Last week IFT, telecom antitrust and regulator in Mexico, issued a resolution declaring that Televisa is not dominant in paidTV. The resolution was controversial to many, of course. However, it threw some legal precedents on OTT, for subscription video-on-demand (SVOD).
According to IFT, SVOD is not, in terms of relevant market for antitrust proceedings, substitute to paid TV, based on the facts that content is not enough, the audience is limited and internet access is not universal.
Netflix is betting high on good original content, but live sports and prime time is still keep audience on traditional TV, according to official data form IFT. However in OTT-SVOD, Netflix has 55.7% of Mexican market, with Slim´s Claro following with 39.7%, according to Daxis. Audience is expected to grow with 4G mobile tenders happening this year.
Then, if you double-read the resolution from a telecom-media-antitrust-legal-regulatory point of view: This resolution is a space of freedom that Netflix can enjoy to grow. A victory that Uber, another icon of on-demand services, only can wish for its own market.
The Netflix app is displayed alongside other streaming media services on the homepage of a Roku Streaming Stick. (Photo credit: Matthew Keys / Flickr Creative Commons
IFT started a process to declare which telecom operators are preponderant and could be subject to assymetric regulation or de-invest rulings.
Recently, Telmex announced a spin-off of some real estate and leasing corporations.
A Televisa subsidiary, obtained an injunction from a Federal judge to stop the spin-off, as it considers it is a maneuver to evade the preponderance rule, supposedly to be issued by IFT next March 9.
MVS (Dish Mexico) requested IFT to declare Televisa preponderant player in TV and CATV markets, which in turn, is a partner to TV Azteca in mobile operator Iusacell.
Soon, IFT is expected to issue a ruling on must carry – must offer on TV contents (MC-MO)
Dish Mexico has been re-broadcasting in CATV the Free-to-air signal of Televisa and TV Azteca, under a transitory article of the Constitutional Reform in telecom.
For some years now, Dish Mexico, has is force a billing and collection contract with Telmex for managing subscriptions of CATV.
So, TV Azteca requested IFT to declare that Dish Mexico is preponderant and is not eligible to free TV content for re-broadcasting in CATV.
Now, Televisa presented an injuction before a local judge to order IFT to stop the MC-MO discussion. IFT already stopped the public discussion on this, until its in-house analyzes the extent of it.
General Counsel to the President announced that will take this injunction to the Supreme Court.
This happens while the Congress is getting ready to receive the new telecom bill for discussion. Apparently next week.
Mexican telecom industry could seem very hostile to outsiders. However, all of them are bound by interconnection and open infrastructure obligations.
You, know what they say: You do not choose your domestic co-operators in a public network. Their reactions are just tough love on-court and off-court.
So, the only way to get through this is to understand that the new economy is collaborative. After all, everything converges to a 1 and 0.
And you? How are you spending this day?
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.
This document describes the caps and foreign investment regulation for diverse activities and industries under Mexican Law. As always, this is for informative purposes and cannot be considered as substitute for a legal advice. Learn more.
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Photo credit: VIA Telecom Booth by VIA Gallery
Maybe you have been following my latest posts on the approval process for amending the Mexican Constitution in relation to Telecom (and anti-trust). If not, I suggest you read How I Learned to Stop Worrying about Telecom and Love the Pact or Don´t Panic: The First-Mover Guide to the New Mexican Telecom Bill.
House of Representatives delivered the Bill with amendments to the Senate for second time, and Senate will vote minor revisions by April 30, 2013. If approved, it will go for approval to all 31 States of Mexican Republic. A minimum of 16 States will be required, and then Congress will declare the Constitutional Amendment going for publishing at the Federal Official Gazette.
Along will come secondary laws and regulations to update the regulatory framework and catch up with new technologies, which is expected to happen during next 6 months. This is the major overhaul on telecom regulation since early 1990´s, when Telmex was privatised and a Telecom Law was published for first time.
However, while our eyes are all over the Telecom Bill, there are other events shaping already the telecom industry like:
1. MVS is got a major victory at the Supreme Court versus recall of spectrum for 2.5 GHz band. Mexican Government, must likely, will negotiate a license to use a part of this band to MVS. Could MVS pitch Intel and Clearwire to launch its broadband project?
2. Digital TV is arriving earlier to Tijuana (May 28). While this will not move the calendar for other cities, it will certainly be an incentive for independent producers of HD content to hurry up. Also, a part of 700 MHz band will be recovered.
3. Comisión Federal de Telecomunicaciones (COFETEL) started public consultation on satellite services. Mexico has already launched Satellite “Bicentenario” last December 19, to become first of three satellites in the MexSat Fleet. Connectivity is on the rise.
4. COFETEL is retaking the project for consolidating 397 long-distance areas to 173. While this will hit the long-distance business, it will certainly open opportunities for local services.
5. COFETEL has finished the process for approving the Regulations for the Telecom Registry. These Regulations will simplify the process for acts to be registered (i.e. tariffs).
6. The Service Level Interconnection Agreement is in process of being discussed and approved. The approval will mean certainty for new entrants to the market.
Mexican telecom industry grew 15.1% during 2012 (in relation to 2011), so I am thrilled to see how these Reform and secondary regulation will soar this growth. How about you? Let me know what you think.