OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
January 4,2010
The Honorable Edolphus Towns
Chairman
Committee on Oversight and Government Reform
U.S. House ofRepresentatives
2157 Rayburn House Office Building
Washington, D.C. 20515
Dear Chairman Towns:
This letter supplements the Federal Communications Commission's (FCC) July 20,2009
response to the Government Accountability Office's (GAO) report entitled, Sovereign Wealth
Funds: Laws Limiting Foreign Investment Affect Certain Us. Assets and Agencies Have
Various Enforcement Processes (GAO 09-608) (Report). In its Report, GAO recommends that
the FCC and other agencies review the sources ofinformation that these agencies currently
monitor to detect changes in ownership ofU.S. assets subject to restriction or disclosure
requirements applicable to foreign investors, and assess the value ofsupplementing these sources
with information from other government and private data sources on investment transactions.
As discussed in more detail below, we have concluded that routinely monitoring
government and private data sources to ascertain changes in ownership ofU.S. communications
assets prior to a change triggering licensee obligations would be oflimited value to the FCC.
This is due both to FCC licensees'lapplicants' high level ofcompliance in filing the required
applications, notifications, and periodic reports that identify changes in ownership, and the fact
that private and government data sources may not contain timely or sufficiently detailed
information. We believe that the Commission's current system ofself-reporting by regulated
entities, with targeted, case-specific inquiries and use of government and private data sources as
warranted to conduct these inquiries, will continue to ensure that Commission staffhas the
information necessary to carry out its statutory functions with regard to foreign investment.
In the Commission's July 20, 2009 response, I noted that the GAO accurately describes
the FCC's approach to oversight of foreign investment in the communications sector in that the
FCC relies on self-reporting by regulated entities to assure that changes of ownership do not
exceed legal limits or otherwise contravene the FCC's foreign ownership rules and policies. The
response also stated that the Commission would review the sources ofinformation the FCC
monitors to detect changes in ownership ofU.S . communications assets that are subject to
restriction or disclosure under the Communications Act of 1934, as amended (Communications
Act) and the Cable Landing License Act of 1921 (Cable Landing Act), and assess the usefulness
ofsupplementing the existing system ofself-reporting by regulated entities with routine
Page 2-The Honorable Edolphus Towns
monitoring ofinvestment information from other government and private data sources. I
anticipated that the Commission would complete its assessment of GAO's recommendations
within 120 days.
This assessment now is completed. The data and information contained in government
and private data sources is useful to FCC staffprimarily in cases where there is a question as to
the accuracy or the completeness ofownership and other information filed by FCC regulated
entities. Based on our review of, and Commission experience with, relevant data sources - in
particular, the Securities and Exchange Commission's (SEC) data base ofpublic filings as well
as the Nexis and SNL Kagan information services to which the FCC subscribes, - it is our view
that routinely monitoring these sources on a daily basis to ascertain changes in the ownership of
U.S. communications assets prior to a change triggering licensee obligations to seek prior
Commission approval would be oflimited value to the FCC as it calTies out its statutory
responsibilities.
As noted in the July 20, 2009 response, FCC applicants and licensees demonstrate a high
level ofcompliance in filing the required applications, notifications, and periodic reports that
identify changes in ownership since initial licensing or authorization. The FCC's filing and
reporting requirements are well-established, and the consequences ofnon-compliance can be
severe, especially where aggravating factors are found to exist. In addition, FCC staffroutinely
reviews daily trade press publications, including Communications Daily and
Telecommunications Reports. Staffalso has access to Nexis and SNL Kagan to supplement,
when necessary, information obtained from licensees and applicants, their competitors, and the
trade press. A private data source that relies on SEC filings as well as independent company
research, may not, however, have timely or sufficiently detailed information as to planned
investments in U.S. communications assets, particularly when those investments fall below
thresholds that trigger reporting under other government agency regulations. As a result, routine
monitoring ofthese sources on a daily basis would be ofmarginal benefit to the Commission in
calTying out its statutory responsibilities under the Communications Act or the Cable Landing
Act.
