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MegaTV Petition for Waiver of Network Representation Rule

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Released: December 20, 2011

Federal Communications Commission

DA 11-2041

Before the

Federal Communications Commission

Washington, D.C. 20554

In the matter of
)
)
Spanish Broadcasting System, Inc.
)
MB Docket No. 10-89
(MegaTV)
)
)
Petition for Waiver of Section 73.658(i)
)
of the Commission’s Rules
)

ORDER

Adopted: December 19, 2011

Released: December 20, 2011

By the Chief, Media Bureau:
1. Spanish Broadcasting System, Inc. (“SBS”) filed a petition 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.3 For the reasons outlined below, the Bureau grants the Petition for Waiver.
2. In the Petition, SBS states that it is in the process of assembling affiliates nationally to air the
content of a “relatively new” Spanish-language video programming service (MegaTV).4 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.5 Furthermore, SBS argues that the waiver is
necessary to ensure a level playing field by holding SBS to the same regulatory requirements of its
established competitors6 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 national


1 Spanish Broadcasting System, Inc. Petition for Waiver of Section 73.658(i) of the Commission’s Rules with
Respect to Network Representation
at 1 (filed April 14, 2010) (Petition). The Bureau released a Public Notice in
which it sought comment on the Petition; there were no comments or replies filed. Public Notice, Comment Dates
Established for MegaTV Petition for Waiver of 47 C.F.R. § 73.658(i), the Network Representation Rule, MB
Docket No. 10-89, DA 10-775 (rel. May 6, 2010).
2 We have considered SBS’s Petition to be a request for waiver of the network representation rule on behalf of any
MegaTV-affiliated broadcast station, but only as it applies to representation by MegaTV. 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 Petitioner filed comments on July 7, 2010, noting the Bureau’s grant of a similar waiver in the Estrella Order.
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).
4 Petition at 4.
5 Petition at 1-2.
6 Competing networks include Univision, Telemundo and Azteca. Id. at 5.

Federal Communications Commission

DA 11-2041

Spanish-language networks.7
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.”8 In the Azteca Order, the Media
Bureau relied on Azteca’s similar assertion that, absent national coordination, resources are not available
to its affiliates to market national spot advertising competitively.9 In the Estrella Order, the Media
Bureau relied on Liberman’s contention that without national coordination discrepancies will persist
between English and Spanish-language broadcasts in terms of attainable revenue per viewer.10 In all three
cases, 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,11
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.”12
4. SBS contends that granting MegaTV a waiver of the network representation rule is essential
if its affiliates are to compete effectively with affiliates of the “existing, well-established Spanish-
language networks,” which operate without the restrictions of the network representation rule.13 In
particular, SBS identifies network sales representation as essential for “niche networks” because
traditional sales firms lack the necessary market expertise to effectively represent the specific interests of
the Spanish-language market.14 Furthermore, SBS argues that grant of the waiver to MegaTV will result
in the same broad benefits that the Commission found in waiving the rule for other Spanish-language
networks.15 Specifically, SBS contends that the waiver will strengthen the network’s chances for long-
term success as an effective competitor to established Spanish-language networks while increasing the
availability of Spanish-language programming (including original programming).16 SBS also maintains
that there will be no harms to the public interest as a result of the waiver, and that it will increase program
diversity and competition in the marketplace.17 As noted above, we received no oppositions to the
Petition.
5. For the same reasons the Commission granted waivers to Univision, Telemundo, Azteca


7 Id. at 2. 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
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. 10662 (MB 2003) (Azteca Order) (granting a permanent waiver of the rule to Azteca America);
Estrella Order (granting a permanent waiver of the rule to Estrella TV).
8 Waiver Order at 7281.
9 Azteca Order at 10663.
10 Estrella Order at 2.
11 Waiver Order at 7281; Azteca Order at 10663.
12 Estrella Order at 2 (citing Azteca Order at 10663).
13 Id. at 5.
14 Id. at 8.
15 Id at.8-9.
16 Id. at 9.
17 Id. at 10.
2

Federal Communications Commission

DA 11-2041

America, and Liberman Television LLC, and in recognition of the competitive imbalance that could result
in the absence of a waiver, the Bureau finds good cause to grant MegaTV a permanent waiver of the
network representation prohibition in Section 73.658(i) of the Commission’s rules.18
6. Accordingly, IT IS ORDERED that the Petition for Waiver of Section 73.658(i) of the
Commission’s rules filed by Spanish Broadcasting System, 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


18 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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