This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Deal: FCC Tries to Spark Foreign Capital Infusion Into Stations

Stocks in this article: NXST LIN GTN NWS SBGI CGI

NEW YORK ( The Deal) -- Tom Wheeler will kick off his tenure as Federal Communications Commission chairman by relaxing restrictions on foreign ownership of TV and radio stations when he presides over his first FCC meeting Nov. 14.

The move is intended to draw much-needed new capital to the broadcasting business.

Since passage of the Communications Act of 1934 the FCC has capped foreign investment in broadcast licensees at 25% and only once has the commission waived the rule, in 1994 when it retroactively approved Australia-based News Corp.'s (NWS) purchase of U.S. television stations 10 years earlier.

The rule has its roots in the Radio Act of 1912, which limited radio licenses to U.S. citizens or corporations amid the international tensions leading up to the First World War.

Today, no other telecom sector -- cable and satellite TV, wireless, telephone or Internet -- is so restricted. The change has broad support across a variety of interests. Broadcasters want the cap lifted to boost the value of their stations. Minority business owners in the U.S. like the idea because they expect it will increase their access to capital -- historically difficult for minorities seeking to get into the broadcasting industry. And activists opposed to media consolidation support the change as a way of bringing new buyers and more diversity to broadcast ownership.

The effort to make a change now was instigated by Democratic Commissioner Mignon Clyburn, who was the FCC's acting chairwoman until Wheeler was sworn in Nov. 4. On Oct. 24 Clyburn asked her FCC colleagues to support a declaratory ruling that would, on a case-by-case basis, permit investments from foreign individuals and companies to exceed the 25% stake. Her move was endorsed by Republican Commissioner Ajit Pai, who has been pressing for the change for a year.

"A foreign company can indirectly hold more than a one-quarter stake in our nation's largest wireless carriers, cable operators, cable programmers, and Internet backbone providers," Pai said in a statement praising Clyburn. "Yet that company cannot own a similar interest in a single radio station in rural Kansas. This disparity makes no sense, especially considering the difficult financial circumstances facing many broadcasters."

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,356.87 +288.00 1.69%
S&P 500 2,012.89 +40.15 2.04%
NASDAQ 4,644.3120 +96.4780 2.12%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs