The failure and success of the structural reform of telecommunications and radio broadcasting in Mexico

What happened? Why couldn’t or wouldn’t Mexico radically modify the status quo of radio transmission and telecommunications?…

Gabriel Sosa Plata*/ México, July 2014

Versión en español | Versão em Português

Mexico’s constitutional reform in the area of telecommunications, which was approved in June 2013, generated enormous expectations for the transformation of the media structure of a country overwhelmed by enormous concentration in public television, pay-per-view television, landline telephone service, mobile telephony and Internet.

This reform seemed unthinkable because of the way in which Enrique Peña Nieto reached the presidency following an intense campaign promoted by Grupo Televisa when he was the governor of the state of Mexico. The Pact for Mexico signed in December 2012 by the country’s main political forces (PAN, PRD and PRI) in order to advance various structural reforms was the indispensable political basis for the creation of the new legal framework for radio broadcasting and telecommunications.

The Constitution states that radio broadcasting and telecommunications are a public service of general interest. Principles were established for promoting plurality and diversity in radio broadcasting and to improve conditions for competition, services and lower rates in telecommunications. The reform was detailed in the areas of competition, public and community media, fundamental rights (freedom of speech, right to information and access to the Internet), and set deadlines and criteria for creating the autonomous telecommunications agency (the Federal Telecommunications Institute, or IFT) and courts specializing in telecommunication and economic competition, among other issues. The only thing lacking was secondary legislation in order to define the span of the structural change that the political class had proposed.

Following the breakdown of the Pact for Mexico over differences related to the energy reform, the Executive Branch (and no longer the members of the Pact for Mexico) proposed a secondary legislative initiative in March 2014. It consisted of the creation of the Federal Telecommunications and Radio Broadcasting Law and the Public Radio Broadcasting System Law of the State of Mexico.

The initiative was questioned by civil society organizations, academic and experts immediately following its presentation in the Senate. The arguments against it include the fact that it strictly regulates –even establishing a zero rate in interconnection- the dominant telecommunications agency (América Móbil, which belongs to Carlos Slim) while lightly regulating the dominant radio agency (Emilio Azcárraga’s Televisa); it maintains the regulation of content as a matter to be handled by the Office of the Secretary of Governance (the equivalent to a Ministry of the Interior) rather than the IFT despite the constitutional reform; it keeps public and community media from engaging in marketing their programming even at a minimum percentage and does not guarantee the editorial autonomy of public media, keeping this under the control of governments. In the case of community and indigenous media, 10% of the spectrum is set aside for this sector, but in the worst AM and FM frequencies and with a requirement that they depend on the government with the allocation of 1% of the official funding as the main source of financing as well as donations from the communities served.

The reform also incorporates dispositions that violate the privacy of telecommunications service users under the pretext of strengthening public security. For example, it allows for geo-localization in real time and the tapping of telephone conversations and Internet exchanges without a judicial order and with no other safeguards. In addition, individuals’ data can be held by justice officials for up to two years. The measure also leaves open the possibility that net neutrality will be violated by traffic management among operators. Organizations such as Amnesty International and Article 19 alerted the public to the human rights impact of said dispositions.

In the area of competition, the reform does not establish –as the Constitution states- criteria for crossed ownership of media and grants privileges to television companies (Grupo Televisa and partners) to increase the percentages of commercial publicity transmission (from two percent for each 20% of transmission of programs produced nationally and five percent to acquire 20% of national independent production, which represents such an inadequate definition that it can be easily avoided). It does not oblige them to provide an economic counter-offer when transmitting on its digital channels through multi-programming nor to acquire independent national production.

Furthermore, during the issuing of the initiative in the Commissions of the Senate Chamber, an article –the ninth transitory article- was added which allows Televisa and its partners, such as Megacable, the company with the largest number of cable TV subscribers in the country, to acquire companies from this subsector without having to obtain authorization from the IFT. The goal was to create a strong competitor in convergent services (telephony, television and Internet in a single package) in addition to the other giant, América Móvil, as the legal advisor of the Presidency, Humberto Castillejos, stated on July 2. In doing so, the regulatory agency’s ability to regulate economic competition is limited.

In light of all of this, the Executive Branch’s initiative was called the Peña Televisa Law. Citizens around the country mobilized against it, including hundreds of organizations and thousands of individuals. The Front for Democratic Communication, which was led by citizen leaders and various political forces, emerged from this movement.

While the new law contains valuable elements such as the disappearance of charges for long distance calls and balance consultations, the mandatory incorporation of codes of ethics and media watch authorities in radio and TV stations, the inclusion of subtitling and sign language services for disabled individuals and free access to open TV channels for retransmission on pay-per-view TV systems, it fell short of making good on that great promise that Mexico’s media would now be democratized.

The mood shifted from hope to disappointment. The PRI, Mexican Ecologist Green Party (PVEM), New Alliance Party and some senators from the opposition, especially the PAN, did not accept most of the observations and proposals to correct the omissions and deficiencies in the legislative project and imposed their majority during a marathon session in the Senate on July 4 and 5. It was then the turn of the Congress, which also approved it.

What happened? Why couldn’t or wouldn’t Mexico radically modify the status quo of radio transmission and telecommunications?

There are several hypotheses, but I agree with the one that states that the governing political class and particularly the PRI historically have maintained a close political, family and business relationship with the “barons” of the radio industry. This has kept them from making progress on a structural reform with a democratic vision because any change could affect their own interests. It is important to recognize that the constitutional reform had an impact on some businesspeople from this sector, but not enough to threaten the stability of their commercial activities.

Another reason is the enormous interest that television in particular exercises over government officials, legislators and those who aspire to hold political positions through popular election under the premise that one must be on TV to exist and have a political future. The agenda of TV entrepreneurs has been defended in Congress and the Executive Branch even as drastic decisions are made to decrease Carlos Slim’s oligopoly.

On July 7, after analyzing the developments that had taken place with the telecommunications law in the Senate, historian Lorenzo Meyer stated on one of the most influential radio news programs that those who have economic power tend to impose themselves on other government powers. This is not necessarily the case in Mexico. The richest man in Mexico and one of the wealthiest in the world, with a fortune that far exceeds that of Mexico’s other TV owners, could not avoid the approval of a reform that directly affects him. What is the difference between Emilio Azcárraga of Televisa and Ricardo Salinas Pliego of Televisión Azteca? It is the fact that until now, one of them did not have control of TV screens, said Meyer. But, I would add, his power in Mexican telecommunications is so immense that not even a constitutional reform and secondary law will be able to dismantle it so easily.

*Gabriel Sosa Plata, Professor, UAM-X. Columnist with El Universal. Commentator on Radio Educación and Proyecto 40.  Media Watch Authority for Noticias MVS.



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