Photo credit: The power of television by Clemens v. Vogelsang
A couple of weeks ago, I wrote about the titanic tasks that the Mexican telecom regulator had to achieve according to the recent constitutional telecom reform. One of those tasks was to declare preponderant operators for telecom and broadcasting, and imposing asymmetric regulation or ordering separation and/or disinvesting. Despite the markets were nervous, the later did not happen. Televisa, Telmex, and many of their strategic partners, are on two legs, with regulation, but on two legs.
The asymmetric regulation cover many aspects in detail, so I plan to write about consequences and opportunities later in many posts. Nevertheless, here is a nutshell summary of what was resolved, and that took affects last March 21:
1. Televisa, some of its subsidiaries, re-broadcasters and partners, were declared preponderant, and subject to the regulation (jointly Televisa).
2. Televisa must have a public offer to allow broadcasters access to passive infrastructure under the principles of no discrimination and no exclusivity.
3. Public offer will cover every new civil construction.
4. Televisa cannot acquire relevant content on an exclusive basis. Televisa cannot join buyer´s clubs. IFT will determine what content must be considered relevant by May 31, 2014, and every two years thereafter.
5. Televisa must offers its channels to competitors of other technologies operators (CATV, VOD, etc.)
6. Televisa cannot invest on Telmex, or have shared directors or high executives.
7. IFT will review and revise the regulation every two years, and could apply, as necessary, functional or structural separation, disinvesting of assets.
1. Telmex and some of its subsidiaries and partners, were declared preponderant, and subject to the regulation (jointly Telmex).
2. In mobiles, Telmex is bound to interconnect, sell capacity and render transport and termination of calls, as well as co-location. This includes access to passive wholesale and MVNO.
3. In mobiles, Telmex is bound to provide tariff information to end-users, customer service, unblocking of phones and elimination of national roaming. Exclusive agreements for distributing mobile phones cannot be longer than 6 months.
4. In fixed service, Telmex is bound to render interconnection, allow passive infrastructure, co-location and transport. Telmex must guarantee minimum speeds and delivery times for T1s and other connections.
5. In mobiles and fixed service, Telmex must allow access to any content/service/app.
6. In mobiles and fixed service, must have a public offer to allow access to passive infrastructure under the principles of no discrimination and no exclusivity. Public offer will cover every new civil construction.
7. Telmex must unbundle its local loop.
8. Telmex cannot acquire relevant content on an exclusive basis. IFT will determine what content must be considered relevant by May 31, 2014, and every two years thereafter.
9. Telmex cannot invest on Televisa, or have shared directors or high executives.
10. IFT will review and revise the regulation every two years, and could apply, as necessary, functional or structural separation, disinvesting of assets.
The analysis of the legal process deserves another post, as IFT has a complex dual function as regulator and competition authority, and therefore is subject to two different process laws that requires surgeon hand to operate. It also would requiere STEM lawyer skills to make a successful challenge.
This is a new beginning for the Mexican telecom industry, but it is a good start for planning telecom business strategies.
Do you think this was enough, or something essential was left out? Let me know.
Clock is ticking on IFETEL, the new telecom regulator. According to the telecom reform, It needs to comply with five big challenges by this Sunday, March 9, 2014.
1. It will publish the Tender Rules for two new TV networks with national coverage. This Tender will exclude current broadcasters (TV and radio) who own 12 MHz in any of the zones of coverage.
2. It will declare preponderant operators in broadcasting and telecommunications, and will impose regulation in relation to information, offers and quality of services, exclusive agreements, limitations to the use of terminal equipments between networks, assymetic regulation on tariffs and infrastructure, unbundling of essential resources, and accounting, functional and structural separation.
3. It will order the unbundling of the local loop for preponderant operators and dominant players with substantial power.
4. It will verify all telecom concessions to validate compliance to all terms and conditions.
5. It will gather information and integrate the Public Registry of Telecom Concessions.
Easier said than done. Now you may add that telecom bill is not yet presented to the Congress for discussion and approval, which increases the decree of dificulty, as IFETEL needs to carry on new proceedings and enfoce new authorities using current law and telecom reform. It is a STEM lawyers cue in.
