Revised Section 310 Licensing Rules Would Boost Foreign Investment, Say Satellite Interests

The FCC has a chance to clear the way for foreign investment in U.S. satellite and other communications companies by eliminating unnecessary licensing barriers, said satellite interests in filings at the FCC in docket 11-133. The FCC issued a proposed rulemaking in August on potential changes to foreign ownership rules and the licensing requirements of section 310(b)(4) of the Communications Act (CD Aug 10 p11).

The agency should get rid of the distinction of investment from World Trade Organization and not-WTO members, said the Satellite Industry Association (http://xrl.us/bmkcic). The competitive risk associated with encouraging non-WTO investment is much smaller today than when the policy was adopted in 1998 and the revision would “significantly reduce the burden of” 310(b)(4) filings because of the difficulty of identifying even tiny non-WTO investments, said the SIA. Security concerns also wouldn’t be an issue because the executive branch would continue to review foreign investment, it said. The agency should also revise policies for “non-material changes in foreign ownership” where U.S. parent companies already received 310 (b)(4) approval, said the association.

FCC rules of section 310(b)(4) require several agency approvals even when there’s no change in the foreign ownership of a licensee, complained the SIA. Internal reorganization of companies where there’s no change to the “the previously-approved ultimate control of the licensee, or change in foreign ownership outside of pre-approved levels,” shouldn’t require further FCC approval, said SIA.

Intelsat pushed the FCC to stop requiring non-common carrier satellite license applicants from having to answer detailed questions on foreign ownership (http://xrl.us/bmkcki). Those questions, 30-34 on FCC Form 312, aren’t required by statute or regulation and elimination would be consistent with the agency’s non-common carrier earth station requirements, said Intelsat. Satellite applicants answer foreign investment questions elsewhere in the applications, the company said.

The Justice Department and Department of Homeland Security have a problem with the proposals, which they said “could impair their ability to address potential public interest concerns by limiting their opportunity to review and comment upon changes in foreign ownership and service types, and recommend against an immediate application of any adopted rules to existing license holders without a prior opportunity for the Departments to review the potential effects of such changes” (http://xrl.us/bmkckz).

Specifically, the elimination of specific approval requirements of individual, named, foreign investors and permitting owners to receive pre-approval of up to 100 percent ownership is a problem, said the filing. The government agencies also said they were worried about proposals that allow authorization of a U.S. parent to have 100 percent aggregate foreign ownership, including by foreign investors for which the parent did not request specific approval and the automatic extension of a U.S. parent company’s ruling to cover any subsidiary, the filing said.