.
Mark Joyce,
Acting Designated Federal Officer.
[FR Doc. 2013–06549 Filed 3–20–13; 8:45 am]
BILLING CODE 6560–50–P
[FRL–9793–1; EPA–HQ–OA–2013–0124]
Good Neighbor Environmental Board;
Notification of Public Advisory
Committee Teleconference
FEDERAL COMMUNICATIONS
COMMISSION
Environmental Protection
Agency (EPA).
ACTION: Notification of Public Advisory
Committee Teleconference.
Media Bureau Announces Filing of
Request for Clarification of the
Commission’s Policies and
Procedures Under the
Communications Act by the Coalition
for Broadcast Investment
AGENCY:
SUMMARY: Pursuant to the Federal
Advisory Committee Act, Public Law
92–463, notice is hereby given that the
Good Neighbor Environmental Board
(GNEB) will hold a public
teleconference on April 2, 2013 from 12
p.m. to 4 p.m. Eastern Standard Time.
Due to budgetary uncertainties, EPA is
announcing this teleconference with
less than 15 calendar days public notice.
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[MB Docket No. 13–50; DA 13–281]
Federal Communications
Commission.
ACTION: Notice.
AGENCY:
SUMMARY: This document seeks
comment on an August 31, 2012 letter
from the Coalition for Broadcast
Investment asking the Commission to
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Federal Register / Vol. 78, No. 55 / Thursday, March 21, 2013 / Notices
clarify its policies and procedures under
Section 310(b)(4) of the
Communications Act, 47 U.S.C.
310(b)(4), which restricts foreign
ownership and voting interests in
entities that control Commission
licensees.
Interested parties may file
comments on or before April 15, 2013,
and reply comments on or before April
30, 2013.
FOR FURTHER INFORMATION CONTACT: Jake
Riehm, Media Bureau (202) 418–2166,
or email at Jake.Riehm@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a
synopsis of the Commission’s document
in MB Docket No. 13–50, DA 13–281,
released February 26, 2013. The
complete text of the document is
available for inspection and copying
during normal business hours in the
FCC Reference Center, 445 12th Street
SW., Washington, DC 20554, and may
also be purchased from the
Commission’s copy contractor, BCPI,
Inc., Portals II, 445 12th Street SW.,
Washington, DC 20054. Customers may
contact BCPI, Inc. at their Web site
https://www.bcpi.com or call 1–800–
378–3160.
DATES:
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Summary of the Public Notice
1. On August 31, 2012, the Coalition
for Broadcast Investment (CBI)
submitted a letter (the Letter) asking the
Commission to clarify its policies and
procedures under Section 310(b)(4) of
the Communications Act, 47 U.S.C.
Section 310(b)(4), which restricts
foreign ownership and voting interests
in entities that control Commission
licensees. CBI states that it is a group
comprised of national broadcast
networks, radio and television station
licensees, and community and
consumer organizations. Specifically,
CBI asks the Commission to clarify that
it will conduct a substantive, facts and
circumstances evaluation of proposals
for foreign investment in excess of 25
percent in the parent company of a
broadcast licensee, consistent with and
in furtherance of its authority under 47
U.S.C. Section 310(b)(4).
2. The Media Bureau invites public
comment on the Letter from interested
parties. The complete text of the Letter
dated August 31, 2012, is as follows:
3. We write on behalf of the Coalition
for Broadcast Investment * to ask the
* The Coalition for Broadcast Investment seeks to
promote enhanced access to capital by U.S.
broadcasters. The Coalition believes that access to
additional and new sources of investment capital
will benefit the broadcast industry and American
consumers by financing advanced infrastructure,
innovative services and high quality programming;
and by promoting the creation of highly skilled,
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Commission to clarify and affirm, at the
earliest possible time, the following:
Going forward, the FCC will conduct
substantive, facts and circumstances
evaluation of proposals for foreign
investment in excess of 25 percent in
the parent company of a broadcast
licensee, consistent with and in
furtherance of its authority under
Section 310(b)(4) of the
Communications Act.
4. For the avoidance of doubt, we seek
here only confirmation of the
Commission’s intent to exercise its
statutory discretion to consider, in any
particular case, whether it would serve
the public interest to authorize,
condition, or disallow proposed foreign
investment in excess of the 25 percent
benchmark.
5. The clarification requested here is
squarely within the Commission’s
existing statutory authority and would
neither change (or require any change
in) any FCC rule nor predetermine the
outcome of any particular case. Rather,
we are asking the Commission merely to
advise the public prospectively of the
manner in which [it] proposes to
exercise a discretionary power granted
to it by Congress under Section
310(b)(4) of the Act. American Mining
Cong. v. Mine Safety and Health
Admin., 995 F.2d 1106, 1109 (D.C. Cir.
1993).
6. Taking this modest procedural step
would place broadcasters on the same
footing as every other industry
participant and signal that the broadcast
sector continues to be a vital and valued
part of the 21st-century media and
telecommunications ecosystem. It
would send a positive and powerful
message to the industry, the capital
markets, viewers, listeners and
advertisers alike that in the appropriate
circumstances U.S. broadcasters may be
afforded access to new sources of
capital. It would incent entry into the
broadcast sector, including by minorityand women-owned businesses. It would
facilitate investment in new services
and infrastructure, create jobs and,
ultimately, enhance service to local
communities and their viewers and
listeners.
7. Absent a clear statement from the
Commission, the marketplace will
continue to assume that proposals for
above-benchmark foreign investment in
broadcasters will not even be
considered regardless of the facts and
circumstances presented or the merits of
a particular proposal. As a result,
well-paying jobs. Coalition members comprise
national broadcast networks, radio and television
station licensees and community and consumer
organizations. A list of Coalition members is
attached.
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transactions that the Commission may
have found to enhance local broadcast
service will continue never to see the
light of day—an outcome that surely
would disserve the public interest.
Introduction and Summary
8. Clarifying that the Commission is
prepared to exercise its discretion with
respect to broadcast proposals under
Section 310(b)(4) would acknowledge
the competitive realities of the 21st
century telecommunications and media
environment. Today, programmers,
consumers and advertisers have at their
fingertips a multitude of choices on
radio, television, cable and satellite
services, mobile devices, the Internet,
and elsewhere.
9. The Commission’s Discretion under
Section 310(b)(4). Nearly 80 years ago,
Congress established a 25 percent
flexible benchmark with respect to
aggregate foreign investment in the
parent company of a broadcast or
common carrier licensee. Section
310(b)(4) of the Communications Act of
1934, as amended, provides, in
pertinent part:
(b) No broadcast or common carrier
* * * license shall be granted to or held
by
*
*
*
*
*
(4) any corporation directly or
indirectly controlled by any other
corporation of which more than onefourth of the capital stock is owned of
record or voted by aliens, their
representatives, or by a foreign
government or representative thereof, or
by any corporation organized under the
laws of a foreign country, if the
Commission finds that the public
interest will be served by the refusal or
revocation of such license.
47 U.S.C. 310(b)(4).
10. The text of Section 310(b)(4)
makes clear that the 25 percent figure
was intended to be a public interest
yardstick only, and not a cap. Under the
plain language of the Act the FCC is
authorized to disallow a particular
instance of foreign investment in excess
of the benchmark only upon a finding
that the public interest will be served by
prohibiting it. Just two weeks ago the
Commission reiterated that it has
discretion under Section 310(b)(4) to
permit foreign investment above the 25
percent benchmark unless it finds such
ownership would be inconsistent with
the public interest. Review of Foreign
Ownership Policies for Common Carrier
and Aeronautical Radio Licensees under
Section 310(b)(4) of the
Communications Act of 1934, as
Amended, Report and Order, FCC 12–93
(rel. Aug. 17, 2012) (adopting a proposal
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set out in Public Notice, International
Bureau Seeks Further Comment on
Foreign Ownership Policies:
Forbearance from Section 310(b)(3) for
Common Carrier Licensees, 27 FCC Rcd
3946 (Int’l Bur., 2012)) (the Forbearance
Order) at 3 (Section 5).
11. Consistent with the language and
intent of Section 310(b)(4), the
Commission repeatedly has evaluated
above-benchmark foreign investment in
the common carrier context and
exercised its discretion to approve or
condition such investment when and as
appropriate. Yet, at the same time, the
Commission to date has maintained
what the FCC itself has characterized as
an irrefutable presumption against even
considering—much less authorizing—
proposals for foreign investment in
broadcasters that would exceed the 25
percent benchmark.
12. Changed circumstances. The
Commission’s refusal even to consider
exercising its discretion under Section
310(b)(4) in the broadcast context has
been attributed variously to concerns
that foreign governments could disrupt
communications during wartime or
commandeer public opinion through
propaganda aired on radio and
television stations. Regardless of
whether the American public ever could
have been susceptible to such perceived
threats, technological and marketplace
developments have obviated these
concerns.
• Americans live, work and play in a
multichannel, multi-platform
environment in which they can produce
and consume content freely—locally,
nationally, and internationally.
➢ Today, in addition to broadcasting,
many other sources of information are
available to the U.S. public.
➢ Today, consumers have access to
local, national, and international news
and information from myriad sources—
including the Internet, mobile
applications, video and audio streaming
services, cable and satellite
programming networks, and social
networking tools. None of these outlets
are subject to limitations on foreign
investment.
• At the same time, the Commission
has developed substantial expertise and
tools to evaluate the merits of proposed
foreign investment.
➢ The Commission routinely
conducts on-the-merits reviews of
foreign investment in common carriers
pursuant to a presumption that the
public interest is served by capital
sourced from WTO-member states.
➢ Close coordination with federal
national security agencies ensures that
U.S. security interests are taken into
account and that, where appropriate,
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transactions are conditioned or
disapproved.
13. Public interest benefits. The
modest relief requested here would
enable local broadcast stations to join
their cable, satellite and online
counterparts in having the opportunity
to gain access to significant new or
additional sources of capital. Ceasing to
single out broadcasters, and
broadcasters alone, for a per se ban on
above-benchmark foreign investment
would ensure that common carrier and
broadcast licensees’ respective ability to
participate in world capital markets is
not determined by a false dichotomy in
the application of the statutory
benchmark.
• Broadcasters should be able to
access the capital markets on the same
terms as their unregulated competitors.
➢ In the multiplatform, multichannel environment in which
broadcasters now compete, being the
sole medium without even potential
access to above-benchmark levels of
foreign capital is arbitrary and
inequitable.
➢ This is especially true at a time
when the Commission has liberalized its
foreign investment policies and
procedures for common carriers, which
are subject to the same statutory regime
as broadcasters for evaluation of foreign
investment.
• In exercising its discretion to
consider proposals for above-benchmark
indirect foreign investment in broadcast
licensees, the Commission could
provide new opportunities for minority
businesses and entrepreneurs, whose
access to the domestic capital markets
has been limited, thereby advancing the
public interest in viewpoint diversity
and media competition.
14. Alignment with U.S. Policy.
Clarifying that the Commission will no
longer maintain an ad hoc presumption
against above-benchmark foreign
investment in radio and television
broadcasters would be consistent with
broader U.S. policy favoring inbound
foreign investment, a recognized source
of jobs and capital for businesses that
operate locally in the United States. The
irony in the persistence of any historical
presumption against inbound foreign
investment in broadcasters is that today,
it is outbound investment that causes
debate among policymakers and the
public alike—for example, the transfer
of a manufacturing plant to another
country with lower labor costs. It is
remarkable that the world’s leading
economy would restrict the broadcast
sector, almost alone, in its ability to
create jobs, build infrastructure, and
otherwise serve local American
communities using foreign capital.
