[Federal Register Volume 61, Number 209 (Monday, October 28, 1996)]
[Rules and Regulations]
[Pages 55579-55582]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-27289]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 20, 21, 22, 24, 26, 80, 87, 90, 100, and 101
[FCC 96-396]
Implementation of Section 403(k) of the Telecommunications Act of
1996 (Citizenship Requirements)
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: Section 403(k) of the Telecommunications Act of 1996 amends
Sections 310(b) (3) and (4) of the Communications Act of 1934 to remove
the restrictions against corporate licensees having alien officers and
directors. To implement that statutory change, the Commission has
amended rules relating to the citizenship of licensees of broadcast,
common carrier, aeronautical en route, and aeronautical fixed radio
stations to conform to the new statutory language. The Commission has
also modified in part related policies regarding partnerships that it
had adopted to implement the (now repealed) restrictions on foreign
officers and directors.
EFFECTIVE DATE: October 28, 1996.
FOR FURTHER INFORMATION CONTACT: S. Lee Martin, Office of General
Counsel, (202) 418-1754.
SUPPLEMENTARY INFORMATION:
Adopted: September 27, 1996
Released: October 9, 1996
1. On February 8, 1996, the Telecommunications Act of 1996 became
law.1 Section 403(k) of the Telecom Act amends sections 310(b) (3)
and (4) of the Communications Act of 1934 to remove the restrictions
against corporate licensees having alien officers or directors. In this
order, we amend certain Commission rules relating to the citizenship
requirements for licenses for broadcast, common carrier, aeronautical
en route, and aeronautical fixed radio stations to conform to the
amended statutory language. To further implement the statutory change,
we also modify in part certain policies treating certain alien partners
as the equivalent of alien officers and directors set forth in Request
for Declaratory Ruling Concerning the Citizenship Requirements of
Section 310(b)(3) and (4) of the Communications Act of 1934, as
amended, 103 FCC 2d 511 (1985), recon. in part, 1 FCC Rcd 12 (1986)
(Wilner and Scheiner) and in Market Entry and Regulation of Foreign-
affiliated Entities, 60 FR 67332 (Dec. 29, 1995) (Foreign Carrier Entry
Order).
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\1\ Pub. L. 104-104, 110 Stat. 56 (1996) (``1996
Telecommunications Act'').
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2. Section 310(b) of the Communications Act applies to licenses for
broadcast, common carrier, aeronautical en route, and aeronautical
fixed radio stations. Prior to enactment of the Telecom Act, section
310(b)(3) precluded a license being granted to or held by any
corporation with any alien officer or director, or by a corporation in
which more than one-fifth of the capital stock was owned or voted by
aliens. The prior version of section 310(b)(4), which applies where
another corporation directly or indirectly controls a corporate
licensee, provided that the Commission may deny an application or
revoke a license where any officer of the parent corporation is an
alien, more than one-fourth of its directors are aliens, or more than
one-fourth of the capital stock is owned or voted by aliens, if it
finds that such denial or revocation serves the public interest.
3. To implement the statute, the Commission included the statutory
restrictions on alien ownership set forth in sections 310(b) (3) and
(4) in certain rules that define the eligibility criteria for holding
licenses for certain types of broadcast, common carrier, and
aeronautical stations. In addition, various other Commission actions,
while not codified, also effectuate these statutory provisions. In
Wilner and Scheiner we issued a declaratory ruling prescribing the
manner in which sections 310(b) (3) and (4) apply to corporate and
partnership interests. In doing so, we advised that the statutory
restrictions governing foreign officers or directors apply to partners
in a partnership without any limited partners, to general partners in a
limited partnership, and to non-insulated limited partners. 103 FCC 2d
at 520 n.43. And, in our Foreign Carrier Entry Order, 11 FCC Rcd at
3941-56 Paras. 179-219, we adopted an ``effective competitive
opportunities'' test to be considered, along with additional public
interest factors, in deciding whether it is in the public interest to
permit alien ownership of licensees of common carrier radio facilities
in excess of the statutory benchmarks set forth in section 310(b)(4).
