Opinion ID: 477750
Heading Depth: 2
Heading Rank: 1

Heading: Alien Control

Text: 19 Title 47 U.S.C. Sec. 310(b) of the Communications Act establishes a general policy against alien control of broadcasting facilities in the United States. To this end, the statute establishes percentage limitations on alien ownership, voting rights, and directorships. Id. These are the usual indicia of control or influence over a corporation's affairs. As the Commission is well aware, however, they may not always reflect operational reality. Thus, even in instances in which the technical statutory requirements are met, the Commission may still find that aliens exercise an effective control over the operations of a station that is contrary to statutory policy. See, e.g., Channel 31, Debtor-in-Possession, 45 R.R.2d (P & F) 420 (1979) (broadcast license transfer set for hearing on whether Canadian investors would hold de facto control); Spanish International Communications Corp., 48 Fed.Reg. 28,549 (June 16, 1983) (statutory prohibition extends to de facto as well as de jure control). 20 Telemundo concedes that the alien ownership of TBC now falls within statutory limits. It contends, however, that the record will not support the FCC's finding that aliens will no longer exercise effective control over the television stations' operations. It is its position, in effect, that the rescission of the two consulting contracts represents a change of form rather than of substance. Video Tape Systems continues to own 24.04% of TBC's stock, its three Venezuelan nominees will continue to serve on its board, and TBC remains burdened by its original assertions that only the Spanish language broadcasting expertise represented by the Venezuelan owners could assure the future success of WKBM-TV and WSUR-TV. Therefore, in the absence of adequate safeguards or of specific evidence in the record to the contrary, the FCC must conclude (in Telemundo's view) that with or without contracts, the Venezuelan owners and their associates will play the dominant role in managing the two stations and in shaping their programs. 21 We see no reason to conclude that the Commission acted improperly or otherwise abused its broad discretion in finding that the problem of alien control had been satisfactorily resolved. The adjustments in stock ownership speak for themselves. As for the problem of de facto control, TBC stated in the amendment to its application that it had cancelled the contracts for management and programming services that had been the focus of the Bureau's concern. We have no basis for concluding that the Commission erred in accepting the implications of the wording of the contracts at face value, especially in light of the information that TBC had retained as consultants experienced Puerto Rican broadcasters who are American citizens to implement its plans. March 20 Letter, J.A. at 191. 5 22 Finally, as the Commission notes, [i]f at any time after TBC begins operations, facts can be shown to raise a substantial question whether it is operating in a manner inconsistent with the statutory policy, that could be the subject of future Commission action. Brief for Appellee at 18 n. 22. See 47 U.S.C. Sec. 312(a)(2). As the five-year license term for all television stations in Puerto Rico will expire on February 1, 1987, 47 C.F.R. Sec. 73.1020(a)(3) (1985), applications for renewal of all Puerto Rico television licenses are due at the FCC no later than October 1, 1986. Thus, the FCC will have an early opportunity to reassess the matter of alien control on the basis of actual experience under the new management. Id. at Sec. 73.3539(a) (1985).