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• As the White House stated in June
2011, The United States welcomes the
investment and jobs supported by the
U.S. affiliates of foreign-domiciled
companies. These companies play an
important role in the U.S. economy, as
they build plants and other facilities or
provide additional capital to businesses
that already operate locally in the
United States.
• See SelectUSA, available at https://
selectusa.commerce.gov, a U.S.
government site listing as industries
represent[ing] unparalleled opportunity
for global growth and success aerospace,
automotive, biotechnology, chemical,
consumer goods, creative and media,
energy, environmental technology,
financial services, healthcare and
medical technology, logistics and
transportation, machinery and
equipment, pharmaceuticals,
professional services, retail trade,
semiconductors, software and
information technology services,
textiles, and travel, tourism, and
hospitality.
15. Authority to Act. The Coalition
asks merely that the Commission clarify
that it will accept and consider on the
merits proposals for indirect foreign
investment in broadcasters in excess of
the 25 percent benchmark. Such a
clarification constitutes precisely the
type of ‘‘general statement[] of policy’’
that the Commission is authorized to
make on its own motion pursuant to
Section 553(b) of the Administrative
Procedure Act. 5 U.S.C. 553(b)(B).
Indeed, in the Forbearance Order issued
earlier this month, the Commission
clarified its intent, going forward, to
forbear in certain circumstances 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 interests are held through U.S.organized entities that do not control
the licensee.
16. A comprehensive discussion of
the origins and historical application of
the Section 310(b)(4) benchmark, the
Commission’s discretion under the
statute, and the acknowledged public
interest benefits of enhanced access to
capital, is set out in the Appendix. We
emphasize that the relief we are seeking
here—a clear statement by the
Commission that, going forward, it will
exercise its authority to evaluate on the
merits broadcast proposals under
Section 310(b)(4)—would not dictate the
result of any particular substantive
evaluation precisely because, under the
Act, the outcome of any review under
Section 310(b)(4) is within the
Commission’s discretion in the
application of its public interest test.
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Conclusion
17. The Commission’s effective
presumption against enhanced foreign
investment in the broadcast sector no
longer serves the public interest—if it
ever did. It deters investment in
businesses that provide service to local
communities and invest in jobs and
infrastructure in those communities. It
disadvantages a single class of
participants in an increasingly complex
media and telecommunications
ecosystem that faces rigorous
competition from firms that are not
subject to any restrictions on foreign
investment. Meanwhile, the concerns
that once informed the Commission’s
presumptive policy have lost their
meaning.
18. Accordingly, for all the reasons
stated herein and in the Appendix, we
respectfully request that the
Commission promptly clarify and affirm
that, going forward, it will conduct a
case-by-case evaluation of proposals for
foreign investment in U.S. broadcast
holding companies at levels exceeding
the 25 percent benchmark.
19. Kindly direct any questions
concerning this submission to the
undersigned.
Respectfully Submitted,
Mace Rosenstein
Gerald J. Waldron
Counsel for the Coalition for Broadcast
Investment
Attachments
cc: Hon. Julius Genachowski, Chairman
Commissioner Robert McDowell
Commissioner Mignon Clyburn
Commissioner Ajit Pai
Commissioner Jessica Rosenworcel
emcdonald on DSK67QTVN1PROD with NOTICES
The Coalition for Broadcast Investment
Adelante Media Group Bonten
Media Group BuenaVision
Television Network Bustos Media
Holdings, LLC CBS Corporation
Clear Channel Communications, Inc.
Cuban National Council
Emmis Communications Corporation
Entravision Communications
Corporation
Hearst Television Inc.
International Black Broadcasters
Association
ION Media Networks, Inc.
Latinos in Information Science and
Technology Association
League of United Latin American
Citizens LIN
Television Corporation d/b/a LIN Media
Minority Media & Telecommunications
Council
National Association of Black County
Officials
National Black Caucus—Local Elected
Officials
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National Black Chamber of Commerce
National Organization of Black Elected
Legislative Women
The National Puerto Rican Chamber of
Commerce
Nexstar Broadcasting Group Inc.
Schurz Communications Inc.
Sinclair Broadcast Group, Inc.
Una Vez Mas Television Group
United States Hispanic Chamber of
Commerce
Univision Communications Inc.
The Walt Disney Company
Appendix
I. Historical Justifications for Disparate
Treatment of Broadcasters Under Section
310(b)(4) Have Been Overtaken by
Technological and Market Developments
20. The Commission has recognized that
‘‘Congress has given [the FCC] the flexibility
to consider a broad range of factors, and to
adapt [its] policies and rules to reflect current
conditions’’ in making its public interest
determination under Section 310(b)(4).1 Just
as the technological and competitive
environment in which broadcasters operate
today was unimaginable in 1934, so the
historical moment in which the Commission
first implemented Section 310(b)(4) is
unrecognizable and, we would submit,
irrelevant, today.
21. In the common carrier context the
Commission, over time, has modified its
practices under Section 310(b)(4) in order to
consider and, where appropriate, authorize
foreign investment in excess of the statutory
benchmark in order to encourage a more
open and competitive U.S.
telecommunications market.2 Yet, during the
same period in which the Commission has,
among other things, established a rebuttable
presumption in favor of foreign investment in
common carriers in most circumstances, it
has effectively created the presumption in
the broadcast area that, absent special
considerations that outweigh the statutory
concerns, the public interest [would] be
served by denying licenses to entities with
alien ownership above 25 percent.3
22. The Commission has discretion in
applying the benchmark to broadcast
investment. Yet diametrically opposed
presumptions—one in favor of foreign
investment for common carriers, another
against foreign investment for broadcasters—
are at least anachronistic in today’s
marketplace, as carriers continue to expand
their service offerings to deliver audio and
video content to consumers, and to compete
directly with broadcast licensees for
programming inputs, advertisers and
viewers.
23. We need not catalogue here nearly
eight decades’ worth of disruptive innovation
in the media and telecommunications
industry affecting common carriers and
broadcasters alike. One thing is clear: In the
face of such momentous changes the
Commission’s effective presumption against
even the consideration of broadcasters’
Section 310(b)(4) proposals is neither
justifiable nor sustainable.
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A. The Availability of Myriad Sources of
News, Information, Sports, and
Entertainment Content Delivered Over
Multiple Competing Platforms Has
Undermined the Commission’s Historical
Rationale for Refusing To Consider AboveBenchmark Broadcast Foreign Investment
24. The historical justification for the
Commission’s categorical refusal even to
consider indirect broadcast foreign
investment above the 25 percent benchmark,
dating from the earliest days of wireless
communications, was that foreign powers
could acquire and disrupt ship-to-shore and
governmental communications facilities
during wartime.4 Later, with the emergence
of commercial broadcasting, some expressed
concern that a hostile foreign power could
use broadcast outlets—which, at the time,
were the only real-time mass
communications platform—to manipulate
American public opinion.
25. Even accepting the validity of those
concerns for purposes of argument, they
reflect a factual predicate that long ago was
overtaken by marketplace and technological
developments. Now, nearly 80 years
following enactment of Section 310(b)(4), the
media landscape has been transformed.
• Broadcast services compete with myriad
sources of information and entertainment in
a highly and increasingly competitive
broadband environment.5
• 92 percent of Americans use multiple
platforms to access news and information
content.6
• Broadcast stations compete with other
media outlets not only for viewers and
listeners, but also for advertising revenue.7
26. Broadcasters today must compete with
a vast number of non-broadcast media outlets
for news and information—and diverse
editorial viewpoints—both domestically and
from around the world. These include
satellite-delivered news channels owned and
operated by foreign governments, such as the
RT (Russia Today) Network, Al Jazeera,
Deutsche Welle and the BBC; online news
sites such as The Guardian, Japan Today and
The Jerusalem Post; Internet portals such as
Google, Yahoo! and AOL; and streaming
video sites such as Hulu and Bambuser—
among others.8 Yet neither the countless
competing program services that vie for
consumers’ attention, nor the cable and
satellite systems and Internet service
providers that deliver them, are subject to
presumptive—or any—limitations on foreign
investment.
• The availability of rich and varied
content, including news and information
programming, from around the world—as
owned or chosen by many non-U.S.
persons—disseminated over the air, on cable
and satellite systems and on the Internet, has
done no discernible harm to the public
interest. Nor has harm from such content
been alleged.
27. The FCC last considered adopting a
more flexible approach to foreign investment
in the broadcast context in 1995—at the
dawn of the Internet age and before the
explosion of information outlets throughout
our society and economy.9 Even then, the
FCC acknowledged that the burgeoning
number of information and entertainment
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sources has lessened the concern that
misinformation and propaganda broadcast by
alien-controlled licensees could overwhelm
other media voices.10 But in 1995 the
Commission did not believe that the time
ha[d] yet come to ease restrictions on alien
ownership of broadcast license[e]s.11
28. The technological and commercial
revolution that was only beginning in 1995
has matured within the space of a generation.
The media marketplace is, truly,
cacophonous, and each local broadcaster
must vie to be heard by consumers who are
distracted by a multiplicity of competing
choices from here and abroad. There is no
basis in fact or law for continuing to impose
an ad hoc ban on even the consideration of
indirect foreign investment above the
statutory benchmark in broadcast licensees.
B. The Perception That Foreign Editorial
Control Over a U.S. Broadcaster Poses a
Greater National Security Risk Than Foreign
Control of Domestic Telecommunications
Networks or Other Media Outlets Is Outdated
and Inaccurate
29. In contrast to what the Commission has
characterized as its ‘‘traditionally heightened
concern for foreign influence over or control
of licensees which exercise editorial
discretion over the content of their
transmissions,’’ 12 the Commission has
justified its willingness to consider foreign
investment in common carrier licensees on
the ground that they are passive conduits for
information provided by others.13 But this
outdated rationale, too, can no longer be
squared with the realities of
telecommunications technology and the
media marketplace in the 21st century.
30. Indeed, the current threat of greatest
concern to policymakers comes not from
editorial control over broadcast
transmissions, but the possibility that foreign
agents will engage in cyber-warfare using our
communications networks. President Obama
has identified cybersecurity as one of the
most serious economic and national security
challenges we face as a nation.14 Chairman
Genachowski also has observed this
phenomenon:
Broadband Internet—over wired and
wireless communications networks— has
transformed our economy and society,
opening up a new world of broad
opportunity. $8 trillion are exchanged over
these wired and wireless networks each year,
and growing. If you shut down the Internet,
you’d shut down our economy.15
31. In an era in which ostensibly passive
wired and wireless networks play such an
essential role in our economy and society,
including the dissemination of data and
information from around the world, and yet
routinely are permitted to exceed the
benchmark, a presumption against foreign
investment on the basis that broadcasting is
a more active service simply makes no sense
with respect to communications, national
security, trade or competition policy
concerns. Yet broadcasters continue to be
subject to this stark structural disadvantage
`
vis-a-vis every other participant in the 21st
century media marketplace—cable television
operators, direct-to-home satellite systems,
national and regional non-broadcast
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programming networks, wireless broadband
networks, online content aggregators, Internet
portals, Web site hosts, and others.
C. The Commission Would Continue To Have
Plenary Authority To Enforce Commercial
Broadcasters’ Compliance With Their Public
Interest Obligations Under the Act
32. Notwithstanding their locus of
ownership or investment, broadcast stations
are obligated under the Act to provide service
in the public interest to their local
communities. We are not seeking any change
in those fundamental obligations. The
Commission’s exercise of its discretion under
Section 310(b)(4) to consider and, where
appropriate, authorize foreign investment in
excess of the 25 percent benchmark would
not abrogate its fundamental responsibility
under Section 310(d) of the Act to evaluate
the nature and extent of a broadcaster’s
service to its community—among other
matters—to determine whether a station
license should be granted or renewed.