We identified several factors as being germane to this analysis,
including ``the extent of alien participation in the applicant's parent
corporation (in particular the presence of alien officers and directors
in excess of the statutory benchmarks).'' Id. at 3955 para. 216.
4. Section 403 of the Telecom Act provides for the elimination of
unnecessary Commission regulations and functions. In this context,
section 403(k) amends sections 310(b) (3) and (4) to remove the
restriction on a broadcast, common carrier, or aeronautical license
being held by or granted to a corporation having alien officers or
directors. The restrictions on how much of the capital stock may be
owned or voted by aliens have not been changed.
5. Current Commission rules that govern the licensing of commercial
mobile radio services (Part 20), domestic public fixed radio services
(Part 21), public mobile services (Part 22),
[[Page 55580]]
narrowband and broadband personal communications services (Part 24),
general wireless communications service (Part 26), stations in the
maritime services (Part 80), aviation services (Part 87), private land
mobile radio services (Part 90), direct broadcast satellite service
(Part 100), and fixed microwave services (Part 101) 2 incorporate
verbatim the statutory restrictions on alien ownership embodied in
sections 310(b) (3) and (4). Accordingly, as reflected in the attached
Appendix, we amend the applicable rules that prescribe the citizenship
requirements for licensees in these various communications services to
eliminate the restrictions against corporations with alien officers or
directors. For other services, where these restrictions are not
codified in the rules, no changes to our rules are needed.
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\2\ See Reorganization and Revision of Parts 1, 2, 21, and 94 of
the Rules to Establish a New Part 101 Governing Terrestrial
Microwave Fixed Radio Services, 61 FR 26670 (May 28, 1996).
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6. Consistent with the elimination of the restrictions on alien
officers and directors of corporate licensees, we will also no longer
accord any independent significance under the statute to positions held
by aliens that may convey the power to manage the affairs of an
unincorporated entity or to bind a partnership--such as a general
partner or a noninsulated limited partner. Our action in this regard
does not alter our more general determination that, for purposes of
ownership attribution in connection with the multiple ownership rules,
general partners and noninsulated limited partners exercise powers and
exert influence functionally equivalent to officers and directors in a
corporation. Similarly, in applying the ``effective competition
opportunities'' test that we adopted in the Foreign Carrier Entry
Order, we will no longer consider the presence of alien officers and/or
directors in the parent company of a common carrier licensee in
determining, pursuant to section 310(b)(4), whether it serves the
public interest to allow an alien entity or combination of entities to
control more than 25 percent of the capital stock of a company that
directly or indirectly controls a common carrier licensee.
7. In making these changes to our rules and policies, we emphasize
that, since Congress has retained those portions of sections 310 (b)(3)
and (b)(4) that restrict alien ownership and/or voting interests, our
action does not affect these restrictions, which we have previously
held to encompass partnership and other noncorporate interests. Wilner
and Scheiner, 103 FCC 2d at 516 para. 10. Thus, in calculating whether
aliens exceed the ownership and voting benchmarks set forth in these
statutory provisions, we will continue to follow the guidelines
specified in Wilner and Scheiner that relate to the computation of such
interests.
8. The rule changes that we adopt today simply conform our rules
and policies to section 403(k) of the Telecom Act. These changes thus
merely implement the new Congressional directive to remove the
restriction that no broadcast, common carrier, or aeronautical license
may be held by or granted to a corporation having alien officers or
directors. Accordingly, we find for good cause that compliance with the
general notice and comment provisions of the Administrative Procedure
Act is unnecessary. See 5 U.S.C. 553(b)(B). For similar reasons, and
because the changes ease restrictions on alien participation,
compliance with the effective date provision of the Administrative
Procedure Act also is unnecessary. 5 U.S.C. 553(d).
