[Federal Register Volume 77, Number 79 (Tuesday, April 24, 2012)]
[Proposed Rules]
[Pages 24452-24454]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-9623]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1 and 25

[IB Docket No. 11-133; DA 12-573]


Foreign Ownership Policies

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In this document, the International Bureau, on behalf of the 
Commission, seeks further comment on an approach to policies and 
procedures that apply to foreign ownership of common carrier radio 
station licensees pursuant to the Communications Act of 1934, as 
amended (``the Act''). It seeks comment because this approach was not 
discussed in the Notice of Proposed Rulemaking initiating this docket 
or in the comments filed to date in response to the Notice of Proposed 
Rulemaking.

DATES: Comments shall be filed May 15, 2012. Reply comments shall be 
filed May 25, 2012.

ADDRESSES: All pleadings are to reference IB Docket No. 11-133. 
Comments may be filed using the Commission's Electronic Comment Filing 
System (ECFS) or by filing paper copies.
    [ssquf] Electronic Filers: Comments may be filed electronically 
using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/.
    [ssquf] Paper Filers: Parties who choose to file by paper must file 
an original and one copy 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 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.
    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. All hand deliveries 
must be held together with rubber bands or fasteners. Any envelopes 
must be disposed of before entering the building. The filing hours are 
8 a.m. to 7 p.m. 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. U.S. Postal Service first-
class, Express, and Priority mail must be addressed to 445 12th Street 
SW., Washington, DC 20554.
    People with Disabilities: To request materials in accessible 
formats for people with disabilities (Braille, large print, electronic 
files, audio format), send an email to [email protected] or call the 
Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 
418-0432 (tty).
    In addition, one copy of each pleading must be sent to each of the 
following:
    (1) The Commission's duplicating contractor, Best Copy and 
Printing, Inc., Portals II, 445 12th Street SW., Room CY-B402, 
Washington, DC 20554, www.bcpiweb.com; telephone: (800) 378-3160, fax: 
(202) 488-5563;
    (2) James Ball, Chief, Policy Division, International Bureau, 445 
12th Street SW., Room 7-A760, Washington, DC 20554; email: 
[email protected];
    (3) Howard Griboff, Deputy Chief, Policy Division, International 
Bureau, 445 12th Street SW., Room 7-A662, Washington, DC 20554; email: 
[email protected];
    (4) Kathleen Collins, Attorney-Advisor, Policy Division, 
International Bureau, 445 12th Street SW., Room 7-A515, Washington, DC 
20554; email: [email protected].
    Filings and comments are also available for public inspection and 
copying during regular business hours at the FCC Reference Information 
Center, Portals II, 445 12th Street SW., Room CY-A257, Washington, DC 
20554. They may also be purchased from the Commission's duplicating 
contractor, Best Copy and Printing, Inc., Portals II, 445 12th Street 
SW., Room CY-B402, Washington, DC 20554, telephone: (800) 378-3160, 
fax: (202) 488-5563, or via its Web site, http://www.bcpiweb.com.
    This matter shall be treated as a ``permit-but-disclose'' 
proceeding in accordance with the Commission's ex parte rules, 47 CFR 
1.1200 et seq. 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 Sec.  1.1206(b). In proceedings governed 
by rule Sec.  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

[[Page 24453]]

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.

