Former FCC Chairman Ajit Pai previously alerted Commissioners to his and other investors’ concerns about the FCC’s proposal to reduce the ownership reporting threshold to 5% from 10% since it would significantly inhibit the ability of telecommunications investors to solicit capital from legitimate domestic and foreign sources. However, it appeared to have little impact on the FCC’s vote other than a tepid request for review by Commissioner Nathan Simington.
The FCC voted unanimously yesterday to move forward on a proposal requiring carriers operating in the U.S. to report their ownership information more regularly to combat national security threats and allow the agency to get a better picture of the ownership of authorized companies.
At the open meeting, FCC Chairwoman Jessica Rosenworcel capsuled the Commissioners’ concerns that the information is not updated regularly since a company is only required to update the Commission when there has been a modification, transfer of control, or discontinuance of service.
The Commission is also asking for comments on its proposal to require Section 214 applicants to identify the facilities they use in Canada and Mexico and to require them to commit to baseline security standards.
They will also be required to report foreign stakeholder ownership from 10 to 5 percent.
As reported Tuesday, former FCC Chairman Ajit Pai, now a partner at Searchlight Capital Partners, and former Commissioner Jonathan Adelstein, Head of Global Policy and Public Investment for DigitalBridge Group, Inc., informed the FCC in a letter that the proposed rules miss the mark by failing to consider the negative impact on the ability of investment management firms to attract foreign capital to invest in and improve U.S. telecommunications infrastructure.
According to an FCC filing, on April 14, Adelstein spoke with Marco Peraza, Wireline Advisor to Commissioner Nathan Simington, regarding the draft proposal and his concerns about the 5 percent reporting requirement.
5 percent barely discussed at the meeting
Commissioners Rosenworcel, Geoffrey Starks, and Brendan Carr discussed multiple benefits of the security proposal but did not register any concerns regarding the new reporting percentage.
Although Simington did vote for the measure, he said the 5% reporting requirement “could inhibit foreign investment without providing any meaningful gains in security.”