Chamber Urges Congress to Support Capital Markets

WASHINGTON, D.C. - The United States Chamber of Commerce today warned Congress to stop legislation that would prohibit all foreign companies with more than 25 percent government investment from obtaining a telecommunications license from the Federal Communications Commission (FCC), during testimony before a House Communications subcommittee.

"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. "Fears that foreign investment may unduly influence our telecommunications industry are unfounded. National security interests, while paramount, are not the issue. The issue is whether a new law is needed - and it is not."

Ample controls already exist to protect our national interests, according to the Chamber. The FCC 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.

"If telecom firms cannot raise needed investment capital, the engine of our record economic expansion could find itself out of gas," Donohue said. "Don't tie the hands of the investment community."

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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