FOR FURTHER INFORMATION CONTACT: Kathleen Collins, Attorney-Advisor, 
Policy Division, International Bureau at (202) 418-1474 or 
[email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Public 
Notice, DA 12-573, released on April 11, 2012. The full text of this 
document is available for inspection and copying during normal business 
hours in the FCC Reference Information Center, Portals II, 445 12th 
Street SW., Room CY-A257, Washington, DC 20554. The complete text may 
also be purchased from the Commission's duplicating contractor, Best 
Copy and Printing, Inc., Portals II, 445 12th Street SW., Room CY-B402, 
Washington, DC 20554, telephone: (800) 378-3160, fax: (202) 488-5563, 
or via its Web site, http://www.bcpiweb.com. The complete text is also 
available on the Commission's Web site at http://transition.fcc.gov/Daily_Releases/Daily_Business/2012/db0411/DA-12-573A1.pdf. To request 
the document in accessible formats for people with disabilities 
(Braille, large print, electronic files, audio format), send an email 
to [email protected] or call the Consumer & Governmental Affairs Bureau at 
202-418-0530 (voice), 202-418-0432 (tty).
    In 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, IB Docket No. 11-133, Notice of 
Proposed Rulemaking, FCC 11-121, 26 FCC Rcd 11703 (2011) (Section 
310(b)(4) NPRM), the Commission sought comment on proposals to revise 
and simplify the policies and procedures that apply to foreign 
ownership of common carrier and aeronautical radio station licensees 
pursuant to section 310(b)(4) of the Act. Although the Commission did 
not specifically seek comment on its policies and procedures relating 
to section 310(b)(3), several commenters asked the Commission to find 
that all ``indirect'' foreign interests in a common carrier licensee 
should be governed under section 310(b)(4), rather than section 
310(b)(3). They are concerned that applying section 310(b)(3) to 
``indirect'' foreign interests in common carrier licensees may limit 
the flexibility of foreign investors in structuring their investments. 
Commenters also state that applying section 310(b)(3) to foreign 
interests in a licensee held through an intervening U.S.-organized 
entity that does not control the licensee (which commenters term 
``indirect non-controlling'' foreign interests) is inconsistent with 
the U.S. commitments made in the World Trade Organization (WTO) Basic 
Telecom Agreement. Commenters state that a determination that section 
310(b)(3) does not apply in this situation would be one of the ``most 
helpful actions'' the Commission could take to further this 
proceeding's goals of reducing unnecessary regulatory barriers to 
foreign investment that can benefit innovation, economic growth, and 
employment in the United States.
    By this Public Notice, the International Bureau seeks public 
comment on an approach not specifically raised by the comments to date. 
In particular, we invite comment on the legal and policy implications 
of forbearing under section 10 of the Act, 47 U.S.C. 160, from applying 
section 310(b)(3) to certain foreign interests in common carrier 
licensees if--contrary to the comments discussed above--section 
310(b)(3) is interpreted as applying to foreign interests in a 
broadcast, common carrier or aeronautical licensee held through an 
intervening U.S.-organized entity that itself holds non-controlling 
equity and voting interests in the licensee.\1\ Section 10 provides 
that the Commission shall forbear from applying any regulation or any 
provision of the Act to a telecommunications carrier if the Commission 
determines that: (1) Enforcement of such regulation or provision is not 
necessary to ensure that the charges, practices, classifications, or 
regulations by, for, or in connection with that telecommunications 
carrier or telecommunications service are just and reasonable and are 
not unjustly or unreasonably discriminatory; (2) enforcement of such 
regulation or provision is not necessary for the protection of 
consumers; and (3) forbearance from applying such provision or 
regulation is consistent with the public interest. 47 U.S.C. 160.
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    \1\ There is Commission precedent that has applied section 
310(b)(4) where a foreign government, entity or individual holds 
interests in a U.S.-organized entity that itself controls a 
broadcast, common carrier, or aeronautical radio station licensee, 
and section 310(b)(3) where a foreign government, entity or 
individual holds interests in a licensee through a U.S.-organized 
entity that has non-controlling interests in the licensee. See, 
e.g., Wilner & Scheiner I, 103 F.C.C. 2d 511, 521-24, paragraphs 17-
22 & nn. 44-56 (1985), recon., Wilner & Scheiner II, 1 FCC Rcd 12 
(1986); Applications of Cellco Partnership d/b/a Verizon Wireless 
and Atlantis Holdings LLC, WT Docket No. 08-95, Memorandum Opinion 
and Order and Declaratory Ruling, 23 FCC Rcd 17444, 17545-46, 
paragraph 231 & nn. 799-803, 17547, paragraph 237 (2008). Commenters 
assert there is contrary precedent.
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    Under a forbearance approach, the Commission might forbear from 
applying section 310(b)(3) to foreign interests held in a common 
carrier licensee, through a U.S.-organized entity that does not control 
the licensee, that would exceed 20 percent of the licensee's equity 
interests and/or 20 percent of its voting interests, where the 
Commission finds the particular foreign interests to be consistent with 
the foreign ownership policies the Commission applies under section 
310(b)(4) of the Act. The Commission would not grant forbearance when 
applying section 310(b)(3) to broadcast, aeronautical fixed, and 
aeronautical en route licenses, as these services are not 
telecommunications services to which section 10 forbearance applies. 
Foreign ownership of broadcasting licenses, moreover, raises distinct 
policy issues, see Section 310(b)(4) NPRM, 26 FCC Rcd at 11704, n.3, 
and is not subject to the WTO Basic Telecom Agreement.
    We seek comment on this general approach. We specifically seek 
comment on whether a forbearance approach would satisfy the three 
requirements of section 10 of the Act. We further request comment on 
whether this forbearance approach would permit the Commission to 
authorize greater than 20 percent foreign interests held in a common 
carrier licensee, through a U.S.-organized entity that does not control 
the licensee, when those interests would be consistent with the public 
interest under the policy framework established by section 310(b)(4) 
and the Foreign Participation Order, 12 FCC Rcd 23891 (1997).\2\ We ask 
whether such a forbearance approach would treat all ``indirect'' 
foreign interests similarly (whether through a controlling or non-
controlling