FCC staffmet with relevant staffofthe SEC on September 3, 2009, to discuss ownership
disclosures filed with the SEC by beneficial owners ofU.S.-registered equity securities.
Disclosure statements filed pursuant to the SEC's Rule l3d-l do not necessarily permit ready
identification ofpersons who hold the economic interest in, or who ultimately may direct the
voting of, a company's registered securities due to the widespread use ofnominees, such as
banks and brokers, who hold large blocks ofshares in "street name" on behalfoftheir customers.
These nominees are subject to privacy regulations and contractual agreements that limit
disclosure ofcustomer information, including disclosure to the SEC. As a result, FCC staffhas
concluded that routinely monitoring disclosure statements filed with the SEC with respect to
purchases ofsecurities issued by U.S.-registered communications companies would be oflimited
value to the FCC. To the extent a particular person or entity acquires, directly or indirectly, more
than five percent ofa company's registered class ofequity securities, the FCC expects that the
Page 3-The Honorable Edolphus Towns
trade press and other private data sources that do routinely monitor SEC filings, such as Nexis
and SNL Kagan, will report the purchase and that we will become aware ofthe purchase in the
normal course, whether from staffreview ofthese data sources, from other applicants or
licensees, or from other government agencies that review foreign investment in U.S.
communications companies.
In summary, in accordance with the recommendation ofthe GAO, the FCC has assessed
the value ofroutinely monitoring other government and private data sources to detect changes in
ownership ofU.S. communications assets. We have concluded that self-reporting by regulated
entities, with targeted, case-specific inquiries and use of government and private data sources as
warranted to conduct these inquiries, will continue to ensure that Commission staffhas the
information necessary to carry out its functions with regard to foreign investment pursuant to the
requirements ofthe Communications Act of 1934 and the Cable Landing Act.
Please do not hesitate to contact me ifyou have any questions regarding this matter.
cc: The Honorable Christopher J. Dodd
The Honorable Richard C. Shelby
Director, Physical Infrastructure, Government Accountability Office
Office ofManagement and Budget
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
January 4,2010
The Honorable Joseph 1. Lieberman
Chairman
Committee on Homeland Security and Governmental Affairs
United States Senate
340 Dirksen Senate Office Building
Washington, D.C. 20510
Dear Chairman Lieberman:
This letter supplements the Federal Communications Commission's (FCC) July 20,2009
response to the Government Accountability Office's (GAO) report entitled, Sovereign Wealth
Funds: Laws Limiting Foreign Investment Affect Certain Us. Assets and Agencies Have
Various Enforcement Processes (GAO 09-608) (Report). In its Report, GAO recommends that
the FCC and other agencies review the sources ofinformation that these agencies currently
monitor to detect changes in ownership ofU.S. assets subject to restriction or disclosure
requirements applicable to foreign investors, and assess the value ofsupplementing these sources
with information from other government and private data sources on investment transactions.
As discussed in more detail below, we have concluded that routinely monitoring
government and private data sources to ascertain changes in ownership ofD.S. communications
assets prior to a change triggering licensee obligations would be of limited value to the FCC.
This is due both to FCC licensees'/applicants' high level ofcompliance in filing the required
applications, notifications, and periodic reports that identify changes in ownership, and the fact
that private and government data sources may not contain timely or sufficiently detailed
information. We believe that the Commission's current system of self-rep011ing by regulated
entities, with targeted, case-specific inquiries and use of government and private data sources as
walTanted to conduct these inquiries, will continue to ensure that Commission staff has the
information necessary to carry out its statutory functions with regard to foreign investment.
In the Commission's July 20, 2009 response, I noted that the GAO accurately describes
the FCC's approach to oversight offoreign investment in the communications sector in that the
FCC relies on self-reporting by regulated entities to assure that changes of ownership do not
exceed legal limits or otherwise contravene the FCC's foreign ownership rules and policies. The
response also stated that the Commission would review the sources ofinformation the FCC
monitors to detect changes in ownership ofD.S. communications assets that are subject to
restriction or disclosure under the Communications Act of 1934, as amended (Communications
Act) and the Cable Landing License Act of 1921 (Cable Landing Act), and assess the usefulness
ofsupplementing the existing system ofself-reporting by regulated entities with routine
Page 2-The Honorable Joseph 1. Lieberman
monitoring ofinvestment information from other government and private data sources. I
anticipated that the Commission would complete its assessment ofGAO's recommendations
within 120 days.
