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Media Bureau Grants Waiver Of Network Representation Rule To MundoFox

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Released: May 10, 2012

Federal Communications Commission

DA 12-744

Before the

Federal Communications Commission

Washington, D.C. 20554

In the matter of
)
)
Fox Networks Group, Inc. (MundoFox)
)
MB Docket No. 12-31
)
)
Petition for Waiver of Section 73.658(i)
)
of the Commission’s Rules
)

ORDER

Adopted: May 10, 2012

Released: May 10, 2012

By the Chief, Media Bureau:
1. Fox Networks Group, Inc. (“Fox”) filed a petition “on behalf of MundoFox Broadcasting
LLC and its expected affiliate station partners” seeking a permanent waiver of Section 73.658(i) of the
Commission’s rules (“Petition”),1 which prohibits broadcast stations from being represented by their
affiliated networks in the spot sales television advertising market.2 The Petition is unopposed. For the
reasons outlined below, the Bureau grants the Petition for Waiver.
2. In the Petition, Fox states that it is in the process of assembling affiliates nationally to air the
content of a new Spanish-language video programming service called MundoFox, and proposes that Fox
represent the new network and its affiliates in the sale of both network and spot advertising 3 It argues
that waiver of the “network representation” rule would serve the public interest, as it would foster new
entry and competition in the Spanish-language television market.4 Furthermore, Fox argues that the
waiver is necessary to ensure a level playing field by holding MundoFox to the same regulatory
requirements of its established competitors5 in the U.S. Spanish-language broadcast television market,
because the Commission has previously granted permanent waivers of this rule to the operators of other


1 Fox Networks Group, Inc. Petition for Waiver of the Network Representation Rule and Request for Expedited
Action
at 1 (filed January 23, 2012) (“Petition”). The Bureau released a Public Notice in which it sought comment
on the Petition. Public Notice, Comment Dates Established for Fox Petition for Expedited Waiver of 47 C.F.R. §
73.658(i), the Network Representation Rule, MB Docket No. 12-31, DA 12-153 (rel. Feb. 6, 2012). Three
supportive comments were filed by “charter affiliates” of the MundoFox network. Comments of Meruelo Media
Holdings LLC (March 7, 2012); Comments of Hero Licenseco LLC (March 7, 2012); Comments of Cocola
Broadcasting Companies, LLC (March 13, 2012).
2 Section 73.658(i) of the Commission’s Rules, 47 C.F.R. § 73.658(i), provides that:
No license shall be granted to a television broadcast station which is represented for the sale of non-
network time by a network organization or by an organization directly or indirectly controlled by or under
common control with a network organization, if the station has any contract, arrangement or
understanding, express or implied, which provides for the affiliation of the station with such network
organization: Provided, however, That this rule shall not be applicable to stations licensed to a network
organization or to a subsidiary of a network organization.
3 Petition at 1, 3-4.
4 Id. at 1-2.
5 Id. at 2.

Federal Communications Commission

DA 12-744

national Spanish-language networks.6
3. In the Univision and Telemundo Waiver Order, the Commission relied upon Univision’s
statement that traditional national sales firms lack “the specialized skill and experience required to market
successfully Spanish-language television," and Telemundo’s argument that Spanish-language stations
“cannot themselves effectively secure national spot advertising sales.”7 In the waiver orders granted since
then,8 the Media Bureau relied on similar assertions.9 In each case, the evidence before the Commission
supported the petitioners’ argument that waiver of the network representation rule had been and would be
beneficial to the development of foreign language networks,10 which provide important public benefits,
including “encouraging the growth and development of new networks; fostering foreign-language
programming; increasing programming diversity; [and] strengthening competition among stations.”11
4. Fox contends that, absent grant of a waiver of the network representation rule, MundoFox
and its affiliates would “face a potentially debilitating disadvantage” in competition with existing
Spanish-language broadcast networks and their affiliates, all of which operate without the restrictions of
the network representation rule.12 In particular, Fox argues that any new Spanish-language network must
contend not only with “a market that continues to be dominated by Univision and Telemundo,”13 but also
with English language stations in the same markets that “benefit from substantial economic advantages”
in the ad sales markets.14 Furthermore, Fox argues that grant of the waiver will result in the same public
interest benefits that the Commission found in waiving the rule for other Spanish-language networks.15
Specifically, Fox contends that the waiver will strengthen the network’s chances for long-term success by
allowing it to “to offer affiliates the same full representation package provided by other Spanish-language


