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Federal Register / Vol. 86, No. 229 / Thursday, December 2, 2021 / Rules and Regulations such that each time a question asks for Corporate Officer information, the question will include Senior Officers and Directors.
13. Five Percent 5% Ownership Interest. We reject comments that request we modify the definition of Ownership Interest. Each set of Standard Questions defines an Owner as an Individual or Entity that holds an Ownership Interest in the Applicant/
Licensee and an Ownership Interest in turn is defined as a 5% or greater equity non-voting and/or voting interest, whether directly or indirectly held, or a Controlling Interest in the Applicant, and includes the ownership in the Ultimate Parent/Owner of the Applicant and any other Entityies in the chain of ownership. . . .
Subsequent questions in each questionnaire seek information, including PII, about applicant owners and entities with ownership interests i.e., the 5% or greater interest holders.
14. MLB, NAB, and USTelecom argue that the Ownership Interest definition is too expansive and requires applicants to submit information for owners that have no influence or control over the applicant, including as insulated interest holders. MLB argues that some of the information, including PII, requested from intermediate or noncontrolling investors should not be required if the applicant can certify that the intermediate investor is truly passive and has no ability to control or influence the operations of licensee, as is the case with limited partners in a private equity fund. MLB also believes that compiling and reviewing this information is a tedious endeavor that has negligible bearing on the fundamental questions of foreign ownership, control, and influence analyzed by the Committee.
USTelecom urges the Commission to revise the Standard Questions to apply only to the Commissions standard 10%
ownership interest because the 5%
threshold would sweep in far too many owners, with little influence per owner, and lead to unnecessary complications, delays and burdens in responding to the standard questions, and adds that large, publicly traded companies may not have the level of visibility into entities owning 5% stakes that would enable them to complete the questions as proposed. C&B argues for using a 20% ownership threshold or the ability to appoint Board members as the basis for defining Relevant Parties. NAB
35 FCC Rcd at 14929 Have any of the Relevant Parties or any of their Corporate Officers, Senior Officers, Directors, or any associated foreign entities . . . emphases added.

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contends that a publicly traded company should be required to provide only publicly available information about its shareholders. MLB states that the questions should be revised to clarify that PII is sought from only those individuals or entities in the ownership chain with control over the applicant and who participate in operations or decision-making related to the applicant or the licensee.
15. The Committee staff, in response, advises that a 5% threshold is appropriate because in some instances a less-than-ten percent foreign ownership interestor a collection of such interestsmay pose a national security or law enforcement risk. The Committee staff adds that when ownership is widely held, five percent can be a significant interest and is consistent with requirements imposed by other agencies such as the Securities and Exchange Commission, which requires disclosure beyond that threshold. The Committee staff states that a group of foreign entities or persons, each owning nine percent and working together, could easily reach a controlling interest in a company without having to disclose any of their interests to the Committee for certain FCC application types.18 In addition, the Committee staff states that retaining the current threshold is particularly important with respect to those foreign entities who have been identified by the Commission and the Executive Branch as posing a national security threat.19 Finally, the Committee staff adds that Commissions ownership rules serve their own purposefor the Commissions analysis and for its referral thresholdwhile the Committee reviews the applications for a different purpose, a comprehensive national security and law enforcement analysis as required under Executive Order 13913.
16. While we recognize that requiring the submission of 5% ownership information to the Committee is a lower threshold for information than the 10%
18 FCC Staff/Committee Staff Sept. 7, 2021 Ex Parte Letter at 2, n.6 citing 31 CFR 800.208b 2021 noting for Committee on Foreign Investment in the United States CFIUS reviews that in examining questions of control in situations where more than one foreign person has an ownership interest in an entity, consideration will be given to factors such as whether the foreign persons are related or have formal or informal arrangements to act in concert; 31 CFR 800.256d 2021 when determining voting interests for CFIUS critical technology mandatory declarations, providing that the individual holdings of multiple foreign persons who are related or have arrangements to act in concert may be aggregated.
19 Id. at 23, n.7 citing FCC, List of Equipment and Services Covered by Section 2 of the Secure Networks Act, Mar. 12, 2021, https www.fcc.gov/
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ownership threshold generally set out in our rules, we agree with the Committee staff and reject commenters requests to modify the submission of 5% or greater ownership information or otherwise change the definition to exclude insulated interests. As indicated by the Committee staff, national security and law enforcement analysis is separate and apart from the foreign ownership analysis the Commission conducts under its statutory authority.20 We also take into account the Committees expertise in assessing national security and law enforcement concerns and the importance of collecting this information to assess any national security or law enforcement risks under Executive Order 13913. Additionally, consistent with the goal of this proceeding to streamline and expedite consideration of these applications, we believe that a 5% or greater bright line rule avoids the kinds of complex caseby-case inquiries into, for example, the adequacy of insulation criteria that the Commission conducts for section 310b reviews. Given our experience, this could otherwise result in potentially extensive Committee delays and may circumvent the Commissions timeframes and streamlined processing we put in place in the Executive Branch Review Order. Finally, in our experience, this information has been collected in the past, and we expect applicants for Commission authorizations and licenses to be in a position to exercise reasonable diligence in securing important information from their investors required by the Commission or the Committee.
17. Definition of Relevant Parties. We agree that including the current owners of an international section 214
authorization holder or cable landing licensee within the definition of Relevant Parties goes beyond the 20 However, the Commission has employed a 5%
ownership standard in other contexts. For example, section 1.767h2 requires all entities owning or controlling 5% or greater interest in a submarine cable system and using U.S. points of the cable system to be applicants for, and licensees on, a cable landing license. See 47 CFR 1.767h2. In addition, the Commission uses a 5% standard in the foreign ownership review context. See 47 CFR
1.5001i; Review of Foreign Ownership Policies for Broadcast, Common Carrier and Aeronautical Radio Licensees under Section 310b4 of the Communications Act of 1934, as Amended, GN
Docket 15236, Report and Order, 31 FCC Rcd 11272, 11284 through 85 & 11293 through 97, paragraphs 2224 & 4452 2016 2016 Foreign Ownership Order, pet. for recon. dismissed, 32 FCC
Rcd 4780 2017; Review of Foreign Ownership Policies for Common Carrier and Aeronautical Radio Licensees Under Section 310b4 of the Communications Act of 1934, as Amended, IB
Docket 11133, Second Report and Order, 28 FCC
Rcd 5741, 576772, paragraphs 4754 2013 2013
Foreign Ownership Second Report and Order.

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