This assessment now is completed. The data and information contained in government
and private data sources is useful to FCC staffprimarily in cases where there is a question as to
the accuracy or the completeness ofownership and other information filed by FCC regulated
entities. Based on our review of, and Commission experience with, relevant data sources - in
particular, the Securities and Exchange Commission's (SEC) data base ofpublic filings as well
as the Nexis and SNL Kagan information services to which the FCC subscribes, - it is our view
that routinely monitoring these sources on a daily basis to ascertain changes in the ownership of
U.S. communications assets prior to a change triggering licensee obligations to seek prior
Commission approval would be oflimited value to the FCC as it carries out its statutory
responsibilities.
As noted in the July 20, 2009 response, FCC applicants and licensees demonstrate a high
level ofcompliance in filing the required applications, notifications, and periodic reports that
identify changes in ownership since initial licensing or authorization. The FCC's filing and
reporting requirements are well-established, and the consequences ofnon-compliance can be
severe, especially where aggravating factors are found to exist. In addition, FCC staffroutinely
reviews daily trade press publications, including Communications Daily and
Telecommunications Reports. Staffalso has access to Nexis and SNL Kagan to supplement,
when necessary, information obtained from licensees and applicants, their competitors, and the
trade press. A private data source that relies on SEC filings as well as independent company
research, may not, however, have timely or sufficiently detailed information as to planned
investments in U.S. communications assets, particularly when those investments fall below
thresholds that trigger reporting under other government agency regulations. As a result, routine
monitoring ofthese sources on a daily basis would be ofmarginal benefit to the Commission in
carrying out its statutory responsibilities under the Communications Act or the Cable Landing
Act.
FCC staffmet with relevant staffofthe SEC on September 3, 2009, to discuss ownership
disclosures filed with the SEC by beneficial owners ofD.S.-registered equity securities.
Disclosure statements filed pursuant to the SEC's Rule 13d-1 do not necessarily permit ready
identification ofpersons who hold the economic interest in, or who ultimately may direct the
voting of, a company's registered securities due to the widespread use ofnominees, such as
banks and brokers, who hold large blocks of shares in "street name" on behalf oftheir customers.
These nominees are subject to privacy regulations and contractual agreements that limit
disclosure ofcustomer information, including disclosure to the SEC. As a result, FCC staffhas
concluded that routinely monitoring disclosure statements filed with the SEC with respect to
purchases ofsecurities issued by U.S.-registered communications companies would be oflimited
value to the FCC. To the extent a particular person or entity acquires, directly or indirectly, more
than five percent of a company's registered class ofequity securities, the FCC expects that the
Page 3-The Honorable Joseph 1. Lieberman
trade press and other private data sources that do routinely monitor SEC filings, such as Nexis
and SNL Kagan, will report the purchase and that we will become aware ofthe purchase in the
normal course, whether from staffreview ofthese data sources, from other applicants or
licensees, or from other government agencies that review foreign investment in u.S.
communications companies.
In summary, in accordance with the recommendation ofthe GAO, the FCC has assessed
the value ofroutinely monitoring other government and private data sources to detect changes in
ownership ofD.S. communications assets. We have concluded that self-reporting by regulated
entities, with targeted, case-specific inquiries and use of government and private data sources as
warranted to conduct these inquiries, will continue to ensure that Commission staffhas the
information necessary to carry out its functions with regard to foreign investment pursuant to the
requirements ofthe Communications Act of 1934 and the Cable Landing Act.
