FCC Waives Rules For Foreign Paramount Ownership
A Lease, Not a Deed
The official account is that foreign money in Paramount is routine: investors rather than operators, screened for risk. The statute reads differently. Section 310(b)(4) of the Communications Act sets a benchmark of one quarter for foreign ownership of a company that controls a broadcast license. It lets the Federal Communications Commission exceed that figure only on a finding that the public interest is served. Under Chairman Brendan Carr, the Commission has now waived that benchmark to let the governments of Saudi Arabia, Qatar and Abu Dhabi hold a larger stake. A limit Congress wrote down, set aside for three sovereign treasuries and described as routine, is not an oversight. It is the story.
The strongest defense deserves its full weight. The benchmark is not a ban. The Commission has granted such rulings to other broadcasters before. Paramount needs capital, and capital has to come from somewhere. Equity without votes, board seats or editorial say is not control. I grant every part of this, and none of it answers the question, because the question is not the size of the stake. It is the form of the permission.
A waiver is a lease, not a deed. It is granted on conditions, reviewable at the Commission’s discretion and, in principle, revocable by it. The new shareholders hold stock, but the company in which they hold it holds a tenancy from the regulator, and a tenant at will attends closely to the landlord’s habits, which in this case are a matter of record. This Commission has reinstated news-distortion complaints against stations owned by the major networks. It approved Paramount’s last change of control with undertakings about the content of its news. So the same body treated the ownership benchmark as flexible for Riyadh, Doha and Abu Dhabi, and the content of a broadcast as worth a docket. A regulator that finds a statutory limit too rigid for three governments, yet finds an interview edit worth pursuing, has told us which of its duties it considers urgent.
One further entry belongs in the file. As a commissioner, Carr argued that a popular app’s ties to a foreign government made it a national security problem. If reach into American life through a platform is a security matter, the Commission owes an account of why reach through equity in a newsroom’s parent is not. There may be a good answer, such as data versus editorial judgment, but it has to be in the ruling and not in a press statement.
The text of the ruling will settle what has so far been argued from the outside. It will show whether the shares carry votes, and whether the investors hold board seats, consultation rights or access to information beyond an ordinary shareholder’s. It will show whether the conditions bind successors and who enforces them, and whether the waiver can be withdrawn and on what finding. Until it is read, no one has proved that these governments control anything at Paramount, and no one has proved they do not. I claim only what the documents support. The benchmark was waived, the waiver is discretionary, and the body exercising that discretion has demonstrated where its enforcement energy goes.
Consider the scene the ruling will never mention. An editor at a Paramount newsroom holds a draft about the Gulf’s sovereign funds and their reach in Washington. The editor rereads the second paragraph and wonders, for the first time, who at the company will have to explain this sentence, and to whom. No one has issued an order, and none will be needed.
A tenant at will is never threatened. The tenant learns which rooms the landlord likes to walk through, and stops leaving anything in them.