33. The Commission’s authority to ensure
that broadcasters continue to discharge their
obligations under the public interest standard
is analogous to its power to ensure that
common carrier licensees comply with the
nondiscrimination provisions of the Act.
Significantly, the Commission has observed
that, in its experience in authorizing up to
100 percent foreign ownership and control of
U.S. wireless parent companies under section
310(b)(4), we find no evidence that the
foreign ownership of a common carrier
licensee, in and of itself, is directly relevant
to the carrier’s compliance with its statutory
obligations.16 Furthermore, because the
other, more tailored tools at [the
Commission’s] disposal’’ enable it ‘‘to ensure
that rates, practices and classifications of
common carrier licensees are just and
reasonable and not unjustly or unreasonably
discriminatory, authorizing increased foreign
investment ‘‘would not hinder the
Commission’s ability to enforce carriers’
compliance with their obligations under the
Act * * *’’ 17
34. Similarly, in the broadcast context,
precisely the same tools that have always
been available to the Commission under
Section 310(d) in the licensing and renewal
processes—for example, ensuring that local
stations’ programming decisions are
responsive to the needs, interests and
concerns of their communities, and
reviewing broadcasters’ compliance with the
rules pertaining to children’s programming
and political broadcasting, among other
things—will continue to enable the
Commission to enforce broadcasters’
compliance with their obligations under the
Act. Meanwhile, improved access to foreign
capital may enhance a broadcast licensee’s
ability to meet its public interest obligations
by financing improvements in existing
broadcast services and the development of
new and innovative ones.
II. Foreign Investment Is Beneficial for
United States Industry and Consumers and
Could Benefit Broadcasters and the
Communities They Serve
35. To gauge the opportunity costs of the
Commission’s historical refusal to consider
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17399
above-benchmark foreign investment in
broadcasters one need look no further than
the telecommunications industry and the
many competitive and consumer benefits of
inbound foreign investment in that sector.
Today, [f]ew sectors are more global than
telecommunications. Telecommunications
technology, services, and equipment are a
major driver of trade, growth, and
innovation.18 Globalization, growth, and
innovation are a direct result of the
discretion the Commission has exercised to
consider and, where appropriate after a
merits-based review, authorize foreign
investment in common carriers in excess of
the statutory benchmark.
36. The impact of foreign investment on
the U.S. telecommunications industry is well
documented. Foreign investment has proven
to be an important source of equity financing
for U.S. telecommunications companies,
fostering technical innovation, economic
growth, and job creation.19
• Verizon Wireless, the nation’s largest
wireless provider, is a joint venture of
Verizon Communications, Inc., and Vodafone
Group PLC, a United Kingdom Company.20
Verizon Wireless owns and operates the
nation’s largest 4G LTE network, covering
more than 200 million people in more than
230 markets across the United States.21
• T-Mobile USA, Inc., a wholly owned
subsidiary of German telecommunications
provider Deutsche Telekom AG, is the fourth
largest wireless provider in the United States
by subscribership.22 The Commission has
recognized the important role foreign-owned
T-Mobile has played in the development of
a more competitive mobile services
marketplace by engaging in both pricing and
technical innovation.23
37. Other sectors of the
telecommunications industry likewise have
benefited from significant foreign investment
made possible by the Commission’s exercise
of its discretion under Section 310(b)(4).
• The Commission has approved abovebenchmark foreign investment in Global
Crossing Ltd., a major Tier One common
carrier and Internet Service Provider, and in
Level 3, a major Department of Defense
contractor.24 The merged companies’
extensive U.S. and international network
reaches more than 450 core markets in North
America, Latin America, Europe, the Middle
East, Africa, and Asia.25
• The Commission has twice exercised its
statutory discretion to permit significant
foreign investment in Iridium,26 an integral
element in the U.S. Government’s
communications infrastructure,
approximately 25 percent of whose revenue
is attributable to its contracts as a
communications services provider to the
Department of Defense.27
38. As recently as August 17, 2012, the
Commission reiterated its belief ‘‘that
providing greater flexibility in the structuring
of foreign investment in common carrier
licensees will enhance opportunities for
technological innovation and promote
economic growth and potential job creation
in the telecommunications sector.’’ 28 By
contrast, the Commission’s refusal even to
consider transactions involving indirect
foreign investment in excess of 25 percent in
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broadcasters has deprived the broadcast
sector of needed and available capital and its
concomitant benefits. It is, of course,
impossible to quantify precisely the effect of
the Commission’s policy on the broadcast
sector or American consumers. Because the
industry understands the Commission’s
policy to result in an effective irrefutable
presumption against foreign investment,
broadcasters do not even seek Commission
review of potentially beneficial transactions.
39. Nevertheless, just as the
telecommunications sector and other
industries benefit from enhanced growth and
productivity, job creation and increased
competition as a result of foreign investment,
there is ample basis to conclude that
broadcasters and the American public
likewise would benefit from broadcasters’
enhanced access to foreign capital. In fact, a
more balanced approach to inbound foreign
investment in broadcasting would serve
several historical goals of U.S.
telecommunications policy.
Policy goal
Potential effect of enhanced foreign investment in broadcasting
Diversity ............
• In exercising its discretion to consider proposals for above-benchmark indirect foreign investment in broadcast licensees,
the Commission could provide new opportunities for minority- and women-owned businesses and entrepreneurs whose access to the domestic capital markets has been limited.29
• Several public interest organizations and the Commission’s own Advisory Committee for Diversity have demonstrated that
revisiting the Commission’s broadcast policy under Section 310(b)(4) could advance the public interest in media diversity.30
• Expanding broadcasters’ access to capital would enable them to expand the services they offer their communities and to
provide a competitive spur to other media companies to do the same.
• Broadcasters already have begun to use mobile applications and social media to coordinate responses to emergencies or
to keep the public continuously updated on local and national news issues.31
• Radio stations are investing millions of dollars in digital technology to augment and expand their service to local communities.
• Improved access to capital would facilitate the implementation of these initiatives and fund the development of new, as yet
unforeseeable, innovations.
• A more conducive environment for foreign investment in broadcasting would promote the Commission’s policy of fostering
competition in the marketplace for the delivery of video programming.32
• Broadcasters should be able to seek access to the same sources of investment capital that are available to their unregulated competitors.
• As Chairman Genachowski observed in a recent speech to the National Association of Broadcasters, in order to compete
in the dramatically changed multi-platform digital broadband world, broadcasters must pursue innovative strategies to reach
audiences in new ways and are investing millions of dollars in digital products to serve their communities.33
Innovation .........
Competition .......
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40. But these and other benefits that could
be realized by facilitating broadcasters’
access to capital will not, and cannot,
materialize without the clarification we are
requesting here. Absent guidance from the
Commission, broadcasters and the capital
markets will continue to assume that any
proposal seeking authorization under Section
310(b)(4) for above-benchmark foreign
investment will be denied, or effectively
denied by not being acted on.
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III. The Commission Has the Expertise and
Resources Necessary To Evaluate Broadcast
Sector Foreign Investment as a Result of Its
Historical Exercise of Its Section 310(b)(4)
Discretion in the Common Carrier Sector
41. The FCC already possesses the
substantive expertise, practical experience
and institutional resources to conduct on-themerits reviews of indirect foreign investment
in broadcast licensees, based upon its
extensive and ongoing experience under
Section 310(b)(4) in reviewing transactions
involving foreign investment in the parent
companies of common carrier licensees. The
Commission has considered and approved,
denied or (where appropriate) conditioned
numerous instances of indirect foreign
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investment in excess of the statutory
benchmark. Furthermore, in doing so, the
Commission has evaluated the potential costs
and benefits of foreign investment to the
telecommunications industry and American
consumers, including with respect to
competition and diversity.
42. In exercising its Section 310(b)(4)
responsibility with respect to common carrier
licensees, the Commission has developed
and refined the procedures and criteria
generally applicable to the consideration of
above-benchmark foreign investment in
harmony with its recognition of the benefits
of foreign investment in the U.S.
telecommunications industry:
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The Commission’s consideration of
proposed broadcast foreign investment could
include the same factors that inform the
exercise of its Section 310(b)(4) discretion
with respect to common carrier licensees. For
example, looking to whether the source
country or countries enjoy ‘‘close and
friendly relations with the United States’’
could help the Commission determine
whether a proposed transaction implicates a
national security concern.34
43. In addition, today the Commission
regularly refers requests for declaratory
rulings under Section 310(b)(4) to Team
Telecom, an interagency group consisting of
representatives of the Department of Justice,
the Federal Bureau of Investigation and the
Department of Homeland Security, and
grants those agencies de facto authority to
disallow a transaction unless and until any
national security concerns have been
addressed.35 Alternatively, Team Telecom
can, and often does, intervene on its own
motion in FCC foreign ownership review
proceedings, requesting that the FCC defer
action on a transaction until such time as
Team Telecom’s national security analysis
has been completed. Where the Team
Telecom agencies have concerns about
potential national security implications of a
transaction, they typically require the
transaction parties to enter into national
security agreements as a condition of
approval. These requirements, in turn, are
relevant to the Commission’s ultimate
determination whether the proposed
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investment would disserve the public
interest under Section 310(b)(4).36
44. The Team Telecom process ensures
that broadcast transactions proposing foreign
investment in excess of the 25 percent
benchmark would receive a second-line
review that was not available at the time the
Commission developed its presumption
against such investment; indeed, under
existing procedures, the FCC will not
authorize foreign investment subject to a
Section 310(b)(4) review until it has been
authorized to do so by Team Telecom. The
Commission itself reiterated earlier this
month in the Forbearance Order that
authorizing above-benchmark foreign
investment does not impair national security
because the Commission’s Section 310(b)(4)
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.37
45. The Commission’s historical exercise of
its statutory responsibility under Section
310(b)(4) with respect to common carrier
licensees is doubly instructive. First, it
demonstrates that the Commission already
possesses the technical expertise and
resources needed to review and analyze
indirect foreign investment. Second, it
confirms that the Commission is capable of
exercising its ultimate discretion under
Section 310(b)(4) in a manner that both
serves the Act’s fundamental public interest
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17401
requirements and is cognizant of, and
responsive to, the competitive dynamics of a
flourishing and increasingly global
telecommunications industry—all to the
benefit of the U.S. telecommunications
industry and American consumers.
46. The Commission already is equally
well equipped to review indirect foreign
investment in broadcast licensees and can
satisfy Congress’s directive in Section
310(b)(4) by taking into consideration
bedrock communications policy tenets such
as promoting competition and fostering
media diversity; by ensuring that the national
security is protected and that no other public
interest harms are likely to materialize; and
by taking into consideration the
acknowledged benefits of technological
innovation, economic growth and job
creation.
Notes and References
1 Review of Foreign Ownership Policies for
Common Carrier and Aeronautical Radio
Licensees Under Section 310(b)(4) of the
Communications Act of 1934, as Amended,
Notice of Proposed Rulemaking, FCC 11–121
(rel. Aug. 9, 2011) (2011 NPRM), at para. 3.
2 Market Entry and Regulation of ForeignAffiliated Entities, Report and Order, 12 FCC
Rcd 23891 (1995) (ECO Order), at para. 183.
3 Fox Television Stations, Inc., 11 FCC Rcd
5714 (1995), at para. 21 (Fox II) (emphasis
added).
4 See, e.g., Radio Communication: Hearings
on S. 3620 and S. 5334 Before the House
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Commerce Committee, 62nd Cong. 35–37
(Mar. 1, 1912).
5 See Steven Waldman et al., The
Information Needs of Communities (July
2011), at 73 (describing broadcast audience
drift to cable, satellite, and the Internet.
6 Kristen Purcell et al., Understanding the
Participatory News Customer (March 2010),
available at https://www.pewinternet.org/
Reports/2010/Online-News.aspx.