9. ACCORDINGLY, it is ordered, That, pursuant to Sections 154(i)
and 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.
154(i) and 303(r), Parts 20, 21, 22, 24, 26, 80, 87, 90, 100 and 101 of
the Commission's Rules, 47 CFR Parts 20, 21, 22, 24, 26, 80, 87, 90,
100, and 101 are amended as set forth below, effective October 28,
1996.
List of Subjects
47 CFR Parts 20, 21, 22, and 101
Communications common carriers, Radio.
47 CFR Parts 24, 26, 80, 87, 90 and 100
Radio.
Federal Communications Commission
William F. Caton,
Acting Secretary.
Rule Changes
Parts 20, 21, 22, 24, 26, 80, 87, 90, 100 and 101 of Title 47 of
the Code of Federal Regulations are amended as follows:
PART 20--COMMERCIAL MOBILE RADIO SERVICES
1. The authority citation for Part 20 continues to read as follows:
Authority: Secs. 4, 251-2, 303, and 332, 48 Stat. 1066, 1062, as
amended; 47 U.S.C. 154, 251-4, 303, and 332, unless otherwise noted.
2. Section 20.5 is amended by revising paragraphs (a)(4) and (a)(5)
to read as follows:
Sec. 20.5 Citizenship.
(a) * * *
(4) Any corporation of which more than one-fifth of the capital
stock is owned of record or voted by aliens or their representatives or
by a foreign government or representative thereof or by any corporation
organized under the laws of a foreign country; or
(5) 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.
* * * * *
PART 21--DOMESTIC PUBLIC FIXED RADIO SERVICES
3. The authority citation for Part 21 continues to read as follows:
Authority: Secs. 1, 2, 4, 201-205, 208, 215, 218, 303, 307, 313,
403, 404, 410, 602, 48 Stat. as amended, 1064, 1066, 1070-1073,
1076, 1077, 1080, 1082, 1083, 1087, 1094, 1098, 1102; 47 U.S.C. 151,
154, 201-205, 208, 215, 218, 303, 307, 313, 314, 403, 404, 602; 47
U.S.C. 552, 554.
Sec. 21.4 [Amended]
4. Section 21.4 is amended by removing paragraphs (d) and (f), and
redesignating paragraphs (e) and (g) as paragraphs (d) and (e),
respectively.
PART 22--PUBLIC MOBILE SERVICES
5. The authority citation for Part 22 continues to read as follows:
Authority: 47 U.S.C. 154, 303, and 332, unless otherwise noted.
6. Section 22.5 is amended by revising paragraphs (b)(3) and (b)(4)
to read as follows:
Sec. 22.5 Citizenship.
* * * * *
(b) * * *
(3) Any corporation of which more than one-fifth of the capital
stock is owned of record or voted by aliens or their representatives or
by a foreign government or representative thereof, or by any
corporation organized under the laws of a foreign country;
(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
[[Page 55581]]
laws of a foreign country, if the FCC finds that the public interest
will be served by the refusal or revocation of such license.
PART 24--PERSONAL COMMUNICATIONS SERVICES
7. The authority citation for Part 24 continues to read as follows:
Authority: 47 U.S.C. 154, 301, 302, 303, 309, and 332, unless
otherwise noted.
8. Section 24.404 is amended by revising paragraphs (b)(3) and
(b)(4) to read as follows:
Sec. 24.404 Eligibility.
* * * * *
(b) * * *
(3) Any corporation of which more than one-fifth of the capital
stock is owned of record or voted by aliens or their representatives or
by a foreign government or representative thereof or any corporation
organized under the laws of a foreign country.
(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. A Narrowband PCS authorization to provide Private Mobile Radio
Service may not be granted to or held by a foreign government or a
representative thereof.
9. Section 24.804 is amended by revising paragraphs (b)(3) and
(b)(4) to read as follows:
Sec. 24.804 Eligibility.
