Fox’s Live NFL Telecasts May Violate FCC, Trade Rules : Television: At issue is the network’s feeding of the games to Mexican stations, which rebroadcast into U.S.

As the National Football League tries to build an international audience for the game, federal regulators are reviewing whether the Fox Television network is violating federal law by providing three Mexican TV stations with live NFL telecasts.

At issue is whether the three stations along the U.S.-Mexico border are violating Federal Communications Commission rules as well as the North American Free Trade Agreement by broadcasting American programming into the United States in competition with U.S. stations.

The federal courts and the FCC have previously determined that a similar affiliation agreement with one of the Mexican TV stations was illegal. But a Fox lawyer contends that NAFTA changes the rules.

If the FCC blocks the affiliation agreements, densely populated stretches of Southern California--including 940,000 TV households in San Diego alone--would not be able to see National Conference football games.

“A lot is at stake” for Fox and the NFL, acknowledged William J. Potts Jr., a Washington communications lawyer who represents Fox in the matter.

The network is already under FCC scrutiny for possible violation of federal laws prohibiting foreign companies from owning U.S. broadcast stations. That examination, which began in spring, focuses on who owns six big-city television stations purchased in 1985 to form the core of the fledgling Fox network: Rupert Murdoch, a naturalized U.S. citizen, or News Corp., the Australian company Murdoch runs.

The latest FCC inquiry into the NFL broadcasts was triggered after Fox filed an application with the agency in February to transmit its programming directly by satellite to XETV-TV in Tijuana. The owners of nearby KUSI-TV, a low-powered TV station in San Diego that broadcasts a mix of news and syndicated programming, objected to the arrangement.

The FCC has given Fox and Murdoch temporary authority to continue their arrangement with XETV-TV and two other stations, XHNUL-TV in Nuevo Laredo near Laredo, Tex., and XHRTA-TV in Reynosa Matamoros outside of Brownsville, Tex. But FCC general counsel William Kennard said the agency expects to issue a decision on the arrangement next month, the start of the NFL season.

Fox paid a breathtaking $1.58 billion for four-year broadcast rights to National Conference football games in an effort to broaden the audience for its network programs, which include such hits as “The Simpsons” and “Beverly Hills, 90210.” The NFL, too, has been seeking more fans by holding preseason and other special games overseas, most recently in Barcelona, Spain, and Mexico City.

NFL officials were en route to their offices Tuesday from Mexico City and could not be reached for comment.

XETV in Tijuana, which is owned by Televisora de Calimex, had not previously sought FCC approval for its Fox broadcasts because Fox recorded its satellite signal in San Diego and trucked tapes of its broadcasts to Tijuana to be broadcast by XETV on a delayed basis, thereby circumventing U.S. law. But with live football games, such an arrangement was not feasible.

“KUSI is opposed to (Fox’s) application because that station has a track record of being a network affiliate, (yet) to the best of my knowledge they do no news or public affairs programming” for viewers, as U.S. stations are required to do under federal law, said Robert B. Jacobi, a Washington attorney who represents KUSI.

Jacobi said the FCC has “the right to review and consider what the (Tijuana) station is doing for the American community.”

In 1972, the U.S. Court of Appeals in Washington upheld an FCC ruling that struck down a similar affiliation agreement between the ABC Television network and XETV. But Fox’s lawyer Potts contends the case “is no longer the law because we now have NAFTA.”

An FCC official said NAFTA indeed casts a novel twist on Fox’s affiliation arrangement with the Mexican TV stations. Legal experts say the accord neither endorses nor outlaws the practice and that the main issue is avoiding transmission interference with U.S. stations.

“The United States . . . will not consider the nationality of the affected stations for the purpose of favoring a U.S. station that is competing with a Mexican station for affiliation with a U.S. programmer,” the treaty states.

“This is a new legal issue because we haven’t considered the kinds of standards that NAFTA imposes on us,” said Abbie Baynes, FCC special assistant to the general counsel.