7 Pew Research Center, Project for
Excellence in Journalism, 2012 State of the
News Media, available at https://
stateofthemedia.org/ (2012 State of the
Media).
8 LinkTV, available on DirecTV and Dish
Network, which brings satellite news from
around the world to American households,
Paul Wilner, Broadcasting a Global Sampler,
The New York Times (Jan. 13, 2008),
available at https://query.nytimes.com/gst/
fullpage.html?res=9D03E6DC1739F930A2575
2C0A96E9C8B63& pagewanted=all, provides
a unique perspective on international news,
current events, and diverse cultures,
presenting issues not often covered in the
U.S. media. About Link TV, available at
https://www.linktv.org/about.
9 ECO Order at paras. 190–94.
10 Id. at para. 194.
11 Id.
12 Market Entry and Regulation of ForeignAffiliated Entities, Notice of Proposed
Rulemaking, 10 FCC Rcd 4884 (1995), at
paras. 99–101.
13 See, e.g., GRC Cablevision, 47 FCC 2d
467, at para. 5 (1974); Cable & Wireless, Inc.
10 FCC Rcd 13177, at para. 18 (1995) (We
have concluded that concern about the effect
of alien ownership is lessened when common
carrier radio licenses are involved because
they are ‘passive’ in nature and there is no
control over the content of the transmission.).
14 National Security Council, The
Comprehensive National Cybersecurity
Initiative, available at https://
www.whitehouse.gov/cybersecurity/
comprehensive-national-cybersecurityinitiative.
15 Prepared Remarks of FCC Chairman
Julius Genachowski, Bipartisan Policy
Center, Washington, DC, Feb. 22, 2012,
available at https://hraunfoss.fcc.gov/edocs_
public/attachmatch/DOC-312602A1.pdf.
16 Forbearance Order at para. 15.
17 Id.
18 Ambassador Kirk Announces Results of
Annual 1377 Review, Press Release, Office of
the United States Trade Representative (April
2010), available at https://www.ustr.gov/
about-us/press-office/press-releases/2010/
april/ambassador-kirk-announces-resultsannual-1377-review.
19 2011 NPRM at para. 2.
20 See Cellco Partnership d/b/a/Verizon
Wireless and Atlantis Holdings LLC, 23 FCC
Rcd 17444, at paras. 6–8 (2008).
21 Verizon Wireless Facts-at-a-Glance,
available at https://
aboutus.verizonwireless.com/ataglance.html.
22 AT&T Inc. and Deutsche Telekom AG,
Staff Analysis and Findings, 26 FCC Rcd
1184, at para. 8 (November 2011).
23 Id. at para. 22.
24 Global Crossing Ltd., 18 FCC Rcd 20301
(2003).
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25 Level 3 Company History, available at
https://www.level3.com/en/about-us/
company-information/company-history/.
26 Space Station System Licensee, Inc., 17
FCC Rcd 2271 (2002); Iridium Holdings LLC
and Iridium Carrier Holdings LLC, 24 FCC
Rcd 10725 (2009).
27 Iridium Announces Fourth-Quarter and
Full-Year 2011 Results, Press Release (Mar. 6,
2012), available at https://
investor.iridium.com/
releasedetail.cfm?ReleaseID=654525;
Elizabeth Woyke, Satellite Phone Surge,
Forbes.com (Sept. 2008), available at https://
www.forbes.com/2008/09/16/satellitephones-disaster-techsolutions08-personal-cx
_ew_0916satphone.html.
28 Forbearance Order at para. 3.
29 2010 Quadrennial Regulatory Review,
Reply Comments of the Minority Media and
Telecommunications Council, MB Docket
No. 09–182, at 4 (filed Jul. 26, 2010).
30 See Advisory Committee on Diversity,
Recommendation on Adoption of a
Declaratory Ruling on Section 310(b)(4)
Waivers (Dec. 10, 2004), available at https://
www.fcc.gov/DiversityFAC/adoptedrecommendations/ForeignOwnership
Final.doc; see also 2006 Quadrennial
Regulatory Review, Initial Comments of the
Diversity and Competition Supporters in
Response to the Second Further Notice of
Proposed Rulemaking, MB Docket No. 06–
121, at 3, 37–39 (filed Oct. 1, 2007).
31 2012 State of the News Media.
32 See, e.g., Annual Assessment of the
Status of Competition in the Market for the
Delivery of Video Programming, FCC 07–207
(2009).
33 Prepared Remarks of FCC Chairman
Julius Genachowski, NAB Show 2012, Las
Vegas, Nevada, April 16, 2012, available at
https://transition.fcc.gov/Daily_Releases/
Daily_Business/2012/db0417/DOC313605A1.pdf
34 GRC Cablevision at para. 5.
35 See FCC Homeland Security Liaison
Activities (Mar. 2012), available at https://
transition.fcc.gov/pshs/docs/liaison.pdf.
36 See, e.g., Verizon Communications, Inc.,
22 FCC Rcd 6195 (2007); Guam Cellular and
Paging, Inc. and Docomo Guam Holdings,
Inc., 21 FCC Rcd 13580 (2006). Furthermore,
the review process administered by the
Committee on Foreign Investment in the
United States (CFIUS) ensures that foreign
investment in all market sectors is
thoroughly screened for any detrimental
national security implications. Although this
process is voluntary, CFIUS is widely used
and provides statutory certainty to investors
in the form of firm timelines for review and
ruling.
37 Forbearance Order at para. 20.
47. Procedural Matters: The proceeding
this Notice initiates shall be treated as a
‘‘permit-but-disclose’’ proceeding in
accordance with the Commission’s ex parte
rules.1 Persons making ex parte presentations
must file a copy of any written presentation
or a memorandum summarizing any oral
presentation within two business days after
the presentation (unless a different deadline
applicable to the Sunshine period applies).
1 47
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Persons making oral ex parte presentations
are reminded that memoranda summarizing
the presentation must (1) list all persons
attending or otherwise participating in the
meeting at which the ex parte presentation
was made, and (2) summarize all data
presented and arguments made during the
presentation. If the presentation consisted in
whole or in part of the presentation of data
or arguments already reflected in the
presenter’s written comments, memoranda or
other filings in the proceeding, the presenter
may provide citations to such data or
arguments in his or her prior comments,
memoranda, or other filings (specifying the
relevant page and/or paragraph numbers
where such data or arguments can be found)
in lieu of summarizing them in the
memorandum. Documents shown or given to
Commission staff during ex parte meetings
are deemed to be written ex parte
presentations and must be filed consistent
with rule 1.1206(b). In proceedings governed
by rule 1.49(f) or for which the Commission
has made available a method of electronic
filing, written ex parte presentations and
memoranda summarizing oral ex parte
presentations, and all attachments thereto,
must be filed through the electronic comment
filing system available for that proceeding,
and must be filed in their native format (e.g.,
.doc, .xml, .ppt, searchable .pdf). Participants
in this proceeding should familiarize
themselves with the Commission’s ex parte
rules.
48. Comment Information: Pursuant to
§§ 1.415 and 1.419 of the Commission’s rules,
47 CFR 1.415, 1.419, interested parties may
file comments and reply comments on or
before the dates indicated on the first page
of this document. Comments may be filed
using: (1) The Commission’s Electronic
Comment Filing System (ECFS), (2) the
Federal Government’s eRulemaking Portal, or
(3) by filing paper copies. See Electronic
Filing of Documents in Rulemaking
Proceedings, 63 FR 24121 (1998).
D Electronic Filers: Comments may be filed
electronically using the Internet by accessing
the ECFS: https://fjallfoss.fcc.gov/ecfs2/ or the
Federal eRulemaking Portal: https://
www.regulations.gov.
D For ECFS filers, if multiple docket or
rulemaking numbers appear in the caption of
this proceeding, filers must transmit one
electronic copy of the comments for each
docket or rulemaking number referenced in
the caption. In completing the transmittal
screen, filers should include their full name,
U.S. Postal Service mailing address, and the
applicable docket or rulemaking number.
Parties may also submit an electronic
comment by Internet email. To get filing
instructions, filers should send an email to
ecfs@fcc.gov, and include the following
words in the body of the message ‘‘get form.’’
A Sample form and directions will be sent in
response.
D Paper Filers: Parties who choose to file
by paper must file an original and four copies
of each filing. If more than one docket or
rulemaking number appears in the caption of
this proceeding, filers must submit two
additional copies for each additional docket
or rulemaking number.
Filings can be sent by hand or messenger
delivery, by commercial overnight courier, or
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by first-class or overnight U.S. Postal Service
mail. All filings must be addressed to the
Commission’s Secretary, Office of the
Secretary, Federal Communications
Commission.
D All hand-delivered or messengerdelivered paper filings for the Commission’s
Secretary must be delivered to FCC
Headquarters at 445 12th St. SW., Room TW–
A325, Washington, DC 20554. The filing
hours are 8:00 a.m. to 7:00 p.m. All hand
deliveries must be held together with rubber
bands or fasteners. Any envelopes must be
disposed of before entering the building.
D Commercial overnight mail (other than
U.S. Postal Service Express Mail and Priority
Mail) must be sent to 9300 East Hampton
Drive, Capitol Heights, MD 20743.
D U.S. Postal Service first-class, Express,
and Priority mail must be addressed to 445
12th Street SW., Washington DC 20554.
D People with Disabilities: To request
materials 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).
Federal Communications Commission.
Thomas Horan,
Chief of Staff, Media Bureau.
[FR Doc. 2013–06548 Filed 3–20–13; 8:45 am]
BILLING CODE 6712–01–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
emcdonald on DSK67QTVN1PROD with NOTICES
Sunshine Act Meeting
Pursuant to the provisions of the
‘‘Government in the Sunshine Act’’ (5
U.S.C. 552b), notice is hereby given that
at 10:00 a.m. on Tuesday, March 19,
2013, the Board of Directors of the
Federal Deposit Insurance Corporation
met in closed session to consider
matters related to the Corporation’s
supervision, corporate, and resolution
activities.
In calling the meeting, the Board
determined, on motion of Vice
Chairman Thomas M. Hoenig, seconded
by Director Jeremiah O. Norton
(Appointive), concurred in by Director
Thomas J. Curry (Comptroller of the
Currency), Director Richard Cordray
(Director, Consumer Financial
Protection Bureau), and Chairman
Martin J. Gruenberg, that Corporation
business required its consideration of
the matters which were to be the subject
of this meeting on less than seven days’
notice to the public; that no earlier
notice of the meeting was practicable;
that the public interest did not require
consideration of the matters in a
meeting open to public observation; and
that the matters could be considered in
a closed meeting by authority of
subsections (c)(4), (c)(6), (c)(8),
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(c)(9)(A)(ii), (c)(9)(B), and (c)(10) of the
‘‘Government in the Sunshine Act’’ (5
U.S.C. 552b(c)(4), (c)(6), (c)(8),
(c)(9)(A)(ii), (c)(9)(B), and (c)(10)).
The meeting was held in the Board
Room of the FDIC Building located at
550–17th Street NW., Washington, D.C.
Dated: March 19, 2013.
Robert E. Feldman,
Executive Secretary, Federal Deposit
Insurance Corporation.
[FR Doc. 2013–06615 Filed 3–19–13; 4:15 pm]
BILLING CODE P
FEDERAL HOUSING FINANCE
AGENCY
[No. 2013–N–03]
No FEAR Act Notice
Federal Housing Finance
Agency.
ACTION: Notice.
AGENCY:
SUMMARY: The Federal Housing Finance
Agency (FHFA or agency) is providing
notice to all its employees, former
employees, and applicants for
employment about the rights and
remedies that are available to them
under the Federal antidiscrimination
laws and whistleblower protection laws.