6 Id. at 3, n.7. See Amendment of § 73.658(i) of the Commission’s Rules, BC Docket No. 78-309, Report and Order,
5 FCC Rcd 7280 (1990) (Univision and Telemundo Waiver Order) (granting permanent waivers of the rule to
stations affiliated with networks including Univision Communications, Inc. and Telemundo Group, Inc.); Azteca
International Corporation Petition for Waiver of Section 73.658(i) of the Commission’s Rules
, Broadcast Special
Relief Petition BSR-001, Order, 18 FCC Rcd. 10,662 (MB 2003) (Azteca Order) (granting a permanent waiver of
the rule to affiliates of Azteca America); Liberman Television LLC Petition for Waiver of Section 73.658(i) of the
Commission’s Rules
, MB Docket No. 09-192, Order, 25 FCC Rcd. 4725 (MB 2010) (Estrella Order) (granting a
permanent waiver of the rule to affiliates of Estrella); Spanish Broadcasting System, Inc. Petition for Waiver of
Section 73.658(i) of the Commission’s Rules
, MB Docket No. 10-89, Order, 26 FCC Rcd. 16,911 (MB 2011)
(MegaTV Order) (granting a permanent waiver of the rule to affiliates of MegaTV); and Mambo, LLC Petition for
Waiver of Section 73.658(i) of the Commission’s Rules
, MB Docket No. 10-161, Order, 26 FCC Rcd. 16,900 (MB
2011) (GenTV Order) (granting a permanent waiver of the rule to affiliates of GenTV).
7 Univision and Telemundo Waiver Order at 7281.
8 See cases cited at n.6, supra.
9 See Azteca Order at 10663 (Azteca argued that absent national coordination, resources are not available to their
affiliates to market national spot advertising competitively); Estrella Order at 4726 (Liberman argued that “waivers
are still necessary across the Spanish-language broadcasting industry because stations targeting Spanish-speaking
audiences may earn less revenue per viewer than those broadcasting in English); MegaTV Order at 16,912 (SBS
argued that “traditional sales firms lack the necessary market expertise to effectively represent the specific interests
of the Spanish-language market.”); GenTV Order at 16,901 (Mambo contended that “many GenTV affiliates lack
the ‘experience and resources’ to market themselves to advertisers.”).
10 Univision and Telemundo Waiver Order at 7281; Azteca Order at 10663.
11 Estrella Order at 4726 (citing Azteca Order at 10,663).
12 Petition at 2.
13 Id. at 6.
14 Id. at 7.
15 Id at.9-10.
2

Federal Communications Commission

DA 12-744

networks” and thereby avoid a “significant disadvantage in recruiting potential station partners.”16 This
would allow MundoFox to “deliver original Spanish-language programming, much of it never before seen
in the United States . . . and increase the number and variety of Spanish-language public-interest
programming options available.”17 Fox also maintains that there will be no harm to the public interest as
a result of the waiver,18 and that it will increase program diversity and competition in the “Spanish-
language network marketplace.”19 As noted above, all comments we received supported the Petition.
5. For the same reasons the Commission granted waivers to existing Spanish-language
broadcast networks, and in recognition of the competitive imbalance that could result in the absence of a
waiver, the Bureau finds good cause to grant MundoFox-affiliated stations a permanent waiver of the
network representation prohibition in Section 73.658(i) of the Commission’s rules.20
6. Accordingly, IT IS ORDERED that the Petition for Waiver of Section 73.658(i) of the
Commission’s rules filed by Fox Networks Group, Inc. IS GRANTED.
7. This action is taken pursuant to authority delegated by Sections 0.61(h) and 0.283 of the
Commission’s rules, 47 C.FR. §§ 0.61(h), 0.283.
FEDERAL COMMUNICATIONS COMMISSION
William T. Lake
Chief, Media Bureau


16 Id at.13.
17 Id. at 11.
18 Id. at 14.
19 Id. at 11.
20 5 U.S.C, § 553(b)(3)(B). The Commission may waive its rules where good cause is shown. See 47 C.F.R. § 1.3;
Wait Radio v. FCC, 418 F.2d 1153, 1157 (D.C. Cir. 1969).
3

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