[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had adopted to implement the (now repealed) restrictions on foreign 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