IFETEL is under the spotlight right now and carries the weight of heavens on its shoulders. Do you think it will succeed?
Photo credit: christmas by Joe Buckingham
Christmas wish list of many had the enacting of Mexican telecom legislation on time (December 9, 2013). By now, we know for sure that the Congress missed that important date set in the transitory articles of the Telecom Reform. The legislation is in discussion and could be approved by Q1 2014.
So what are the legal consequences for the Congress or the market to miss that date? NONE, but provides some time for interested parties to revisit their strategies.
The Congress still has constitutional authority to enact telecom laws, the transitory articles are substantially in force, the foreign investment caps are still increased, TelecomMexico has a license and the backbone tender is on its way, the must-carry/must-offer is in process of being implemented by IFETEL, as well as the relevant player rule and the unbundling of local loop.
Have a wonderful holiday season. So don´t worry and have some family time, as telecom market will still be there when you return.
Ibope chooses a group of homes at random to represent the population to obtain data on TV viewers to later report to broadcasters. As reported by Mexican business journal “El Economista“, TV Azteca, second largest broadcasting corporation in Mexico, sued Ibope over the validity of rating results. TV Azteca decided not to bill advertising to its clients based on ratings in the future.
Mexico will finish its migration to digital free-to-air TV by December 31, 2015. This change offers an exclusive opportunity for rating companies to penetrate not a “representative population”, but to collect real-time data of preferences from all viewers. “Peoplemeters” provided by companies like Ibope, certainly could be replaced by either “tuned” digital converters or apps for Smart TVs, as long as privacy rules are complied.
Now, considering that telecom operators are forced by law to must-carry and must-offer (with some exceptions) content broadcasted by TV operators, the spot prices will have more value, as the reach has been expanded beyond its original network. Big data analytics will play a key role in pricing and marketing for telecom companies under this rule.
On the other hand, Article 6 of Mexican Constitution protects the rights of the audience. It is still uncertain how telecom law would regulate (or not) the plurality of content in broadcasting and CATV. It is also uncertain if broadcasters will be forced to program “cultural” content and the rules for considering it as such. However, as TV is becoming more interactive, the right of the audience could be implemented with technical solutions as VOD, PPV or collective interaction of viewers (i.e. through social networks, etc.)
By March 9, 2014, Ifetel, Mexican telecom regulator, must determine which telecom operators are relevant to the market and impose asymmetric regulation or even functional, accounting or structural separation. For the purposes of the Reform, a relevant operator is the one holding more than 50% in a given relevant market, using metrics of Ifetel for calculating users, subscribers, audience, network traffic or used capacity. In this regard, big data metrics will play essential role for backing up either ruling.
While many parts of telecom regulation are still up in the air in the Congress, the truth is that big data tools are needed for implementing the Reform. Do you have any other unseen opportunity? Let me know.
Photo credit: Fiber Optic Ends by Barta IV
It took over 10 years to Comisión Federal de Electricidad (CFE), Government company of power distribution, to deploy 15,000 miles of optic fibre inside its infrastructure. On 2010, CFE granted under lease a minor portion of the backbone to a JV formed of Telefónica-Televisa-Megacable, through a public tender.
At the begining of the current Administration, it was announced that Telecommuncaciones de México (TelecomMexico), the state-owned company operating satellite services, money wires and telegraphy, will receive ownership of this backbone, as it was in the process of getting a telecom license.
However, this plan had a twist and Ministry of Communications just announed that CFE will pass to TelecomMexico to co-operate with private operator through a PPP, but only for wholesale.
As IFETEL, with current antitrust telecom authority, shall oversee the process, and decide who is elegible for participating into the tender. It appears to offer a clear window of opportunity for new entrants. Why? Because current players could have a severe scrutiny and/or assimetric regulation, based on their possible conflicts of interest while serving capacity to rivals. That is a clear cue for a pitch.