This notice fulfills FHFA’s notification
obligations under the Notification and
Federal Employees Antidiscrimination
Retaliation Act as implemented by
Office of Personnel Management
regulations.
FOR FURTHER INFORMATION CONTACT:
Nancy Burnett, Acting Associate
Director of the Office of Minority and
Women Inclusion,
Nancy.Burnett@fhfa.gov, (202) 649–
3017; Brian Guy, Manager of EEO
Services, Brian.Guy@fhfa.gov, (202)
649–3019; or Janice Kullman, Associate
General Counsel,
Janice.Kullman@fhfa.gov, (202) 649–
3077 (not toll-free numbers), Federal
Housing Finance Agency, 400 Seventh
Street SW., Washington, DC 20024. The
telephone number for the
Telecommunications Device for the Deaf
is (800) 877–8339.
SUPPLEMENTARY INFORMATION: On May
15, 2002, Congress enacted the
Notification and Federal Employee
Antidiscrimination and Retaliation Act
of 2002, which is now known as the No
FEAR Act (No FEAR Act), (Pub. L. 107–
174). One purpose of the No FEAR Act
is to require that Federal agencies be
accountable for violations of
antidiscrimination and whistleblower
protection laws. In support of this
purpose, Congress found that agencies
PO 00000
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cannot be run effectively if those
agencies practice or tolerate
discrimination.
The No FEAR Act also requires
Federal agencies to inform Federal
employees, former Federal employees,
and applicants for Federal employment
of the rights and protections available to
them under Federal antidiscrimination
and whistleblower protection laws.
Establishment of a New Independent
Agency
Effective July 30, 2008, the Housing
and Economic Recovery Act of 2008
(HERA), (Pub. L. 110–289), established
FHFA as an independent agency of the
Federal Government. HERA also
combined the staffs of the Office of
Federal Housing Enterprise Oversight
(OFHEO), the Federal Housing Finance
Board (FHFB), and the GovernmentSponsored Enterprise mission office of
the Department of Housing and Urban
Development. Although each
predecessor agency published its own
No FEAR Act notice during 2006 (See
71 FR 63761 (Oct. 31, 2006) and 71 FR
70525 (Dec. 5, 2006)), FHFA is now
publishing its own notice to affirm its
commitment to the requirements of the
No FEAR Act.
Antidiscrimination Laws
A Federal agency cannot discriminate
against an employee or applicant with
respect to the terms, conditions, or
privileges of employment on the basis of
race, color, religion, sex, national origin,
age, disability, marital status, or
political affiliation. Discrimination on
these bases is prohibited by one or more
of the following statutes: 5 U.S.C.
2302(b)(1), 29 U.S.C. 206(d), 29 U.S.C.
631, 29 U.S.C. 633a, 29 U.S.C. 791, and
42 U.S.C. 2000e–16.
If you believe that you have been the
victim of unlawful discrimination on
the basis of race, color, religion, sex,
national origin, or disability, you must
contact an Equal Employment
Opportunity (EEO) counselor within 45
calendar days of the alleged
discriminatory action, or, in the case of
a personnel action, within 45 calendar
days of the effective date of the action,
before you can file a formal complaint
of discrimination with your agency. See,
e.g., 29 CFR 1614. If you believe that
you have been the victim of unlawful
discrimination on the basis of age, you
must either contact an EEO counselor as
noted above or give notice of intent to
sue to the Equal Employment
Opportunity Commission (EEOC) within
180 calendar days of the alleged
discriminatory action. If you are alleging
discrimination based on marital status
or political affiliation, you may file a
E:\FR\FM\21MRN1.SGM
21MRN1
Agencies
[Federal Register Volume 78, Number 55 (Thursday, March 21, 2013)]
[Notices]
[Pages 17395-17403]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-06548]
=======================================================================
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
[MB Docket No. 13-50; DA 13-281]
Media Bureau Announces Filing of Request for Clarification of the
Commission's Policies and Procedures Under the Communications Act by
the Coalition for Broadcast Investment
AGENCY: Federal Communications Commission.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: This document seeks comment on an August 31, 2012 letter from
the Coalition for Broadcast Investment asking the Commission to
[[Page 17396]]
clarify its policies and procedures under Section 310(b)(4) of the
Communications Act, 47 U.S.C. 310(b)(4), which restricts foreign
ownership and voting interests in entities that control Commission
licensees.
DATES: Interested parties may file comments on or before April 15,
2013, and reply comments on or before April 30, 2013.
FOR FURTHER INFORMATION CONTACT: Jake Riehm, Media Bureau (202) 418-
2166, or email at Jake.Riehm@fcc.gov.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Commission's
document in MB Docket No. 13-50, DA 13-281, released February 26, 2013.
The complete text of the document is available for inspection and
copying during normal business hours in the FCC Reference Center, 445
12th Street SW., Washington, DC 20554, and may also be purchased from
the Commission's copy contractor, BCPI, Inc., Portals II, 445 12th
Street SW., Washington, DC 20054. Customers may contact BCPI, Inc. at
their Web site https://www.bcpi.com or call 1-800-378-3160.
Summary of the Public Notice
1. On August 31, 2012, the Coalition for Broadcast Investment (CBI)
submitted a letter (the Letter) asking the Commission to clarify its
policies and procedures under Section 310(b)(4) of the Communications
Act, 47 U.S.C. Section 310(b)(4), which restricts foreign ownership and
voting interests in entities that control Commission licensees. CBI
states that it is a group comprised of national broadcast networks,
radio and television station licensees, and community and consumer
organizations. Specifically, CBI asks the Commission to clarify that it
will conduct a substantive, facts and circumstances evaluation of
proposals for foreign investment in excess of 25 percent in the parent
company of a broadcast licensee, consistent with and in furtherance of
its authority under 47 U.S.C. Section 310(b)(4).
2. The Media Bureau invites public comment on the Letter from
interested parties. The complete text of the Letter dated August 31,
2012, is as follows:
3. We write on behalf of the Coalition for Broadcast Investment *
to ask the Commission to clarify and affirm, at the earliest possible
time, the following:
---------------------------------------------------------------------------
* The Coalition for Broadcast Investment seeks to promote
enhanced access to capital by U.S. broadcasters. The Coalition
believes that access to additional and new sources of investment
capital will benefit the broadcast industry and American consumers
by financing advanced infrastructure, innovative services and high
quality programming; and by promoting the creation of highly
skilled, well-paying jobs. Coalition members comprise national
broadcast networks, radio and television station licensees and
community and consumer organizations. A list of Coalition members is
attached.
---------------------------------------------------------------------------
Going forward, the FCC will conduct substantive, facts and
circumstances evaluation of proposals for foreign investment in excess
of 25 percent in the parent company of a broadcast licensee, consistent
with and in furtherance of its authority under Section 310(b)(4) of the
Communications Act.
4. For the avoidance of doubt, we seek here only confirmation of
the Commission's intent to exercise its statutory discretion to
consider, in any particular case, whether it would serve the public
interest to authorize, condition, or disallow proposed foreign
investment in excess of the 25 percent benchmark.
5. The clarification requested here is squarely within the
Commission's existing statutory authority and would neither change (or
require any change in) any FCC rule nor predetermine the outcome of any
particular case. Rather, we are asking the Commission merely to advise
the public prospectively of the manner in which [it] proposes to
exercise a discretionary power granted to it by Congress under Section
310(b)(4) of the Act. American Mining Cong. v. Mine Safety and Health
Admin., 995 F.2d 1106, 1109 (D.C. Cir. 1993).
6. Taking this modest procedural step would place broadcasters on
the same footing as every other industry participant and signal that
the broadcast sector continues to be a vital and valued part of the
21st-century media and telecommunications ecosystem. It would send a
positive and powerful message to the industry, the capital markets,
viewers, listeners and advertisers alike that in the appropriate
circumstances U.S. broadcasters may be afforded access to new sources
of capital. It would incent entry into the broadcast sector, including
by minority- and women-owned businesses. It would facilitate investment
in new services and infrastructure, create jobs and, ultimately,
enhance service to local communities and their viewers and listeners.
7. Absent a clear statement from the Commission, the marketplace
will continue to assume that proposals for above-benchmark foreign
investment in broadcasters will not even be considered regardless of
the facts and circumstances presented or the merits of a particular
proposal. As a result, transactions that the Commission may have found
to enhance local broadcast service will continue never to see the light
of day--an outcome that surely would disserve the public interest.
Introduction and Summary
8. Clarifying that the Commission is prepared to exercise its
discretion with respect to broadcast proposals under Section 310(b)(4)
would acknowledge the competitive realities of the 21st century
telecommunications and media environment. Today, programmers, consumers
and advertisers have at their fingertips a multitude of choices on
radio, television, cable and satellite services, mobile devices, the
Internet, and elsewhere.
9. The Commission's Discretion under Section 310(b)(4). Nearly 80
years ago, Congress established a 25 percent flexible benchmark with
respect to aggregate foreign investment in the parent company of a
broadcast or common carrier licensee. Section 310(b)(4) of the
Communications Act of 1934, as amended, provides, in pertinent part:
(b) No broadcast or common carrier * * * license shall be granted
to or held by
* * * * *
(4) any corporation directly or indirectly controlled by any other
corporation of which more than one-fourth of the capital stock is owned
of record or voted by aliens, their representatives, or by a foreign
government or representative thereof, or by any corporation organized
under the laws of a foreign country, if the Commission finds that the
public interest will be served by the refusal or revocation of such
license.
47 U.S.C. 310(b)(4).
10. The text of Section 310(b)(4) makes clear that the 25 percent
figure was intended to be a public interest yardstick only, and not a
cap. Under the plain language of the Act the FCC is authorized to
disallow a particular instance of foreign investment in excess of the
benchmark only upon a finding that the public interest will be served
by prohibiting it. Just two weeks ago the Commission reiterated that it
has discretion under Section 310(b)(4) to permit foreign investment
above the 25 percent benchmark unless it finds such ownership would be
inconsistent with the public interest. Review of Foreign Ownership
Policies for Common Carrier and Aeronautical Radio Licensees under
Section 310(b)(4) of the Communications Act of 1934, as Amended, Report
and Order, FCC 12-93 (rel. Aug. 17, 2012) (adopting a proposal
[[Page 17397]]
set out in Public Notice, International Bureau Seeks Further Comment on
Foreign Ownership Policies: Forbearance from Section 310(b)(3) for
Common Carrier Licensees, 27 FCC Rcd 3946 (Int'l Bur., 2012)) (the
Forbearance Order) at 3 (Section 5).
11. Consistent with the language and intent of Section 310(b)(4),
the Commission repeatedly has evaluated above-benchmark foreign
investment in the common carrier context and exercised its discretion
to approve or condition such investment when and as appropriate. Yet,
at the same time, the Commission to date has maintained what the FCC
itself has characterized as an irrefutable presumption against even
considering--much less authorizing-- proposals for foreign investment
in broadcasters that would exceed the 25 percent benchmark.
12. Changed circumstances. The Commission's refusal even to
consider exercising its discretion under Section 310(b)(4) in the
broadcast context has been attributed variously to concerns that
foreign governments could disrupt communications during wartime or
commandeer public opinion through propaganda aired on radio and
television stations. Regardless of whether the American public ever
could have been susceptible to such perceived threats, technological
and marketplace developments have obviated these concerns.
Americans live, work and play in a multichannel, multi-
platform environment in which they can produce and consume content
freely--locally, nationally, and internationally.
[rtarr8] Today, in addition to broadcasting, many other sources of
information are available to the U.S. public.
[rtarr8] Today, consumers have access to local, national, and
international news and information from myriad sources-- including the
Internet, mobile applications, video and audio streaming services,
cable and satellite programming networks, and social networking tools.
