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FCC relaxes rule limiting foreign ownership of media stations

(The Associated Press)

The Federal Communications Commission has voted unanimously to relax a decades-old rule that kept foreigners from owning more than a 25 percent stake in a U.S. radio or television station.

In a 5-0 vote, the FCC said it was open to considering investment proposals from international companies or individuals on a case-by-case basis. Tom Wheeler, the body’s new chairman, said the change would grant U.S. broadcasters access to new funding from foreigners and diversify programming on the air. The idea was floated last month by then-acting Chairwoman Mignon Clyburn.

“It will encourage ownership diversity,” said Wheeler.

The loosened restriction could also benefit large foreign companies. Grupo Televisa, a Mexican company with a minority stake in the Spanish-language station Univision, might now be able to increase its ownership. Under the terms of a $1.2 billion deal struck in 2010, Univision, which is based in New York, acquired the rights to broadcast Televisa’s soap operas in exchange for a 5 percent stake.

Televisa last quarter made over $71 million off of royalties from Univision. The 2010 deal included other provisions that sought to grant Televisa as much as a 40 percent stake in Univision. But the FCC’s foreign ownership rule prevented that from happening.

The FCC’s decision also paves the way for companies such as Qatar-based Al Jazeera to consider expanding its American presence. Currently, its Al Jazeera America service operates on cable and satellite channels only. Adding over-the-air television to the mix would allow for greater reach.

FCC officials said the agency would still examine foreign ownership deals, and would heed to concerns raised by administration officials over national security, trade policy and law enforcement.

The original 25-percent rule was never intended to be a hard cap, said Matt Wood, policy director at the interest group Free Press. Instead, companies have rarely asked the government for permission to exceed 25 percent — which ended up creating a norm against doing so.

“There’s always been room for waiving that rule or granting an application that might exceed that,” he said. “This does nothing more than clarify what the law has always been.”

Unlike before, however, the FCC now faces an important auction in the coming year, during which television broadcasters will be encouraged to give up valuable airwaves and auction them off to wireless companies eager to upgrade mobile broadband. Wheeler indicated the FCC would be more likely to approve of foreign broadcast investment proposals if they included channel-sharing or other attempts to clear up this spectrum.

“Efficient use of spectrum is key to considering applications for what will result from this decision,” Wheeler said.