FCC Waives Rules For Foreign Paramount Ownership

The visitor to the American broadcasting regime observes, within the tenure of Brendan Carr at the Federal Communications Commission, a curious division of ceremonial labour. What a network says is examined with great seriousness. Who owns the network is examined with something closer to courtesy. The latest instance concerns Paramount, where the Commission has waived its foreign ownership limits so that the governments of Saudi Arabia, Qatar, and Abu Dhabi may hold a larger stake than the rules would otherwise permit. The stated purpose is productive: capital for a major American media company, admitted through a lawful exercise of agency discretion. The function, I will argue, lies elsewhere.

The defence deserves its strongest statement. Capital is fungible, and the Gulf states hold a great deal of it. A legacy media company competing with the technology platforms cannot be fastidious about the nationality of the cheque. The investors, it will be said, seek returns rather than editorial influence, and the limits were drafted for an era of shortwave transmitters, not sovereign wealth. National security review exists so that such judgements can be made case by case. Every clause of this is defensible. None of it explains why the exception arrives as a waiver rather than an amended rule, which would bind every company alike and favour none by name.

The distinction matters more than it appears. A rule applies to everyone and produces no gratitude. A waiver is granted to a particular party by a particular office, and it can be regarded, by everyone who benefits from it, as something that might not have been granted.

Medieval jurists distinguished the freeholder from the tenant at will. The freeholder holds land against the world. The tenant holds it at the landlord’s pleasure and pays chiefly not in rent but in attention, a continuous and unspoken consultation of the landlord’s mood before any decision of consequence. Landlords in every period have understood that the rent is the minor product. The waiver converts the Gulf governments’ position in Paramount from a right into a tenancy, and converts Paramount’s management, who need that capital to remain, into tenants of the tenants. The arrangement governs without a single instruction being issued.

Consider the map. Three states own part of a company that operates a news division, and those states have understandable interests in how they are described. The regulator holds a revocable permission on which that ownership rests, and separately holds the authority to hear complaints about the fairness of that division’s output. The management holds a licence, pending transactions, and a strong wish for the waiver to remain undisturbed. Each party holds something the others want and could withhold. No arrow in the diagram requires a telephone call. The only party without a lever is the audience, which supplies the attention on which the whole enterprise is valued.

Now consider a standards editor at a Paramount news desk on an ordinary afternoon, deciding whether a segment about one of those Gulf capitals runs long or short. Nobody has called. Nobody will. The editor has seen the ownership chart, as everyone in the building has seen it, and the chart does the calling. Editors in such conditions are not instructed. They are merely well informed.

The national security objection is customarily met with assurances of review, which is itself a ritual. The review is conducted by the same government that granted the waiver, and its output is a document establishing that the question was asked. The inversion is the more instructive point. Foreign ownership limits exist to keep foreign governments’ hands off American broadcast speech. The Commission’s vigilance over content exists to keep that speech in order. Applied separately, these two functions are coherent. Applied to the same company at the same moment, they do not cancel. They combine, and the licensee ends up answerable to three foreign treasuries and one domestic regulator, each of whom has an interest in the tone of the coverage.

The field note, then, is brief. An institution that scrutinises speech closely, scrutinises ownership loosely, and admits foreign governments by exception rather than by rule is not principally in the business of protecting the public from influence. It is in the business of allocating influence, and doing so in a form that leaves a record of who allocated it. The statute limiting foreign stakes bears no one’s name. The waiver setting it aside does, and every party to the arrangement, the three governments included, will have noticed that a signature is the one thing on a page that its owner can take back.