None of these outlets are subject to limitations on foreign investment.
At the same time, the Commission has developed substantial
expertise and tools to evaluate the merits of proposed foreign
investment.
[rtarr8] The Commission routinely conducts on-the-merits reviews of
foreign investment in common carriers pursuant to a presumption that
the public interest is served by capital sourced from WTO-member
states.
[rtarr8] Close coordination with federal national security agencies
ensures that U.S. security interests are taken into account and that,
where appropriate, transactions are conditioned or disapproved.
13. Public interest benefits. The modest relief requested here
would enable local broadcast stations to join their cable, satellite
and online counterparts in having the opportunity to gain access to
significant new or additional sources of capital. Ceasing to single out
broadcasters, and broadcasters alone, for a per se ban on above-
benchmark foreign investment would ensure that common carrier and
broadcast licensees' respective ability to participate in world capital
markets is not determined by a false dichotomy in the application of
the statutory benchmark.
Broadcasters should be able to access the capital markets
on the same terms as their unregulated competitors.
[rtarr8] In the multiplatform, multi-channel environment in which
broadcasters now compete, being the sole medium without even potential
access to above-benchmark levels of foreign capital is arbitrary and
inequitable.
[rtarr8] This is especially true at a time when the Commission has
liberalized its foreign investment policies and procedures for common
carriers, which are subject to the same statutory regime as
broadcasters for evaluation of foreign investment.
In exercising its discretion to consider proposals for
above-benchmark indirect foreign investment in broadcast licensees, the
Commission could provide new opportunities for minority businesses and
entrepreneurs, whose access to the domestic capital markets has been
limited, thereby advancing the public interest in viewpoint diversity
and media competition.
14. Alignment with U.S. Policy. Clarifying that the Commission will
no longer maintain an ad hoc presumption against above-benchmark
foreign investment in radio and television broadcasters would be
consistent with broader U.S. policy favoring inbound foreign
investment, a recognized source of jobs and capital for businesses that
operate locally in the United States. The irony in the persistence of
any historical presumption against inbound foreign investment in
broadcasters is that today, it is outbound investment that causes
debate among policymakers and the public alike--for example, the
transfer of a manufacturing plant to another country with lower labor
costs. It is remarkable that the world's leading economy would restrict
the broadcast sector, almost alone, in its ability to create jobs,
build infrastructure, and otherwise serve local American communities
using foreign capital.
As the White House stated in June 2011, The United States
welcomes the investment and jobs supported by the U.S. affiliates of
foreign-domiciled companies. These companies play an important role in
the U.S. economy, as they build plants and other facilities or provide
additional capital to businesses that already operate locally in the
United States.
See SelectUSA, available at https://selectusa.commerce.gov,
a U.S. government site listing as industries represent[ing]
unparalleled opportunity for global growth and success aerospace,
automotive, biotechnology, chemical, consumer goods, creative and
media, energy, environmental technology, financial services, healthcare
and medical technology, logistics and transportation, machinery and
equipment, pharmaceuticals, professional services, retail trade,
semiconductors, software and information technology services, textiles,
and travel, tourism, and hospitality.
15. Authority to Act. The Coalition asks merely that the Commission
clarify that it will accept and consider on the merits proposals for
indirect foreign investment in broadcasters in excess of the 25 percent
benchmark. Such a clarification constitutes precisely the type of
``general statement[] of policy'' that the Commission is authorized to
make on its own motion pursuant to Section 553(b) of the Administrative
Procedure Act. 5 U.S.C. 553(b)(B). Indeed, in the Forbearance Order
issued earlier this month, the Commission clarified its intent, going
forward, to forbear in certain circumstances 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 interests
are held through U.S.-organized entities that do not control the
licensee.
16. A comprehensive discussion of the origins and historical
application of the Section 310(b)(4) benchmark, the Commission's
discretion under the statute, and the acknowledged public interest
benefits of enhanced access to capital, is set out in the Appendix. We
emphasize that the relief we are seeking here--a clear statement by the
Commission that, going forward, it will exercise its authority to
evaluate on the merits broadcast proposals under Section 310(b)(4)--
would not dictate the result of any particular substantive evaluation
precisely because, under the Act, the outcome of any review under
Section 310(b)(4) is within the Commission's discretion in the
application of its public interest test.
[[Page 17398]]
Conclusion
17. The Commission's effective presumption against enhanced foreign
investment in the broadcast sector no longer serves the public
interest--if it ever did. It deters investment in businesses that
provide service to local communities and invest in jobs and
infrastructure in those communities. It disadvantages a single class of
participants in an increasingly complex media and telecommunications
ecosystem that faces rigorous competition from firms that are not
subject to any restrictions on foreign investment. Meanwhile, the
concerns that once informed the Commission's presumptive policy have
lost their meaning.
18. Accordingly, for all the reasons stated herein and in the
Appendix, we respectfully request that the Commission promptly clarify
and affirm that, going forward, it will conduct a case-by-case
evaluation of proposals for foreign investment in U.S. broadcast
holding companies at levels exceeding the 25 percent benchmark.
19. Kindly direct any questions concerning this submission to the
undersigned.
Respectfully Submitted,
Mace Rosenstein
Gerald J. Waldron
Counsel for the Coalition for Broadcast Investment
Attachments
cc: Hon. Julius Genachowski, Chairman
Commissioner Robert McDowell
Commissioner Mignon Clyburn
Commissioner Ajit Pai
Commissioner Jessica Rosenworcel
The Coalition for Broadcast Investment
Adelante Media Group Bonten
Media Group BuenaVision
Television Network Bustos Media
Holdings, LLC CBS Corporation
Clear Channel Communications, Inc.
Cuban National Council
Emmis Communications Corporation
Entravision Communications Corporation
Hearst Television Inc.
International Black Broadcasters Association
ION Media Networks, Inc.
Latinos in Information Science and Technology Association
League of United Latin American Citizens LIN
Television Corporation d/b/a LIN Media
Minority Media & Telecommunications Council
National Association of Black County Officials
National Black Caucus--Local Elected Officials
National Black Chamber of Commerce
National Organization of Black Elected Legislative Women
The National Puerto Rican Chamber of Commerce
Nexstar Broadcasting Group Inc.
Schurz Communications Inc.
Sinclair Broadcast Group, Inc.
Una Vez Mas Television Group
United States Hispanic Chamber of Commerce
Univision Communications Inc.
The Walt Disney Company
Appendix
I. Historical Justifications for Disparate Treatment of Broadcasters
Under Section 310(b)(4) Have Been Overtaken by Technological and Market
Developments
20. The Commission has recognized that ``Congress has given [the
FCC] the flexibility to consider a broad range of factors, and to
adapt [its] policies and rules to reflect current conditions'' in
making its public interest determination under Section 310(b)(4).\1\
Just as the technological and competitive environment in which
broadcasters operate today was unimaginable in 1934, so the
historical moment in which the Commission first implemented Section
310(b)(4) is unrecognizable and, we would submit, irrelevant, today.
21. In the common carrier context the Commission, over time, has
modified its practices under Section 310(b)(4) in order to consider
and, where appropriate, authorize foreign investment in excess of
the statutory benchmark in order to encourage a more open and
competitive U.S. telecommunications market.\2\ Yet, during the same
period in which the Commission has, among other things, established
a rebuttable presumption in favor of foreign investment in common
carriers in most circumstances, it has effectively created the
presumption in the broadcast area that, absent special
considerations that outweigh the statutory concerns, the public
interest [would] be served by denying licenses to entities with
alien ownership above 25 percent.\3\
22. The Commission has discretion in applying the benchmark to
broadcast investment. Yet diametrically opposed presumptions--one in
favor of foreign investment for common carriers, another against
foreign investment for broadcasters--are at least anachronistic in
today's marketplace, as carriers continue to expand their service
offerings to deliver audio and video content to consumers, and to
compete directly with broadcast licensees for programming inputs,
advertisers and viewers.
23. We need not catalogue here nearly eight decades' worth of
disruptive innovation in the media and telecommunications industry
affecting common carriers and broadcasters alike. One thing is
clear: In the face of such momentous changes the Commission's
effective presumption against even the consideration of
broadcasters' Section 310(b)(4) proposals is neither justifiable nor
sustainable.
A. The Availability of Myriad Sources of News, Information, Sports,
and Entertainment Content Delivered Over Multiple Competing
Platforms Has Undermined the Commission's Historical Rationale for
Refusing To Consider Above-Benchmark Broadcast Foreign Investment
24. The historical justification for the Commission's
categorical refusal even to consider indirect broadcast foreign
investment above the 25 percent benchmark, dating from the earliest
days of wireless communications, was that foreign powers could
acquire and disrupt ship-to-shore and governmental communications
facilities during wartime.\4\ Later, with the emergence of
commercial broadcasting, some expressed concern that a hostile
foreign power could use broadcast outlets--which, at the time, were
the only real-time mass communications platform--to manipulate
American public opinion.
25. Even accepting the validity of those concerns for purposes
of argument, they reflect a factual predicate that long ago was
overtaken by marketplace and technological developments. Now, nearly
80 years following enactment of Section 310(b)(4), the media
landscape has been transformed.
Broadcast services compete with myriad sources of
information and entertainment in a highly and increasingly
competitive broadband environment.\5\
92 percent of Americans use multiple platforms to
access news and information content.\6\
Broadcast stations compete with other media outlets not
only for viewers and listeners, but also for advertising revenue.\7\
26. Broadcasters today must compete with a vast number of non-
broadcast media outlets for news and information--and diverse
editorial viewpoints--both domestically and from around the world.
These include satellite-delivered news channels owned and operated
by foreign governments, such as the RT (Russia Today) Network, Al
Jazeera, Deutsche Welle and the BBC; online news sites such as The
Guardian, Japan Today and The Jerusalem Post; Internet portals such
as Google, Yahoo! and AOL; and streaming video sites such as Hulu
and Bambuser--among others.\8\ Yet neither the countless competing
program services that vie for consumers' attention, nor the cable
and satellite systems and Internet service providers that deliver
them, are subject to presumptive--or any--limitations on foreign
investment.
The availability of rich and varied content, including
news and information programming, from around the world--as owned or
chosen by many non-U.S. persons--disseminated over the air, on cable
and satellite systems and on the Internet, has done no discernible
harm to the public interest. Nor has harm from such content been
alleged.
27. The FCC last considered adopting a more flexible approach to
foreign investment in the broadcast context in 1995--at the dawn of
the Internet age and before the explosion of information outlets
throughout our society and economy.\9\ Even then, the FCC
acknowledged that the burgeoning number of information and
entertainment
[[Page 17399]]
sources has lessened the concern that misinformation and propaganda
broadcast by alien-controlled licensees could overwhelm other media
voices.\10\ But in 1995 the Commission did not believe that the time
ha[d] yet come to ease restrictions on alien ownership of broadcast
license[e]s.\11\
28. The technological and commercial revolution that was only
beginning in 1995 has matured within the space of a generation. The
media marketplace is, truly, cacophonous, and each local broadcaster
must vie to be heard by consumers who are distracted by a
multiplicity of competing choices from here and abroad. There is no
basis in fact or law for continuing to impose an ad hoc ban on even
the consideration of indirect foreign investment above the statutory
benchmark in broadcast licensees.
B. The Perception That Foreign Editorial Control Over a U.S.
Broadcaster Poses a Greater National Security Risk Than Foreign
Control of Domestic Telecommunications Networks or Other Media
Outlets Is Outdated and Inaccurate
29. In contrast to what the Commission has characterized as its
``traditionally heightened concern for foreign influence over or
control of licensees which exercise editorial discretion over the
content of their transmissions,'' \12\ the Commission has justified
its willingness to consider foreign investment in common carrier
licensees on the ground that they are passive conduits for
information provided by others.\13\ But this outdated rationale,
too, can no longer be squared with the realities of
telecommunications technology and the media marketplace in the 21st
century.
