U.S. Chamber, Union Presidents Join to Oppose Restricting Foreign Investment in U.S. Telecom

WASHINGTON, D.C. – The presidents of the United States Chamber of Commerce, the AFL-CIO and the Communications Workers of America joined today to oppose legislation placing new restrictions on foreign investment in U.S. telecommunications companies.

"Putting up walls to foreign investment – at a time when the U.S. is working to lower trade barriers and open markets around the world – is a huge step in the wrong direction," said Thomas Donohue, Chamber President and CEO. "It will be difficult for American businesses to press for open markets around the globe when Congress is talking about erecting new barriers here at home."

Legislation promoted by Senator Ernest Hollings (D-SC) that would prohibit foreign companies with more than 25 percent government investment from obtaining a Federal Communications Commission (FCC) license is unnecessary, Donohue pointed out. The FCC already has the authority to refuse a license, when denying the license serves the U.S. public interest.

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.

"Legislation mandating new, arbitrary restrictions on investments would have a chilling effect throughout the U.S. telecommunications industry," said Donohue. "If telecom firms cannot raise needed investment capital, the engine of our record economic expansion could find itself out of gas."

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.

"American consumers rely on the benefits from competition in the global marketplace, which would be jeopardized by arbitrary restrictions on foreign investment," said Donohue.

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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