U.S. Federal Communications Commission on Thursday voted to relax decades-old rules that effectively prohibited foreign owners from having more than a 25 percent stake in American TV and radio stations.
The unanimous vote by the five commissioners clarified the existing rules, making clear that the FCC is open to allowing bigger foreign stakes and would review each instance on a case-by-case basis to ensure it is in the public interest.
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"It will encourage ownership diversity, it will expand localism and it will be done in an environment recognizing that we're in the midst of a major effort to improve spectrum efficiency," said FCC Chairman Tom Wheeler.
The item was the first on the agenda of the first open FCC meeting presided over by Wheeler, a Democrat who was sworn in as the top communications regulator on November 4.
A 1934 law limits foreign ownership and relaxing the cap was long sought by a number of broadcasting groups.
The industry hopes the change will prompt an infusion of capital and it is also expected to benefit stations catering to minorities.
The FCC has allowed greater foreign investment stakes in wireless providers.
"Unlike other segments of the communications industry, broadcasters have faced unique funding constraints with respect to investment from foreign shores. Today, the commission remedies this anomaly," Democratic Commissioner Jessica Rosenworcel said in voting to approve the new rule.
The new limitations would still prohibit foreigners from wholly or directly owning broadcast licensees, allowing only indirect ownership through a stake in a controlling parent of a broadcast licensee.
"It will be far from a rubber stamp," Wheeler said.
Although the item was approved unanimously, the commission's new Republican member, Michael O'Rielly, said he wished the FCC had gone further to ease the burdens on market forces, for instance adding a requirement that the FCC explain and defend any decision to block a deal.
Indicating a strong conservative tack for his FCC tenure, O'Rielly closed his first address as a commissioner with the same line that ended his remarks at the nomination hearing in the Senate: "Stay strong for freedom."
(Reporting by Alina Selyukh; Editing by Eric Beech)