30. Indeed, the current threat of greatest concern to
policymakers comes not from editorial control over broadcast
transmissions, but the possibility that foreign agents will engage
in cyber-warfare using our communications networks. President Obama
has identified cybersecurity as one of the most serious economic and
national security challenges we face as a nation.\14\ Chairman
Genachowski also has observed this phenomenon:
Broadband Internet--over wired and wireless communications
networks-- has transformed our economy and society, opening up a new
world of broad opportunity. $8 trillion are exchanged over these
wired and wireless networks each year, and growing. If you shut down
the Internet, you'd shut down our economy.\15\
31. In an era in which ostensibly passive wired and wireless
networks play such an essential role in our economy and society,
including the dissemination of data and information from around the
world, and yet routinely are permitted to exceed the benchmark, a
presumption against foreign investment on the basis that
broadcasting is a more active service simply makes no sense with
respect to communications, national security, trade or competition
policy concerns. Yet broadcasters continue to be subject to this
stark structural disadvantage vis-[agrave]-vis every other
participant in the 21st century media marketplace--cable television
operators, direct-to-home satellite systems, national and regional
non-broadcast programming networks, wireless broadband networks,
online content aggregators, Internet portals, Web site hosts, and
others.
C. The Commission Would Continue To Have Plenary Authority To
Enforce Commercial Broadcasters' Compliance With Their Public
Interest Obligations Under the Act
32. Notwithstanding their locus of ownership or investment,
broadcast stations are obligated under the Act to provide service in
the public interest to their local communities. We are not seeking
any change in those fundamental obligations. The Commission's
exercise of its discretion under Section 310(b)(4) to consider and,
where appropriate, authorize foreign investment in excess of the 25
percent benchmark would not abrogate its fundamental responsibility
under Section 310(d) of the Act to evaluate the nature and extent of
a broadcaster's service to its community--among other matters--to
determine whether a station license should be granted or renewed.
33. The Commission's authority to ensure that broadcasters
continue to discharge their obligations under the public interest
standard is analogous to its power to ensure that common carrier
licensees comply with the nondiscrimination provisions of the Act.
Significantly, the Commission has observed that, in its experience
in authorizing up to 100 percent foreign ownership and control of
U.S. wireless parent companies under section 310(b)(4), we find no
evidence that the foreign ownership of a common carrier licensee, in
and of itself, is directly relevant to the carrier's compliance with
its statutory obligations.\16\ Furthermore, because the other, more
tailored tools at [the Commission's] disposal'' enable it ``to
ensure that rates, practices and classifications of common carrier
licensees are just and reasonable and not unjustly or unreasonably
discriminatory, authorizing increased foreign investment ``would not
hinder the Commission's ability to enforce carriers' compliance with
their obligations under the Act * * *'' \17\
34. Similarly, in the broadcast context, precisely the same
tools that have always been available to the Commission under
Section 310(d) in the licensing and renewal processes--for example,
ensuring that local stations' programming decisions are responsive
to the needs, interests and concerns of their communities, and
reviewing broadcasters' compliance with the rules pertaining to
children's programming and political broadcasting, among other
things--will continue to enable the Commission to enforce
broadcasters' compliance with their obligations under the Act.
Meanwhile, improved access to foreign capital may enhance a
broadcast licensee's ability to meet its public interest obligations
by financing improvements in existing broadcast services and the
development of new and innovative ones.
II. Foreign Investment Is Beneficial for United States Industry and
Consumers and Could Benefit Broadcasters and the Communities They Serve
35. To gauge the opportunity costs of the Commission's
historical refusal to consider above-benchmark foreign investment in
broadcasters one need look no further than the telecommunications
industry and the many competitive and consumer benefits of inbound
foreign investment in that sector. Today, [f]ew sectors are more
global than telecommunications. Telecommunications technology,
services, and equipment are a major driver of trade, growth, and
innovation.\18\ Globalization, growth, and innovation are a direct
result of the discretion the Commission has exercised to consider
and, where appropriate after a merits-based review, authorize
foreign investment in common carriers in excess of the statutory
benchmark.
36. The impact of foreign investment on the U.S.
telecommunications industry is well documented. Foreign investment
has proven to be an important source of equity financing for U.S.
telecommunications companies, fostering technical innovation,
economic growth, and job creation.\19\
Verizon Wireless, the nation's largest wireless
provider, is a joint venture of Verizon Communications, Inc., and
Vodafone Group PLC, a United Kingdom Company.\20\ Verizon Wireless
owns and operates the nation's largest 4G LTE network, covering more
than 200 million people in more than 230 markets across the United
States.\21\
T-Mobile USA, Inc., a wholly owned subsidiary of German
telecommunications provider Deutsche Telekom AG, is the fourth
largest wireless provider in the United States by
subscribership.\22\ The Commission has recognized the important role
foreign-owned T-Mobile has played in the development of a more
competitive mobile services marketplace by engaging in both pricing
and technical innovation.\23\
37. Other sectors of the telecommunications industry likewise
have benefited from significant foreign investment made possible by
the Commission's exercise of its discretion under Section 310(b)(4).
The Commission has approved above-benchmark foreign
investment in Global Crossing Ltd., a major Tier One common carrier
and Internet Service Provider, and in Level 3, a major Department of
Defense contractor.\24\ The merged companies' extensive U.S. and
international network reaches more than 450 core markets in North
America, Latin America, Europe, the Middle East, Africa, and
Asia.\25\
The Commission has twice exercised its statutory
discretion to permit significant foreign investment in Iridium,\26\
an integral element in the U.S. Government's communications
infrastructure, approximately 25 percent of whose revenue is
attributable to its contracts as a communications services provider
to the Department of Defense.\27\
38. As recently as August 17, 2012, the Commission reiterated
its belief ``that providing greater flexibility in the structuring
of foreign investment in common carrier licensees will enhance
opportunities for technological innovation and promote economic
growth and potential job creation in the telecommunications
sector.'' \28\ By contrast, the Commission's refusal even to
consider transactions involving indirect foreign investment in
excess of 25 percent in
[[Page 17400]]
broadcasters has deprived the broadcast sector of needed and
available capital and its concomitant benefits. It is, of course,
impossible to quantify precisely the effect of the Commission's
policy on the broadcast sector or American consumers. Because the
industry understands the Commission's policy to result in an
effective irrefutable presumption against foreign investment,
broadcasters do not even seek Commission review of potentially
beneficial transactions.
39. Nevertheless, just as the telecommunications sector and
other industries benefit from enhanced growth and productivity, job
creation and increased competition as a result of foreign
investment, there is ample basis to conclude that broadcasters and
the American public likewise would benefit from broadcasters'
enhanced access to foreign capital. In fact, a more balanced
approach to inbound foreign investment in broadcasting would serve
several historical goals of U.S. telecommunications policy.
------------------------------------------------------------------------
Potential effect of enhanced foreign
Policy goal investment in broadcasting
------------------------------------------------------------------------
Diversity........................ In exercising its discretion
to consider proposals for above-
benchmark indirect foreign
investment in broadcast licensees,
the Commission could provide new
opportunities for minority- and
women-owned businesses and
entrepreneurs whose access to the
domestic capital markets has been
limited.\29\
Several public interest
organizations and the Commission's
own Advisory Committee for Diversity
have demonstrated that revisiting
the Commission's broadcast policy
under Section 310(b)(4) could
advance the public interest in media
diversity.\30\
Innovation....................... Expanding broadcasters'
access to capital would enable them
to expand the services they offer
their communities and to provide a
competitive spur to other media
companies to do the same.
Broadcasters already have
begun to use mobile applications and
social media to coordinate responses
to emergencies or to keep the public
continuously updated on local and
national news issues.\31\
Radio stations are investing
millions of dollars in digital
technology to augment and expand
their service to local communities.
Improved access to capital
would facilitate the implementation
of these initiatives and fund the
development of new, as yet
unforeseeable, innovations.
Competition...................... A more conducive environment
for foreign investment in
broadcasting would promote the
Commission's policy of fostering
competition in the marketplace for
the delivery of video
programming.\32\
Broadcasters should be able
to seek access to the same sources
of investment capital that are
available to their unregulated
competitors.
As Chairman Genachowski
observed in a recent speech to the
National Association of
Broadcasters, in order to compete in
the dramatically changed multi-
platform digital broadband world,
broadcasters must pursue innovative
strategies to reach audiences in new
ways and are investing millions of
dollars in digital products to serve
their communities.\33\
------------------------------------------------------------------------
40. But these and other benefits that could be realized by
facilitating broadcasters' access to capital will not, and cannot,
materialize without the clarification we are requesting here. Absent
guidance from the Commission, broadcasters and the capital markets
will continue to assume that any proposal seeking authorization
under Section 310(b)(4) for above-benchmark foreign investment will
be denied, or effectively denied by not being acted on.
III. The Commission Has the Expertise and Resources Necessary To
Evaluate Broadcast Sector Foreign Investment as a Result of Its
Historical Exercise of Its Section 310(b)(4) Discretion in the Common
Carrier Sector
41. The FCC already possesses the substantive expertise,
practical experience and institutional resources to conduct on-the-
merits reviews of indirect foreign investment in broadcast
licensees, based upon its extensive and ongoing experience under
Section 310(b)(4) in reviewing transactions involving foreign
investment in the parent companies of common carrier licensees. The
Commission has considered and approved, denied or (where
appropriate) conditioned numerous instances of indirect foreign
investment in excess of the statutory benchmark. Furthermore, in
doing so, the Commission has evaluated the potential costs and
benefits of foreign investment to the telecommunications industry
and American consumers, including with respect to competition and
diversity.
42. In exercising its Section 310(b)(4) responsibility with
respect to common carrier licensees, the Commission has developed
and refined the procedures and criteria generally applicable to the
consideration of above-benchmark foreign investment in harmony with
its recognition of the benefits of foreign investment in the U.S.
telecommunications industry:
[[Page 17401]]
[GRAPHIC] [TIFF OMITTED] TN21MR13.106
The Commission's consideration of proposed broadcast foreign
investment could include the same factors that inform the exercise
of its Section 310(b)(4) discretion with respect to common carrier
licensees. For example, looking to whether the source country or
countries enjoy ``close and friendly relations with the United
States'' could help the Commission determine whether a proposed
transaction implicates a national security concern.\34\
43. In addition, today the Commission regularly refers requests
for declaratory rulings under Section 310(b)(4) to Team Telecom, an
interagency group consisting of representatives of the Department of
Justice, the Federal Bureau of Investigation and the Department of
Homeland Security, and grants those agencies de facto authority to
disallow a transaction unless and until any national security
concerns have been addressed.\35\ Alternatively, Team Telecom can,
and often does, intervene on its own motion in FCC foreign ownership
review proceedings, requesting that the FCC defer action on a
transaction until such time as Team Telecom's national security
analysis has been completed. Where the Team Telecom agencies have
concerns about potential national security implications of a
transaction, they typically require the transaction parties to enter
into national security agreements as a condition of approval. These
requirements, in turn, are relevant to the Commission's ultimate
determination whether the proposed investment would disserve the
public interest under Section 310(b)(4).\36\
44. The Team Telecom process ensures that broadcast transactions
proposing foreign investment in excess of the 25 percent benchmark
would receive a second-line review that was not available at the
time the Commission developed its presumption against such
investment; indeed, under existing procedures, the FCC will not
authorize foreign investment subject to a Section 310(b)(4) review
until it has been authorized to do so by Team Telecom. The
Commission itself reiterated earlier this month in the Forbearance
Order that authorizing above-benchmark foreign investment does not
impair national security because the Commission's Section 310(b)(4)
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.\37\
45. The Commission's historical exercise of its statutory
responsibility under Section 310(b)(4) with respect to common
carrier licensees is doubly instructive. First, it demonstrates that
the Commission already possesses the technical expertise and
resources needed to review and analyze indirect foreign investment.
