**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

In the matter of )

)

Azteca International Corporation ) BSR-001

)

(Azteca America) )

)

Petition for Waiver of Section 73.658(i) )

)

of the Commission's Rules )

**ORDER**

**Adopted: May 23, 2003 Released: May 27, 2003**

By the Chief, Media Bureau:

1.  Azteca International Corporation ("Azteca America") filed a petition
    for waiver of Section 73.658(i) of the Commission's rules
    ("Petition"),[^1] which prohibits network organizations from
    representing affiliated broadcast stations in the spot sales
    television advertising market.[^2] Pappas Telecasting filed an
    Opposition to the Petition.[^3] Azteca America replied to the
    Opposition[^4] and Pappas Telecasting later withdrew its
    Opposition;[^5] the Petition, therefore, is unopposed. For the
    reasons outlined below, the Bureau grants the Petition for
    Waiver.[^6]

2.  In its Petition, Azteca America states that it is a new
    Spanish-language national broadcast television network that is
    designed to serve the rapidly growing U.S. Hispanic community.[^7]
    Azteca America contends that waiver of the network representation
    rule is necessary to ensure a level playing field in the U.S.
    Spanish-language broadcast television market because the Commission
    previously granted permanent waivers of the rule ("*Waiver
    Order"*)[^8] to two competing Spanish-language networks, Univision
    Communication, Inc. ("Univision") and Telemundo Group, Inc.
    ("Telemundo").[^9] At the time of that proceeding, Univision and
    Telemundo were operating under temporary waivers of the rule.[^10]

3.  In the *Waiver Order* proceeding, Univision stated that traditional
    national sales firms lack "the specialized skill and experience
    required to market successfully Spanish-language television,\" and
    Telemundo, among other things, stated that Spanish-language stations
    "cannot themselves effectively secure national spot advertising
    sales."[^11] The Commission concluded in the *Waiver Order* that
    "\[b\]ased on over a decade of experience in observing the
    consequences of our initial waiver to Univison and overall record
    herein, it appears clear to us that had we not waived the network
    representation rule in 1978, the development of the above referenced
    new foreign-language programming services would have been hampered,
    if not stifled completely, an outcome clearly inconsistent with the
    public interest."[^12] The Commission also stated that "the record
    evidence in this proceeding shows that the waivers granted to both
    Univision and Telemundo continue to provide additional benefits in
    that they further several of the Commission's longstanding goals:
    encouraging the growth and development of new networks; fostering
    foreign-language programming; increasing programming diversity;
    strengthening competition among stations; and fostering a
    competitive UHF service."[^13]

4.  Azteca America contends that its station affiliates suffer from the
    same competitive handicaps that were found to justify waivers of the
    rule for Univision and Telemundo. Specifically, Azteca America
    contends that the resources are not otherwise available to its
    affiliates to market national spot advertising competitively.[^14]
    Azteca America also states that, as of March 6, 2002, Univision and
    Telemundo "control approximately 95 percent of the U.S. Hispanic
    broadcast television market," and that "\[i\]n order to compete
    effectively with Univision and Telemundo affiliates for national
    spot advertising, Azteca America and its affiliates must be able to
    operate unconstrained by a rule that does not apply to their
    established competitors."[^15]

5.  For the same reasons the Commission granted waivers to Univision and
    Telemundo, the Bureau finds good cause to grant Azteca America a
    permanent waiver of the network representation prohibition in
    Section 73.658(i) of the Commission's rules.[^16]

6.  Accordingly, IT IS ORDERED that the Petition for Waiver of Section
    73.658(i) of the Commission's rules filed by Azteca International
    Corporation IS GRANTED.

7.  IT IS FURTHERED ORDERED that the Petition for a Temporary Waiver of
    the rule filed by Azteca International Corporation IS DISMISSED.

8.  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

    W. Kenneth Ferree

Chief, Media Bureau

[^1]: Petition for Waiver ("Petition") (filed Mar. 6, 2003). The Bureau
    released a Public Notice in which it sought comment on the Petition.
    *Public Notice*, Petition for Special Relief Seeking a Waiver of
    Section 73.658(i) of the Commission's Rules, BSR-001, DA 02-913
    (rel. Apr. 19, 2002). On April 24, 2002, Azteca America filed a
    petition for temporary waiver.

[^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]: Opposition to Petition for Waiver of Pappas Telecasting of
    Southern California, LLC and Pappas Telecasting of Nevada, a
    California Limited Partnership ("Pappas Telecasting") ("Opposition")
    (filed May 9, 2002).

[^4]: Reply to Opposition to Petition for Waiver ("Reply") (filed May
    20, 2002).

[^5]: Letter to Kenneth Ferree, Chief, Media Bureau, Federal
    Communications Commission, from Harry J. Pappas, Pappas Telecasting
    Companies (filed Feb. 13, 2003).

[^6]: In light of our ruling granting the Petition, it is unnecessary
    the address the petition for temporary waiver.

[^7]: Azteca America states that it is a wholly-owned subsidiary of TV
    Azteca, S.A. de C.V., the second largest broadcast television
    network in Mexico. Petition at 2, n. 3.

[^8]: Amendment of § 73.658(i) of the Commission's Rules, 5 FCC Rcd 7280
    (1990) ("*Waiver Order*").

[^9]: Petition at 1-2.

[^10]: Univision and Telemundo were granted temporary waivers of the
    rule in 1978 and 1987, respectively. *Waiver Order*, 5 FCC Rcd at
    7281-82.

[^11]: *Id.* at 7281.

[^12]: *Id.*

[^13]: *Id*. at 7281-82.

[^14]: Petition at 7.

[^15]: *Id*. at 4.

[^16]: 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).