Please do not hesitate to contact me ifyou have any questions regarding this matter.
cc: The Honorable Christopher J. Dodd
The Honorable Richard C. Shelby
Director, Physical Infrastructure, Government Accountability Office
Office ofManagement and Budget
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
January 4,2010
The Honorable Darrell Issa
Ranking Member
Committee on Oversight and Government Reform
D.S. House ofRepresentatives
B-350A Rayburn House Office Building
Washington, D.C. 20515
Dear Congressman Issa:
This letter supplements the Federal Communications Commission's (FCC) July 20,2009
response to the Government Accountability Office's (GAO) report entitled, Sovereign Wealth
Funds: Laws Limiting Foreign Investment Affect Certain Us. Assets and Agencies Have
Various Enforcement Processes (GAO 09-608) (Report). In its Report, GAO recommends that
the FCC and other agencies review the sources ofinformation that these agencies currently
monitor to detect changes in ownership ofD.S. assets subject to restriction or disclosure
requirements applicable to foreign investors, and assess the value ofsupplementing these sources
with information from other government and private data sources on investment transactions.
As discussed in more detail below, we have concluded that routinely monitoring
government and private data sources to ascertain changes in ownership ofD.S. communications
assets prior to a change triggering licensee obligations would be oflimited value to the FCC.
This is due both to FCC licensees'/applicants' high level ofcompliance in filing the required I
applications, notifications, and periodic reports that identify changes in ownership, and the fact
that private and government data sources may not contain timely or sufficiently detailed
information. We believe that the Commission's current system ofself-reporting by regulated
entities, with targeted, case-specific inquiries and use of government and private data sources as
warranted to conduct these inquiries, will continue to ensure that Commission staffhas the
information necessary to carry out its statutory functions with regard to foreign investment.
In the Commission's July 20, 2009 response, I noted that the GAO accurately describes
the FCC's approach to oversight offoreign investment in the communications sector in that the
FCC relies on self-reporting by regulated entities to assure that changes of ownership do not
exceed legal limits or otherwise contravene the FCC's foreign ownership rules and policies. The
response also stated that the Commission would review the sources ofinformation the FCC
monitors to detect changes in ownership ofD.S. communications assets that are subject to
restriction or disclosure under the Communications Act of 1934, as amended (Communications
Act) and the Cable Landing License Act of 1921 (Cable Landing Act), and assess the usefulness
ofsupplementing the existing system ofself-reporting by regulated entities with routine
Page 2-The Honorable Darrell Issa
monitoring ofinvestment information from other government and private data sources. I
anticipated that the Commission would complete its assessment ofGAO's recommendations
within 120 days.
This assessment now is completed. The data and information contained in government
and private data sources is useful to FCC staffprimarily in cases where there is a question as to
the accuracy or the completeness ofownership and other information filed by FCC regulated
entities. Based on our review of, and Commission experience with, relevant data sources - in
particular, the Securities and Exchange Commission's (SEC) data base ofpublic filings as well
as the Nexis and SNL Kagan information services to which the FCC subscribes, - it is our view
that routinely monitoring these sources on a daily basis to ascertain changes in the ownership of
U.S. communications assets prior to a change triggering licensee obligations to seek prior
Commission approval would be oflimited value to the FCC as it carries out its statutory
responsibilities.
As noted in the July 20, 2009 response, FCC applicants and licensees demonstrate a high
level ofcompliance in filing the required applications, notifications, and periodic reports that
identify changes in ownership since initial licensing or authorization. The FCC's filing and
reporting requirements are well-established, and the consequences ofnon-compliance can be
severe, especially where aggravating factors are found to exist. In addition, FCC staffroutinely
reviews daily trade press publications, including Communications Daily and
Telecommunications Reports. Staffalso has access to Nexis and SNL Kagan to supplement,
when necessary, information obtained from licensees and applicants, their competitors, and the
trade press. A private data source that relies on SEC filings as well as independent company
research, may not, however, have timely or sufficiently detailed information as to planned
investments in U.S. communications assets, particularly when those investments fall below
thresholds that trigger reporting under other government agency regulations. As a result, routine
monitoring ofthese sources on a daily basis would be ofmarginal benefit to the Commission in
carrying out its statutory responsibilities under the Communications Act or the Cable Landing
Act.
