Business

Mexican regulator deals blow to dominant TV, telephone firms

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MEXICO CITY — A Mexican regulatory agency has ordered the massive companies that dominate this nation's telephone and broadcast television sectors to share their network infrastructure with competitors, a move that could seriously alter Mexico's telecommunications landscape in the months and years to come.

The rulings by the Federal Telecommunications Institute appeared to be a "step in the right direction" for the Mexican economy, said George W. Grayson, a Mexico specialist at the College of William and Mary.

Concentrated media ownership and weak regulations have resulted in high prices, low infrastructure investment and some of the lowest cellphone, landline and broadband subscriber rates among the 34 countries in the Organization for Economic Cooperation and Development, according to a study published by the group in 2012.

"You can't really expect to attract major investors if you've got an extremely convoluted telecommunications system," Grayson said. "It's just part of being in the modern world."

The separate rulings were issued against TV network giant Televisa and America Movil — the company controlled by billionaire Carlos Slim and whose subsidiaries, Telmex and Telcel, dominate the fixed-line and mobile telephone markets, respectively. Televisa commands about 70% of Mexican broadcast TV viewership, and Telmex and Telcel each represent more than 70% of their respective sectors.

The reforms to Televisa could have a serious effect on national politics. The network's news programs have long been accused of exhibiting a bias in favor of President Enrique Peña Nieto's Institutional Revolutionary Party, or PRI. When Peña Nieto was elected president in 2012, hundreds of thousands of protesters took to the streets, alleging, among other things, that the network's pro-Peña coverage had fundamentally corrupted the democratic process.

Peña Nieto and the PRI supported the telecommunications reform law last year, perhaps as a way to show that they did not owe Televisa any favors.

Whether or not Televisa produced biased news coverage, it indisputably wields enormous power, attracting 70% of Mexico's broadcast television viewers, a reality that the telecommunications institute appears eager to shatter. The agency also announced Friday that it had set in motion plans for the creation of two new national broadcast TV networks to compete with Televisa.

In addition, the agency banned Televisa from acquiring exclusive broadcast rights to programs with "unique characteristics that in the past have generated high levels of national or regional audiences," including the Olympic Games and soccer playoffs, according to a statement that Televisa filed Friday with the Mexican stock market.

Purificacion Carpinteyro, a federal congresswoman for the left-wing Party of the Democratic Revolution, or PRD, said that Televisa will now be forced to share the TV towers it has strategically located on hilltops across Mexico with competing companies that might want to broadcast new kinds of content. That, she said, could create new opportunities for independent Mexican production companies. In addition, she said, the new rules may also widen the spectrum of political content available to TV viewers.

"Televisa has been ruling the conscience of the Mexican population ever since the 1970s, when TV sets became more prevalent," she said, adding that many voters prefer here not to read newspapers or seek out the news from other media. "So Televisa is pretty much a Big Brother telling them what to think, and about how to act, what is beautiful and what is ugly."

Televisa has the right to challenge the decision, but the regulator's decisions would remain in effect while the courts decide the case, financial analyst Jose Yuste said in a radio interview Friday.

richard.fausset@latimes.com

Times staff writers Meg James, and Cecilia Sanchez of the Mexico City bureau contributed to this report.

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