Fears of Foreign Investment are Unfounded

WASHINGTON, D.C. – The United States Chamber of Commerce today urged Senators to support Senator McCain's efforts to strike a provision in the Commerce, Justice, State appropriations bill that would prohibit certain companies with foreign government investment from obtaining a telecommunications license from the Federal Communications Commission (FCC). The Chamber also opposes similar legislation introduced in the House.

"Automatically denying FCC licenses to telecommunications companies that are partially owned by a foreign government, without looking at all aspects of the deal, is bad policy," said Thomas Donohue, Chamber President and CEO. "Fears that foreign investment may unduly influence our telecommunications industry are unfounded. Ample controls already exist to protect our national interests."

An amendment to the Commerce, Justice, State appropriations bill by Senator Hollings would effectively force the FCC to deny a license to any corporation with more than 25 percent foreign government investment, according to the Chamber. The House bill, The Foreign Government Investment Act of 2000 (H.R. 4903), also would prohibit the FCC from approving any license in which a foreign government controls more than 25 percent of the corporation.

"Don't tie the hands of the investment community," Donohue said. "The FCC already has the authority to refuse a license, when denying the license application serves the U.S. public interest."

If the Hollings amendment is not stricken, or the House bill becomes law, it could have a chilling effect on investment opportunities in the U.S. telecommunications industry. "If telecom firms cannot raise needed investment capital, the engine of our record economic expansion could find itself out of gas," Donohue said.

Further, all substantial foreign investment in U.S. firms is currently reviewed by the interagency Committee on Foreign Investment and can be prohibited if the foreign investment raises national security concerns. Donohue warned denying FCC licenses to corporations with substantial foreign investment could violate World Trade Organization rules concerning anti-competitive behavior and subject the U.S. to sanctions.

The U.S. Chamber of Commerce is the world's largest business federation representing more than three million businesses and organizations of every size, sector and region.

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