Mexico Unveils 'Historic' TV & Telecom Reform Bill

MEXICO CITY -- Mexico on Monday introduced a much-hyped reform bill that vows to open its highly concentrated television and telecom industries to competition. 

President Enrique Pena Nieto, who has called the initiative a top priority of his administration, was on hand to present an outline of the bill at a Mexico City news conference. 

Among the various measures, the bill eliminates a 49 percent limit on foreign ownership in telecom, allowing 100 percent foreign investment.  

The reform also brings about the creation of an autonomous regulator, called the Federal Telecommunications Institute. The agency will oversee the tendering of broadcast licenses for TV and radio, and it will also assume a key regulatory role with powers to impose stiffer fines on Mexico's powerful oligarchs.  

Another new development: Mexico will finally require pay TV operators and broadcast TV networks to comply with must carry/must offer obligations. Mexico's broadcast TV duopoly of Televisa and TV Azteca control about 95 percent of the nation's terrestrial channels and they also own several pay TV outfits. No longer can they deny rival cablers free access to their broadcast TV channels.

Additionally, Mexico is planning to auction two digital TV networks, which would provide sorely needed competition in broadcast TV, though it's not clear when the bidding process will begin. 

Lawmakers on Monday were praising this as a "historic" bill that will transform the TV and telecom industries, yet it remains to be seen what kind of impact all this will have on the dominant players. 

Televisa has said it supports reform that brings competition to broadcasting, though it's hard to imagine that the two networks here will just willingly hand over a piece of their advertising pie in the name of competition.   

As for Telmex, the new rules may in fact allow Mexico's dominant fixed-line phone carrier to enter the pay TV business, so it could actually benefit from the bill. Telmex is owned by Carlos Slim, the world's richest man.