* * * * *
(b) * * *
(3) Any corporation of which more than one-fifth of the capital
stock is owned of record or voted by aliens or their representatives or
by a foreign government or representative thereof or any corporation
organized under the laws of a foreign country.
(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.
* * * * *
PART 26--GENERAL WIRELESS COMMUNICATIONS SERVICE
10. The authority citation for Part 26 continues to read as
follows:
Authority: 47 U.S.C. Sections 154, 301, 302, 303, 309 and 332,
unless otherwise noted.
11. Section 26.302 is amended by revising paragraphs (b)(3) and
(b)(4) to read as follows:
Sec. 26.302 Eligibility.
* * * * *
(b) * * *
(3) Any corporation of which more than one-fifth of the capital
stock is owned of record or voted by aliens or their representatives or
by a foreign government or representative thereof or any corporation
organized under the laws of a foreign country.
(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.
* * * * *
PART 80--STATIONS IN THE MARITIME SERVICES
12. The authority citation for Part 80 continues to read as
follows:
Authority: Secs. 4, 303, 48 Stat. 1066, 1082, as amended; 47
U.S.C. 154, 303, unless otherwise noted. Interpret or apply 48 Stat.
1064-1068, 1081-1105, as amended; 47 U.S.C. 151-155, 301-609; 3 UST
3450, 3 UST 4726, 12 UST 2377.
Sec. 80.15 [Amended]
13. Section 80.15 is amended by removing paragraphs (b)(4) and
(b)(6), and redesignating paragraphs (b)(5) and (b)(7) as paragraphs
(b)(4) and (b)(5), respectively, and adding the word ``or'' at the end
of newly designated paragraph (b)(4).
PART 87--AVIATION SERVICES
14. The authority citation for Part 87 continues to read as
follows:
Authority: 48 Stat. 1066, 1082, as amended; 47 U.S.C. 154, 303,
unless otherwise noted. Interpret or apply 48 Stat. 1064-1068, 1081-
1105, as amended; 47 U.S.C. 151-156, 301-609.
Sec. 87.19 [Amended]
15. Section 87.19 is amended by removing paragraph (b)(3) and by
redesignating paragraphs (b)(4) and (b)(5) as paragraphs (b)(3) and
(b)(4), respectively.
PART 90--PRIVATE LAND MOBILE RADIO SERVICES
16. The authority citation for Part 90 continues to read as
follows:
Authority: 47 U.S.C. 154, 303, 309, and 332.
17. Section 90.115 is amended by revising paragraphs (b)(3) and
(b)(4) to read as follows:
Sec. 90.115 Foreign government and alien eligibility.
* * * * *
(b) * * *
(3) A corporation of which more than one-fifth of the capital stock
is owned of record or voted by aliens or their representatives or by a
foreign government or representative thereof, or by any corporation
organized under the laws of a foreign country;
(4) A 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.
PART 100--DIRECT BROADCAST SATELLITE SERVICE
18. The authority citation for Part 100 continues to read as
follows:
Authority: 47 U.S.C. 154, 303, 309, and 554, unless otherwise
noted.
Sec. 100.11 [Amended]
19. Section 100.11 is amended by removing paragraphs (d) and (f),
and redesignating paragraphs (e) and (g) as paragraphs (d) and (e),
respectively, and adding the word ``or'' at the end of newly designated
paragraph (d).
PART 101--FIXED MICROWAVE SERVICES
20. The authority citation for Part 101 continues to read as
follows:
Authority: 47 U.S.C. 154, and 303.
Sec. 101.7 [Amended]
21. Section 101.7 is amended by removing paragraphs (b)(3) and
(b)(5), and redesignating paragraphs (b)(4) and (b)(6) as (b)(3) and
(b)(4), respectively,
[[Page 55582]]
and adding the word ``or'' at the end of newly designated paragraph
(b)(3).
[FR Doc. 96-27289 Filed 10-25-96; 8:45 am]
BILLING CODE 6712-01-P