Tue, Mar 12, 2013 - Page 15 News List

Mexico readies bill to reform TV, telecoms business

REGULATOR:The proposal calls for establishing an independent agency that could identify dominant players and break them up to improve competition

Reuters, MEXICO CITY

Mexico’s government was expected to present a bill yesterday that aims to loosen billionaire Carlos Slim’s hold on the telecommunications market and curb top broadcaster Televisa’s rule of the airwaves, a draft copy of the document shows.

The bill would create a new, independent regulator that could designate firms as dominant, impose stiffer penalties and even break companies up to improve competition, the draft obtained by Reuters said.

The planned legislation would also establish specialized competition courts to settle disputes.

Several proposals take aim at the legal maneuvers that Slim, the world’s richest man, has used to skirt fines and requirements to allow competitors cheaper access to his vast network across Latin America’s second-biggest economy.

Mexican President Enrique Pena Nieto’s administration, which took over in December last year, negotiated the bill with a small group of representatives from the top two opposition parties.

He was expected to unveil the bill at an event yesterday.

Slim controls about 70 percent of Mexico’s mobile market and about 80 percent of fixed lines through his phone giant America Movil. Televisa, controlled by media tycoon Emilio Azcarraga, has about 60 percent of the broadcast market.

Their control of respective markets has subjected Mexicans to relatively high prices for services and dragged on the country’s productivity as a whole, economists say.

The bill could face a tough road in the divided Congress, where no party holds a majority.

Opposition lawmakers have expressed concerns that the final draft may not be as radical as long-time advocates of reform have been demanding. If the bill is seen as soft, it could undermine a pact Pena Nieto made with the opposition to pass key energy and tax reforms this year.

“This seems too good to be true,” said one lawmaker involved in the drafting of the bill and who requested anonymity due to the nature of the talks. “The devil will be in the details.”

Under the bill, Slim’s telecoms firms could be defined as dominant market players and be subject to asymmetric regulations that could allow smaller competitors cheaper connection rates, while making his firms pay rivals more.

The agency “will impose limits on national and regional concentration of frequencies,” the document said.

The regulator “will order the divestiture of assets, rights or parts needed to assure the fulfillment of these limits,” it added.

Both Slim and Televisa have been able to use their political influence to hobble previous attempts at reform. Prior to his election victory last year, Pena Nieto’s ties with Televisa led to accusations that he was beholden to the broadcaster.

While the bill could weaken Slim’s hold on the telecommunications market, it could also set the stage for him to enter the pay TV market to face off against Televisa, which also owns major cable and satellite pay TV firms.

Proposals also include allowing foreign companies to wholly own telecoms firms, while boosting the limit on foreign ownership of TV and radio broadcasters from 25 percent to 49 percent.

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