On April 29, 2025, the Federal Communications Commission (FCC or Commission) released a Notice of Proposed Rulemaking (NPRM) that proposes to formalize the Commission’s practices and review processes for reviewing foreign ownership under Section 310(b) of the Communications Act of 1934, as amended. The FCC acknowledged that investment from certain foreign sources (particularly foreign adversary countries) may raise national security concerns. It noted, however, that it supports foreign investment and seeks to clarify and streamline foreign ownership rules and review processes that have not been codified, in an effort to eliminate unnecessary regulatory burdens.
The NPRM seeks comment on rule changes that would, among other things:
The NPRM also solicits comments from stakeholders on other proposals to reduce regulatory burdens or to clarify the FCC’s processes relating to foreign ownership approvals. Interested parties will have an opportunity to weigh in on the proposals in the NPRM, and the Commission will consider such stakeholders’ comments while deliberating over the implementation of the rules proposed in the NPRM.
The FCC reviews foreign investments in broadcast, common carrier, and aeronautical radio stations licensees to ensure compliance with Section 310(b) of the Communications Act. Section 310(b)(4) prohibits foreign entities from holding more than 25% of the equity or voting interests in a US-organized entity that controls a US radio station licensee. The FCC can approve higher levels of foreign ownership if it finds that doing so would serve the public interest. A licensee must request FCC approval of such foreign ownership in the licensee or its controlling US parent through a petition for declaratory ruling (PDR).
The FCC considers national security, law enforcement, foreign policy, and trade policy issues in its public interest analysis of foreign ownership petitions, and coordinates as needed with relevant executive branch agencies.
The NPRM seeks comment on proposals that would apply broadly to FCC foreign ownership reviews under Section 310(b) and that are intended to conform with existing Commission practices and preferences. These proposals aim to reduce processing delays resulting from requests for PDR amendments and supplements.
Current FCC rules allow licensees that are US public companies (or controlled by US public companies) to calculate their foreign ownership based on reasonable diligence and information that is known, or reasonably known, about the citizenship of their direct or indirect interest holders. In general, it is often not possible for US public companies to determine the citizenship of direct and indirect holders of interests below a 5% threshold. Noting that ownership structures for privately held companies have become increasingly complicated, the FCC proposes to extend the same flexibility afforded to US public companies in the current rules governing ownership calculation methods and providing a safe harbor for remediating inadvertent non-compliance with the foreign ownership limits. (¶¶ 30-31). While the FCC notes that it currently takes a case-by-case approach for allowing private companies to use calculation methods of public companies, the NPRM seeks comment on whether those procedures should apply routinely to private companies. (¶ 32).
The NPRM also seeks comment on whether the remedial safe harbor, currently available only to public companies, should also apply to private companies. (¶ 33). If public companies inadvertently exceed the foreign ownership limits, they can avoid enforcement action by notifying the FCC within 10 days after learning of the non-compliance of the licensee’s intent to file a PDR or to take remedial action to eliminate the excess foreign ownership. (¶ 33).
The NPRM proposes to codify the FCC’s approach to deemed voting interests when considering requests for approval for future increases of an investor’s interest (referred to as “advance approval”). Currently, the Commission’s rules require petitioners to obtain specific approval for individuals and entities that hold or would hold more than 5% (or 10% in the case of passive or insulated interests) equity or voting interest in the controlling US parent. (¶ 19). The NPRM notes, however, that the Commission assesses deemed voting interests (which may not reflect actual decision-making power) when analyzing the role of limited partners and LLC members. This is because such individuals and entities can still be involved in management even without meeting the threshold percentages for equity or voting interest. (¶ 19). Noting that influence and control are not the same (¶ 23), the NPRM seeks comment on amending the FCC’s rules to state that a finding of deemed voting interest of 50% or more is not a finding of control in and of itself. (¶ 18).
Additionally, the FCC proposes to amend its rules regarding requests for advance approval to clarify that “a foreign individual or entity that has a deemed voting interest of 50 percent or greater voting interest in the controlling US parent, but that does not have de jure or de facto control of the controlling US parent, may request advance approval for the foreign individual or entity to increase its interests, at some future time, up to any non-controlling amount not to exceed 49.99 percent equity and/or voting interest.” (¶ 18).
The NPRM also seeks comment on certain proposals regarding Section 310(b) review procedures that apply specifically to broadcast licensees.
The FCC also seeks comment on other ways to reduce regulatory burdens and streamline Section 310(b) rules and processes, consistent with its Delete, Delete, Delete Proceeding.In Re: Delete, Delete, Delete, Public Notice, GN Docket No. 25-133, DA 25-219 (Mar. 12, 2025). (¶ 56).
Once the NPRM has been published in the Federal Register, comments on the proposals in the NPRM will be due 30 days after the date of its publication in the Federal Register. Reply comments will be due 60 days after its publication date.