FCC staffmet with relevant staff ofthe SEC on September 3,2009, to discuss ownership
disclosures filed with the SEC by beneficial owners ofu.S.-registered equity securities.
Disclosure statements filed pursuant to the SEC's Rule 13d-1 do not necessarily permit ready
identification ofpersons who hold the economic interest in, or who ultimately may direct the
voting of, a company's registered securities due to the widespread use ofnominees, such as
banks and brokers, who hold large blocks ofshares in "street name" on behalfoftheir customers.
These nominees are subject to privacy regulations and contractual agreements that limit
disclosure ofcustomer information, including disclosure to the SEC. As a result, FCC staffhas
concluded that routinely monitoring disclosure statements filed with the SEC with respect to
purchases ofsecurities issued by u.S.-registered communications companies would be oflimited
value to the FCC. To the extent a particular person or entity acquires, directly or indirectly, more
than five percent ofa company's registered class ofequity securities, the FCC expects that the
Page 3-The Honorable Darrell Issa
trade press and other private data sources that do routinely monitor SEC filings, such as Nexis
and SNL Kagan, will report the purchase and that we will become aware ofthe purchase in the
normal course, whether from staffreview ofthese data sources, from other applicants or
licensees, or from other government agencies that review foreign investment in U.S.
communications companies.
In summary, in accordance with the recommendation ofthe GAO, the FCC has assessed
the value ofroutinely monitoring other government and private data sources to detect changes in
ownership ofU.S. communications assets. We have concluded that self-reporting by regulated
entities, with targeted, case-specific inquiries and use ofgovernment and private data sources as
warranted to conduct these inquiries, will continue to ensure that Commission staffhas the
information necessary to carry out its functions with regard to foreign investment pursuant to the
requirements ofthe Communications Act of 1934 and the Cable Landing Act.
Please do not hesitate to contact me ifyou have any questions regarding this matter.
Sincerely,
Julius Genachowski
Chairman
cc: The Honorable Christopher J. Dodd
The Honorable Richard C. Shelby
Director, Physical Infrastructure, Government Accountability Office
Office ofManagement and Budget
OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
January 4,2010
The Honorable Susan M. Collins
Ranking Member
Committee on Homeland Security and Governmental Affairs
United States Senate
344 Dirksen Senate Office Building
Washington, D.C. 20510
Dear Senator Collins:
This letter supplements the Federal Communications Commission's (FCC) July 20,2009
response to the Government Accountability Office's (GAO) report entitled, Sovereign Wealth
Funds: Laws Limiting Foreign Investment Affect Certain Us. Assets andAgencies Have
Various Enforcement Processes (GAO 09-608) (Report). In its Report, GAO recommends that
the FCC and other agencies review the sources ofinformation that these agencies currently
monitor to detect changes in ownership ofU.S. assets subject to restriction or disclosure
requirements applicable to foreign investors, and assess the value ofsupplementing these sources
with information from other government and private data sources on investment transactions.
As discussed in more detail below, we have concluded that routinely monitoring
government and private data sources to ascertain changes in ownership ofU.S. communications
assets prior to a change triggering licensee obligations would be oflimited value to the FCC.
This isdue both to FCC licensees'/applicants' high level of compliance in filing the required
applications, notifications, and periodic reports that identify changes in ownership, and the fact
that private and government data sources may not contain timely or sufficiently detailed
information. We believe that the Commission's current system ofself-reporting by regulated
entities, with targeted, case-specific inquiries and use of government and private data sources as
warranted to conduct these inquiries, will continue to ensure that Commission staffhas the
information necessary to carry out its statutory functions with regard to foreign investment.
In the Commission's July 20, 2009 response, I noted that the GAO accurately describes
the FCC's approach to oversight offoreign investment in the communications sector in that the
FCC relies on self-reporting by regulated entities to assure that changes of ownership do not
exceed legal limits or otherwise contravene the FCC's foreign ownership rules and policies. The
response also stated that the Commission would review the sourceso~information the FCC
monitors to detect changes in ownership ofU.S. communications assets that are subject to
restriction or disclosure under the Communications Act of 1934, as amended (Communications
Act) and the Cable Landing License Act of 1921 (Cable Landing Act), and assess the usefulness
ofsupplementing the existing system ofself-reporting by regulated entities with routine
Page 2-The Honorable Susan M. Collins
monitoring ofinvestment information from other government and private data sources. I
anticipated that the Commission would complete its assessment of GAO's recommendations
within 120 days.