Second, it confirms that the Commission is capable of exercising its
ultimate discretion under Section 310(b)(4) in a manner that both
serves the Act's fundamental public interest requirements and is
cognizant of, and responsive to, the competitive dynamics of a
flourishing and increasingly global telecommunications industry--all
to the benefit of the U.S. telecommunications industry and American
consumers.
46. The Commission already is equally well equipped to review
indirect foreign investment in broadcast licensees and can satisfy
Congress's directive in Section 310(b)(4) by taking into
consideration bedrock communications policy tenets such as promoting
competition and fostering media diversity; by ensuring that the
national security is protected and that no other public interest
harms are likely to materialize; and by taking into consideration
the acknowledged benefits of technological innovation, economic
growth and job creation.
Notes and References
\1\ Review of Foreign Ownership Policies for Common Carrier and
Aeronautical Radio Licensees Under Section 310(b)(4) of the
Communications Act of 1934, as Amended, Notice of Proposed
Rulemaking, FCC 11-121 (rel. Aug. 9, 2011) (2011 NPRM), at para. 3.
\2\ Market Entry and Regulation of Foreign-Affiliated Entities,
Report and Order, 12 FCC Rcd 23891 (1995) (ECO Order), at para. 183.
\3\ Fox Television Stations, Inc., 11 FCC Rcd 5714 (1995), at
para. 21 (Fox II) (emphasis added).
\4\ See, e.g., Radio Communication: Hearings on S. 3620 and S.
5334 Before the House
[[Page 17402]]
Commerce Committee, 62nd Cong. 35-37 (Mar. 1, 1912).
\5\ See Steven Waldman et al., The Information Needs of
Communities (July 2011), at 73 (describing broadcast audience drift
to cable, satellite, and the Internet.
\6\ Kristen Purcell et al., Understanding the Participatory News
Customer (March 2010), available at https://www.pewinternet.org/Reports/2010/Online-News.aspx.
\7\ Pew Research Center, Project for Excellence in Journalism,
2012 State of the News Media, available at https://stateofthemedia.org/ (2012 State of the Media).
\8\ LinkTV, available on DirecTV and Dish Network, which brings
satellite news from around the world to American households, Paul
Wilner, Broadcasting a Global Sampler, The New York Times (Jan. 13,
2008), available at https://query.nytimes.com/gst/fullpage.html?res=9D03E6DC1739F930A25752C0A96E9C8B63&
pagewanted=all, provides a unique perspective on international news,
current events, and diverse cultures, presenting issues not often
covered in the U.S. media. About Link TV, available at https://www.linktv.org/about.
\9\ ECO Order at paras. 190-94.
\10\ Id. at para. 194.
\11\ Id.
\12\ Market Entry and Regulation of Foreign-Affiliated Entities,
Notice of Proposed Rulemaking, 10 FCC Rcd 4884 (1995), at paras. 99-
101.
\13\ See, e.g., GRC Cablevision, 47 FCC 2d 467, at para. 5
(1974); Cable & Wireless, Inc. 10 FCC Rcd 13177, at para. 18 (1995)
(We have concluded that concern about the effect of alien ownership
is lessened when common carrier radio licenses are involved because
they are `passive' in nature and there is no control over the
content of the transmission.).
\14\ National Security Council, The Comprehensive National
Cybersecurity Initiative, available at https://www.whitehouse.gov/cybersecurity/comprehensive-national-cybersecurity-initiative.
\15\ Prepared Remarks of FCC Chairman Julius Genachowski,
Bipartisan Policy Center, Washington, DC, Feb. 22, 2012, available
at https://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-312602A1.pdf.
\16\ Forbearance Order at para. 15.
\17\ Id.
\18\ Ambassador Kirk Announces Results of Annual 1377 Review,
Press Release, Office of the United States Trade Representative
(April 2010), available at https://www.ustr.gov/about-us/press-office/press-releases/2010/april/ambassador-kirk-announces-results-annual-1377-review.
\19\ 2011 NPRM at para. 2.
\20\ See Cellco Partnership d/b/a/Verizon Wireless and Atlantis
Holdings LLC, 23 FCC Rcd 17444, at paras. 6-8 (2008).
\21\ Verizon Wireless Facts-at-a-Glance, available at https://aboutus.verizonwireless.com/ataglance.html.
\22\ AT&T Inc. and Deutsche Telekom AG, Staff Analysis and
Findings, 26 FCC Rcd 1184, at para. 8 (November 2011).
\23\ Id. at para. 22.
\24\ Global Crossing Ltd., 18 FCC Rcd 20301 (2003).
\25\ Level 3 Company History, available at https://www.level3.com/en/about-us/company-information/company-history/.
\26\ Space Station System Licensee, Inc., 17 FCC Rcd 2271
(2002); Iridium Holdings LLC and Iridium Carrier Holdings LLC, 24
FCC Rcd 10725 (2009).
\27\ Iridium Announces Fourth-Quarter and Full-Year 2011
Results, Press Release (Mar. 6, 2012), available at https://investor.iridium.com/releasedetail.cfm?ReleaseID=654525; Elizabeth
Woyke, Satellite Phone Surge, Forbes.com (Sept. 2008), available at
https://www.forbes.com/2008/09/16/satellite-phones-disaster-techsolutions08-personal-cx_ew_0916satphone.html.
\28\ Forbearance Order at para. 3.
\29\ 2010 Quadrennial Regulatory Review, Reply Comments of the
Minority Media and Telecommunications Council, MB Docket No. 09-182,
at 4 (filed Jul. 26, 2010).
\30\ See Advisory Committee on Diversity, Recommendation on
Adoption of a Declaratory Ruling on Section 310(b)(4) Waivers (Dec.
10, 2004), available at https://www.fcc.gov/DiversityFAC/adopted-recommendations/ForeignOwnershipFinal.doc; see also 2006 Quadrennial
Regulatory Review, Initial Comments of the Diversity and Competition
Supporters in Response to the Second Further Notice of Proposed
Rulemaking, MB Docket No. 06-121, at 3, 37-39 (filed Oct. 1, 2007).
\31\ 2012 State of the News Media.
\32\ See, e.g., Annual Assessment of the Status of Competition
in the Market for the Delivery of Video Programming, FCC 07-207
(2009).
\33\ Prepared Remarks of FCC Chairman Julius Genachowski, NAB
Show 2012, Las Vegas, Nevada, April 16, 2012, available at https://transition.fcc.gov/Daily_Releases/Daily_Business/2012/db0417/DOC-313605A1.pdf
\34\ GRC Cablevision at para. 5.
\35\ See FCC Homeland Security Liaison Activities (Mar. 2012),
available at https://transition.fcc.gov/pshs/docs/liaison.pdf.
\36\ See, e.g., Verizon Communications, Inc., 22 FCC Rcd 6195
(2007); Guam Cellular and Paging, Inc. and Docomo Guam Holdings,
Inc., 21 FCC Rcd 13580 (2006). Furthermore, the review process
administered by the Committee on Foreign Investment in the United
States (CFIUS) ensures that foreign investment in all market sectors
is thoroughly screened for any detrimental national security
implications. Although this process is voluntary, CFIUS is widely
used and provides statutory certainty to investors in the form of
firm timelines for review and ruling.
\37\ Forbearance Order at para. 20.
47. Procedural Matters: The proceeding this Notice initiates
shall be treated as a ``permit-but-disclose'' proceeding in
accordance with the Commission's ex parte rules.\1\ Persons making
ex parte presentations must file a copy of any written presentation
or a memorandum summarizing any oral presentation within two
business days after the presentation (unless a different deadline
applicable to the Sunshine period applies). Persons making oral ex
parte presentations are reminded that memoranda summarizing the
presentation must (1) list all persons attending or otherwise
participating in the meeting at which the ex parte presentation was
made, and (2) summarize all data presented and arguments made during
the presentation. If the presentation consisted in whole or in part
of the presentation of data or arguments already reflected in the
presenter's written comments, memoranda or other filings in the
proceeding, the presenter may provide citations to such data or
arguments in his or her prior comments, memoranda, or other filings
(specifying the relevant page and/or paragraph numbers where such
data or arguments can be found) in lieu of summarizing them in the
memorandum. Documents shown or given to Commission staff during ex
parte meetings are deemed to be written ex parte presentations and
must be filed consistent with rule 1.1206(b). In proceedings
governed by rule 1.49(f) or for which the Commission has made
available a method of electronic filing, written ex parte
presentations and memoranda summarizing oral ex parte presentations,
and all attachments thereto, must be filed through the electronic
comment filing system available for that proceeding, and must be
filed in their native format (e.g., .doc, .xml, .ppt, searchable
.pdf). Participants in this proceeding should familiarize themselves
with the Commission's ex parte rules.
---------------------------------------------------------------------------
\1\ 47 CFR para. 1.1200 et seq.
---------------------------------------------------------------------------
48. Comment Information: Pursuant to Sec. Sec. 1.415 and 1.419
of the Commission's rules, 47 CFR 1.415, 1.419, interested parties
may file comments and reply comments on or before the dates
indicated on the first page of this document. Comments may be filed
using: (1) The Commission's Electronic Comment Filing System (ECFS),
(2) the Federal Government's eRulemaking Portal, or (3) by filing
paper copies. See Electronic Filing of Documents in Rulemaking
Proceedings, 63 FR 24121 (1998).
[ssquf] Electronic Filers: Comments may be filed electronically
using the Internet by accessing the ECFS: https://fjallfoss.fcc.gov/ecfs2/ or the Federal eRulemaking Portal: https://www.regulations.gov.
[ssquf] For ECFS filers, if multiple docket or rulemaking
numbers appear in the caption of this proceeding, filers must
transmit one electronic copy of the comments for each docket or
rulemaking number referenced in the caption. In completing the
transmittal screen, filers should include their full name, U.S.
Postal Service mailing address, and the applicable docket or
rulemaking number. Parties may also submit an electronic comment by
Internet email. To get filing instructions, filers should send an
email to ecfs@fcc.gov, and include the following words in the body
of the message ``get form.'' A Sample form and directions will be
sent in response.
[ssquf] Paper Filers: Parties who choose to file by paper must
file an original and four copies of each filing. If more than one
docket or rulemaking number appears in the caption of this
proceeding, filers must submit two additional copies for each
additional docket or rulemaking number.
Filings can be sent by hand or messenger delivery, by commercial
overnight courier, or
[[Page 17403]]
by first-class or overnight U.S. Postal Service mail. All filings
must be addressed to the Commission's Secretary, Office of the
Secretary, Federal Communications Commission.
[ssquf] All hand-delivered or messenger-delivered paper filings
for the Commission's Secretary must be delivered to FCC Headquarters
at 445 12th St. SW., Room TW-A325, Washington, DC 20554. The filing
hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held
together with rubber bands or fasteners. Any envelopes must be
disposed of before entering the building.
[ssquf] Commercial overnight mail (other than U.S. Postal
Service Express Mail and Priority Mail) must be sent to 9300 East
Hampton Drive, Capitol Heights, MD 20743.
[ssquf] U.S. Postal Service first-class, Express, and Priority
mail must be addressed to 445 12th Street SW., Washington DC 20554.
[ssquf] People with Disabilities: To request materials 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).
Federal Communications Commission.
Thomas Horan,
Chief of Staff, Media Bureau.
[FR Doc. 2013-06548 Filed 3-20-13; 8:45 am]
BILLING CODE 6712-01-P