Mexican President Backs Regulator in TV Dispute

By Dow Jones Business News, 
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By Anthony Harrup

MEXICO CITY--Mexican President Enrique Peña Nieto gave his backing Thursday to the country's newly created telecommunications regulator after broadcaster Grupo Televisa SAB legally challenged the regulator's authority to order the free distribution of its channels on pay-television systems.

The Federal Telecommunications Institute, or IFT, sought the intervention of the president after a Mexico City judge notified the institute this week that it doesn't have the power to order the free transmission of Televisa channels, in a case that the broadcaster brought in 2011 against satellite TV competitor Dish Mexico.

Presidential spokesman Eduardo Sánchez said Mr. Peña Nieto decided to take the case to the Supreme Court at the IFT's request, since the free distribution of broadcast channels is a vital element in the telecommunications and media overhaul passed last year.

The Constitution says the IFT, and not a local judge, should decide on transmission of content, Mr. Sanchez said.

The court notification led the IFT on Wednesday to postpone a decision on guidelines for the implementation of so- called "must carry" and "must offer" rules, under which broadcasters must make their channels available free to cable and satellite-TV operators and pay-TV providers must distribute the channels to their customers.

The IFT would be an interested third party in the case between the federal government and the rulings by the judge.

The decision to support the IFT's request, more than a legal statement is a political statement in favor of last year's telecommunications overhaul, said Jorge Negrete, head of consultancy Mediatelecom Policy & Law.

"It's saying to Televisa and those who promoted the ruling that the reform is for real," he added.

A Televisa spokesman said the company had no immediate comment.

Dish Mexico, a joint venture between Mexico'sMVS Comunicaciones and EchoStar Corp. of the U.S., said Thursday it will call on the IFT to continue working on the "must carry" and "must offer" rules.

Dish Mexico, which has around 2.5 million satellite TV subscribers, competes directly with Televisa's Sky Mexico satellite service. Televisa is the country's biggest broadcaster, and the leading pay-television provider with satellite and cable operations.

Dish last year began carrying channels of Televisa and the country's No. 2 broadcaster TV Azteca on grounds that the constitutional amendment allowed it.

The IFT was created last year under a telecommunications overhaul aimed at increasing competition in the country's telecommunications and broadcast markets. It has the power to determine dominant companies--specified as those with market shares above 50%--and to set measures to establish competitiveness. Measures could include special rules to curtail the advantages of dominant players--even forced asset sales if deemed necessary.

Televisa, along with billionaire Carlos Slim's telecommunications company America Movil SAB, are being investigated for dominance in their respective markets by the IFT.

Write to Anthony Harrup at

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Referenced Stocks: SATS , TV

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