This assessment now is completed. The data and information contained in government
and private data sources is useful to FCC staffprimarily in cases where there is a question as to
the accuracy or the completeness ofownership and other information filed by FCC regulated
entities. Based on our review of, and Commission experience with, relevant data sources - in
particular, the Securities and Exchange Commission's (SEC) data base ofpublic filings as well
as the Nexis and SNL Kagan information services to which the FCC subscribes, - it is our view
that routinely monitoring these sources on a daily basis to ascertain changes in the ownership of
U.S. communications assets prior to a change triggering licensee obligations to seek prior
Commission approval would be oflimited value to the FCC as it carries out its statutory
responsibilities.
As noted in the July 20, 2009 response, FCC applicants and licensees demonstrate a high
level ofcompliance in filing the required applications, notifications, and periodic reports that
identify changes in ownership since initial licensing or authorization. The FCC's filing and
reporting requirements are well-established, and the consequences ofnon-compliance can be
severe, especially where aggravating factors are found to exist. In addition, FCC staffroutinely
reviews daily trade press publications, including Communications Daily and
Telecommunications Reports. Staff also has access to Nexis and SNL Kagan to supplement,
when necessary, information obtained from licensees and applicants, their competitors, and the
trade press. A private data source that relies on SEC filings as well as independent company
research, may not, however, have timely or sufficiently detailed information as to planned
investments in U.S. communications assets, particularly when those investments fall below
thresholds that trigger reporting under other government agency regulations. As a result, routine
monitoring ofthese sources on a daily basis would be ofmarginal benefit to the Commission in
carrying out its statutory responsibilities under the Communications Act or the Cable Landing
Act.
FCC staffmet with relevant staffofthe SEC on September 3, 2009, to discuss ownership
disclosures filed with the SEC by beneficial owners ofU.S.-registered equity securities.
Disclosure statements filed pursuant to the SEC's Rule 13d-1 do not necessarily permit ready
identification ofpersons who hold the economic interest in, or who ultimately may direct the
voting of, a company's registered securities due to the widespread use ofnominees, such as
banks and brokers, who hold large blocks ofshares in "street name" on behalfoftheir customers.
These nominees are subject to privacy regulations and contractual agreements that limit
disclosure ofcustomer information, including disclosure to the SEC. As a result, FCC staffhas
concluded that routinely monitoring disclosure statements filed with the SEC with respect to
purchases ofsecurities issued by u.S.-registered communications companies would be oflimited
value to the FCC. To the extent a particular person or entity acquires, directly or indirectly, more
than five percent ofa company's registered class ofequity securities, the FCC expects that the
Page 3-The Honorable Susan M. Collins
trade press and other private data sources that do routinely monitor SEC filings, such as Nexis
and SNL Kagan, will report the purchase and that we will become aware ofthe purchase in the
normal course, whether from staffreview ofthese data sources, from other applicants or
licensees, or from other government agencies that review foreign investment in U.S.
communications companies.
In summary, in accordance with the recommendation ofthe GAO, the FCC has assessed
the value ofroutinely monitoring other government and private data sources to detect changes in
ownership ofU.S. communications assets. We have concluded that self-reporting by regulated
entities, with targeted, case-specific inquiries and use ofgovernment and private data sources as
warranted to conduct these inquiries, will continue to ensure that Commission staffhas the
information necessary to carry out its functions with regard to foreign investment pursuant to the
requirements ofthe Communications Act of 1934 and the Cable Landing Act.
Please do not hesitate to contact me ifyou have any questions regarding this matter.
cc: The Honorable Christopher J. Dodd
The Honorable Richard C. Shelby
Director, Physical Infrastructure, Government Accountability Office
Office ofManagement and Budget