Ed, the answer to your question is that a Form 175 filer is required to attach to its applications a "petition for declaratory ruling," in which it: (1) notifies the FCC that it has or plans to have greater than 25 percent foreign ownership; and (2) asks the FCC to find its foreign ownership structure to be in the public interest. Remember, an entity does not violate Section 310(b) until it actually has been granted a license and these bidders won't be granted a license for a few months yet. By notifying the FCC prior to the auction, the bidder complies with bidder eligibility requirements and preserves its ability to take advantage of the WTO Agreement when it goes into effect on February 9, 1998. Hope this helps! See below:
II. Foreign Ownership Issues.
Q: How much foreign ownership of a licensee is permissible? Can LMDS applicants seek more than 25 percent indirect foreign ownership?
A: Section 310(a) of the Communications Act of 1934, as amended ("Communications Act"), prohibits granting any wireless license to a foreign government or a representative thereof. Section 310(b) of the Communications Act imposes restrictions on the foreign ownership of common carrier, broadcast, and aeronautical licensees. Under this section, the Commission may not grant a common carrier wireless license to an alien, the representative of an alien, any corporation organized under the laws of any foreign government, or any corporation of which more than 20 percent is owned by foreign entities. Section 310(b)(4) imposes additional restrictions on the foreign ownership of the parent corporation of a common carrier licensee, specifically that no common carrier license shall be granted to or held by "any corporation directly or indirectly controlled by any other corporation of which more than one-fourth of the capital stock is owned of record or voted by aliens . . . or by any corporation organized under the laws of a foreign country . . . if the Commission finds that the public interest will be served by the refusal or revocation of such license."
Under the Foreign Participation Order, the Commission recently liberalized its rules for determining when refusal or revocation would serve the public interest. The final rules set forth in the Foreign Participation Order will not become effective before February 9,1998. Any applicant that is controlled by a corporation with more than 25 percent foreign ownership, or which seeks to exceed that limit, must inform the Commission in a separate petition for declaratory ruling. The Commission will accept petitions for declaratory ruling immediately, but will not necessarily rule on them prior to the auction start date. Because applicants must certify on their short form applications that they are in compliance with the foreign ownership provisions of Section 310 of the Communications Act, applicants filing petitions for declaratory rulings must reference their pending petitions in their short form applications. Applicants seeking foreign investment should familiarize themselves with the Foreign Participation Order, particularly Section III.D. That order is available from the Commission's web site at <http://www.fcc.gov/ib/wto.html>. |
