Mexico gives cell frequencies to television giant
By MARK STEVENSON, Associated Press Writer
Tuesday, August 17, 2010
(08-17) 13:53 PDT MEXICO CITY, Mexico (AP) --
Mexican officials trying to dilute a near-monopoly on cell phone services have awarded valuable frequencies to a company that holds a near-monopoly in broadcast television.
Government regulators say the new radio wave concessions approved Monday by the Federal Telecommunications Commission will provide more competition for the phone empire built by the world's richest man, Carlos Slim, whose companies control 73 percent of Mexico's cell market.
Critics of the deal alleged Tuesday that the process appeared to favor a consortium headed by Grupo Televisa, which controls about 70 percent of Mexico's broadcast television audience.
"This only confirms the hypothesis that the commissioners and president of the regulatory agency have a boss: the monopolies," said Oscar Romero of El Barzon, an activist group for consumers and debtors.
The government ruled almost all of Televisa's potential competitors out of the bidding and disqualified the remaining bidder. The Telecommunications Commission defended the unopposed auction, saying it will still create a more equitable distribution of frequencies:
"It meets the need of modifying our country's highly concentrated market structure," the commission said in a news release.
Government rules prevented bidders who already controlled significant chunks of cellular frequency from participating in the bidding — ruling out most potential competitors against Televisa SA de CV and its partner, Comunicaciones Nextel de Mexico SA de CV.
Officials then accepted a Televisa-Nextel bid with a much lower upfront payment than that offered by other companies in similar auctions. Looking at the entire payment over the 20-year life of the concession, the consortium acknowledged it got a slightly lower total price than offered by competitors. It will pay a total $1.45 billion over the whole period.
"We were left alone in that band to bid against ourselves," Nextel Mexico President Peter Foyo said, noting that "this could have been much, much more money if we had had competitors."
Foyo said the process "was done fair and square."
"Obviously, you're going to have one more competitor out there" for Slim's company, he noted, "whereby consumers are going to have one more choice, and by Charles Darwin's way of thinking, we're going to get our consumer better prices and service."
The Federal Competition Commission earlier said it accepted the low price because the priority was getting more competitors into the market, not getting the most money from bidders.
Foyo said the frequencies would be used for voice and data 3G cell service, and possibly to carry Televisa programming.
Some critics say the decision undermines the government's claim it is battling monopolies.
"I think the outcry that giving it to Televisa has raised is because it just doesn't make sense ... when you say you are trying to fight monopolies all over, and then you take one of the biggest monopolies or duopolies and you just give it more power," said Jonathan Heath, an independent Mexico City-based economist.
In a country where sectors like telecommunications, television, cement, grains and banking are dominated by a limited number of huge companies, some experts say there is some logic to promoting competition by getting powerful forces from one industry to invade another tycoon's territory.
"It is almost a matter of religious doctrine, that a duopoly (in which two businesses control an industry) is better than a monopoly," said Federico Estevez, a political science professor at Mexico's Autonomous Technological Institute.
Mexico anti-monopoly commission provided a hint that Slim's telephone empire might soon get the chance it has long sought to enter Televisa's home turf, broadcasting.
"The commission stresses the need to auction off its frequencies as soon as possible, and also assign permits for a third television broadcast network," it said.
That was widely interpreted as a signal to Slim.
"It is going to go to Slim, that's clear," Estevez said. "Who else is going to be able to pay for it?"
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MEXICANOCCUPATION.blogspot.com
EXPORTING POVERTY... we take MEXICO'S 38 million poor, illiterate, criminal and frequently pregnant
........ where can we send AMERICA'S poor?
The Mexican Invasion................................................
Mexico prefers to export its poor, not uplift them
March 30, 2006 edition
http://www.csmonitor.com/2006/0330/p09s02-coop.html
Mexico prefers to export its poor, not uplift them
At this week's summit, failed reforms under Fox should be the issue, not US actions.
By George W. Grayson WILLIAMSBURG, VA.
At the parleys this week with his US and Canadian counterparts in Cancún, Mexican President Vicente Fox will press for more opportunities for his countrymen north of the Rio Grande. Specifically, he will argue for additional visas for Mexicans to enter the United States and Canada, the expansion of guest-worker schemes, and the "regularization" of illegal immigrants who reside throughout the continent. In a recent interview with CNN, the Mexican chief executive excoriated as "undemocratic" the extension of a wall on the US-Mexico border and called for the "orderly, safe, and legal" northbound flow of Mexicans, many of whom come from his home state of Guanajuato. Mexican legislators share Mr. Fox's goals. Silvia Hernández Enriquez, head of the Senate Committee on Foreign Relations for North America, recently emphasized that the solution to the "structural phenomenon" of unlawful migration lies not with "walls or militarization" but with "understanding, cooperation, and joint responsibility." Such rhetoric would be more convincing if Mexican officials were making a good faith effort to uplift the 50 percent of their 106 million people who live in poverty. To his credit, Fox's "Opportunities" initiative has improved slightly the plight of the poorest of the poor. Still, neither he nor Mexico's lawmakers have advanced measures that would spur sustained growth, improve the quality of the workforce, curb unemployment, and obviate the flight of Mexicans abroad. Indeed, Mexico's leaders have turned hypocrisy from an art form into an exact science as they shirk their obligations to fellow citizens, while decrying efforts by the US senators and representatives to crack down on illegal immigration at the border and the workplace. What are some examples of this failure of responsibility? • When oil revenues are excluded, Mexico raises the equivalent of only 9 percent of its gross domestic product in taxes - a figure roughly equivalent to that of Haiti and far below the level of major Latin American nations. Not only is Mexico's collection rate ridiculously low, its fiscal regime is riddled with loopholes and exemptions, giving rise to widespread evasion. Congress has rebuffed efforts to reform the system. Insufficient revenues mean that Mexico spends relatively little on two key elements of social mobility: Education commands just 5.3 percent of its GDP and healthcare only 6.10 percent, according to the World Bank's last comparative study. • A venal, "come-back-tomorrow" bureaucracy explains the 58 days it takes to open a business in Mexico compared with three days in Canada, five days in the US, nine days in Jamaica, and 27 days in Chile. Mexico's private sector estimates that 34 percent of the firms in the country made "extra official" payments to functionaries and legislators in 2004. These bribes totaled $11.2 billion and equaled 12 percent of GDP. • Transparency International, a nongovernmental organization, placed Mexico in a tie with Ghana, Panama, Peru, and Turkey for 65th among 158 countries surveyed for corruption. • Economic competition is constrained by the presence of inefficient, overstaffed state oil and electricity monopolies, as well as a small number of private corporations - closely linked to government big shots - that control telecommunications, television, food processing, transportation, construction, and cement. Politicians who talk about, much less propose, trust-busting measures are as rare as a snowfall in the Sonoran Desert. Geography, self-interests, and humanitarian concerns require North America's neighbors to cooperate on myriad issues, not the least of which is immigration. However, Mexico's power brokers have failed to make the difficult decisions necessary to use their nation's bountiful wealth to benefit the masses. Washington and Ottawa have every right to insist that Mexico's pampered elite act responsibly, rather than expecting US and Canadian taxpayers to shoulder burdens Mexico should assume.
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