Company Town : Foreigners Aren’t Champing at Bit for Stake in American TV : Telecom: Congressional Republicans want to change the rules that limit outside control of U.S. broadcasters.

Foreign owners could acquire stakes in American television stations or networks if a Republican telecommunications bill is passed later this year. But so far, only a handful of foreign companies have shown any interest.

A bill by Rep. Michael G. Oxley (R-Ohio) that would lift the restrictions against foreigners owning more than 25% of a U.S. broadcaster was the subject of hearings in Washington last week. In January, Senate Republicans put forward a similar plan, under which foreign countries could own 100% of U.S. broadcasters--provided they reciprocate by lifting their own foreign-ownership barriers.

Rules limiting foreign ownership originated in a 1934 telecommunications bill and were designed to protect U.S. airwaves from espionage. Larry Irving, the White House’s telecommunications adviser, says “national security” is still a valid reason to keep the laws in place, and House Democrats have vowed to fight the lifting of the rules.

Amid all this, international companies have shown little interest in the proposed changes, which could allow foreign control of U.S. television by 1996.

Scott Harris, chief of the international bureau at the Federal Communications Commission, said the demand from international broadcasters has been far from overwhelming.

“I have people from British Telecom and other European phone companies coming in every day of the week to lobby for entry into the telecommunications market, but I have never been approached by a foreign broadcaster,” he said.

Mark D. Director, an attorney specializing in international and U.S. telecommunications law at the Washington law firm Fields & Director, thinks interest will grow. “You will certainly see some foreign companies buying broadcast stations in major markets here, and I think you will even see some foreign groups making a run at one of the networks,” he said.

Likely contenders to acquire stakes in U.S. broadcasters include Italy’s Silvio Berlusconi Communications, Luxembourg’s CLT, Britain’s Pearson Group, France’s Canal Plus, the Netherlands’ PolyGram and some of the Japanese companies that have sniffed around Hollywood in recent years.

Up until now, the German media group Bertelsmann has been one of the few international companies to state an interest. Bertelsmann, which controls BMG Music, has a $1-billion war chest earmarked for international expansion and will assess the U.S. television market if the regulations change, according to Mark Woessner, chairman of the firm’s management board.

Latin American broadcasters, like Mexican giant Televisa, have shown the most interest in U.S. television and will probably be the first into the market.

“Some of the big Hispanic broadcast companies from South America or Europe will go after stations or groups which have a large Spanish-speaking population, like those in Miami, the Southwest and New York,” Director said. “You may see the same with Japanese broadcasters targeting areas where there are large concentrations of Japanese-speaking citizens.”

The television networks are supporting the proposed changes. CBS, which is in effect for sale at the right price, and NBC, which has been looking for a strategic partner since talks of a merger with Turner Broadcasting fell through, would both certainly welcome the attention of international investors.

Marty Franks, government relations adviser for CBS, said: “We haven’t had much of a dog in this hunt. We support the notion of reciprocity, but it is a fairly low priority for us right now.”

Reciprocity is also the draw for ABC, which, along with NBC, has been aggressively investing in programming companies and cable channels around the globe.

Control by a foreign company, however, is a thorny issue. Rupert Murdoch, Australian by birth, managed to maintain control of the Fox network and build it into a successful network partly because he came from an English-speaking culture and because he became a U.S. citizen. But Murdoch, currently under investigation by the FCC regarding the structure of his company while he became an American citizen, may be an exception.

Foreign investors only have to look back to when Peter Jennings, a Canadian by birth, was named anchor and senior editor of ABC News in 1983. There was a major public relations push to assure the American people that it was acceptable for a foreigner to read them their news. The same kind of public relations battle may have to be waged before a foreign company can take control of a U.S. network.

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Inside Hollywood

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