WASHINGTON-The Federal Communications Commission has issued foreign ownership guidelines for international deals involving U.S. wireless and wireline carriers.
“A review of the applications involving foreign-ownership interests received by the commission suggests that the case law may not provide sufficiently clear guidance to applications,” the FCC stated.
FCC foreign ownership regulations and their interpretation are apt to take on greater weight as global telecom mergers are pursued in coming years.
In a controversial trans-Atlantic wireless merger several years ago, the FCC waived the foreign ownership rule in approving Deutsche Telekom AG’s $30 billion purchase of then-VoiceStream Wireless Corp. VoiceStream subsequently became T-Mobile USA Inc.
The foreign ownership rule prohibits the purchase of U.S. wireless firms by overseas firms that are more than 25-percent owned by foreign governments. However, the law does not prevent a company 25-percent owned by a foreign government from buying an American wireless carrier if federal regulators determine the transaction is in the public interest. The FCC made precisely that determination in allowing DT, 58-percent owned by the German government at the time, to acquire VoiceStream. The German government has decreased its stake in DT since 2001.
The FCC’s foreign ownership guidelines can be found at www.fcc.gov/ib.
