Client Alert: “The Federal Communications Commission opens radio and television broadcasting to foreign entities”

For more than 80 years, Section 310(b) of the Communications Act 1934 has been interpreted as prohibiting direct foreign ownership of more than 20% and indirect ownership of 25% or more of US radio and television broadcast stations. Effective January 31 2017, this will change as the Federal Communications Commission (FCC) has removed longstanding prohibitions against these limitations on foreign ownership ‒ although it has preserved the right, on a case-by-case basis, to block a foreign acquisition of a broadcast licence in excess of 25% (eg, for reasons of national security).

For quite some time, foreign entities have already been permitted to acquire control over non-broadcast licences (eg, nationwide cell carrier T-Mobile is majority owned by Deutsche Telekom). However, the FCC has steadfastly enforced its longstanding foreign ownership control policies over broadcast station licences. Most famously, Rupert Murdoch had to become a US citizen before being able to acquire control over what today is known as Fox Broadcasting.

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