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U.S. organized entity), as requested by commenters.
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    \2\ The section 310(b)(4) policy framework employs an open entry 
standard for foreign investment from WTO Member countries in U.S. 
basic telecommunications markets. In the Foreign Participation 
Order, which adopted this standard, the Commission concluded, 
pursuant to the discretionary authority granted to the Commission in 
section 310(b)(4), that the public interest would be served by 
permitting greater investment by foreign individuals and entities 
from WTO Member countries in the U.S.-organized entities that 
control common carrier and aeronautical radio licensees. See Foreign 
Participation Order, 12 FCC Rcd at 23891-97, paragraphs 1-12, 23935-
42, paragraphs 97-118. The Commission adopted a rebuttable 
presumption by which it presumes that foreign investment from WTO 
Member countries does not pose competitive concerns in the U.S. 
market See also Section 310(b)(4) NPRM, 26 FCC Rcd at 11705, 
paragraph 2, nn.4-5. The language of section 310(b)(3) does not 
include the public interest test set forth in section 310(b)(4). 47 
U.S.C. 310(b)(3).
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    We further seek public comment on whether forbearance from 
application of section 310(b)(3) in this context, if adopted by the 
Commission, should apply procedures like those used when licensees seek 
Commission approval to exceed the 25 percent foreign ownership 
benchmark in section 310(b)(4). If that approach were applied, it would 
require licensees to file a petition for declaratory ruling when 
seeking Commission approval of foreign interests held in a common 
carrier licensee, through an intervening U.S. entity that does not 
control the licensee, that would exceed 20 percent of the equity 
interests and/or 20 percent of the voting interests in the licensee. 
The Commission would place the petition on notice for public comment 
and forward the petition to the Executive Branch for review.\3\ 
Following conclusion of the public notice and comment process, the 
Commission would issue a declaratory ruling, consistent with its 
section 310(b)(4) policy framework, as to whether the foreign 
investment would be consistent with the public interest.\4\ If the 
ruling is affirmative (i.e., the Commission determines that such 
investment comports with the public interest), the Commission would 
forbear from applying the section 310(b)(3) restrictions that would 
otherwise prohibit the foreign investment.
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    \3\ In assessing the public interest, the Commission takes into 
account the record developed in each particular case and accords 
deference to the expertise of Executive Branch agencies in 
identifying and interpreting issues of concern related to national 
security, law enforcement, foreign policy and trade policy. Foreign 
Participation Order, 12 FCC Rcd at 23919-21, paragraphs 61-66.
    \4\ The Commission, or the International Bureau on delegated 
authority, in granting a section 310(b)(4) declaratory ruling: (1) 
Authorizes the named foreign investors from WTO Member countries to 
hold specified equity and voting interests in the U.S. parent that 
controls the licensee; (2) includes provisions and limitations to 
accommodate future changes in foreign ownership of the U.S. parent 
and to prohibit non-WTO investment from exceeding 25 percent of the 
U.S. parent's equity and/or voting interests; and (3), on a case-by-
case basis, imposes specific conditions that respond to concerns 
raised by the Executive Branch in particular proceedings with 
respect to potential effects of the proposed foreign investment on 
U.S. national security, law enforcement, and public safety. Section 
310(b)(4) NPRM, 26 FCC Rcd at 11712, paragraph 15.
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    We ask in particular that interested parties who contend that the 
forbearance proposals discussed above would or would not adequately 
address national security, law enforcement, or public safety concerns, 
or that they would advance or conflict with U.S. trade policy, explain 
their positions in detail and provide support for their conclusions. In 
addition, if the Commission alters in this docket the policies and 
procedures that apply to section 310(b)(4), should it apply those same 
revisions to its public interest review under any section 310(b)(3) 
forbearance approach that also is adopted?
    We further seek comment on modifications to these proposals, or 
alternative forbearance approaches, that parties may want the 
Commission to consider.

Federal Communications Commission.
Mindel De La Torre,
Chief, International Bureau.
[FR Doc. 2012-9623 Filed 4-23-12; 8:45 am]
BILLING CODE 6712-01-P