Televisa and Telmex on two legs after Watchdog resolutions

Televisa and Telmex on two legs after Watchdog resolutions

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:

Televisa
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.

Telmex
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.

m4s0n501
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