Webs flex political muscle in Mexico

Senate approves reform to media and telco laws

MEXICO CITY– It was a triumph of special-interest lobbying over public interest that would impress even Rupert Murdoch.

Mexico’s two major broadcasters, Televisa and its much smaller rival TV Azteca, have made off like bandits with the country’s digital terrestrial signal. And they won’t have to pay a penny, unlike new entrants to the market.

At the end of March, Mexico’s Senate approved a reform to media and telco laws, despite warnings by regulators who said it would further empower the big broadcasters as Mexico converts from analog to digital.

Thanks to Televisa’s lobbying, the controversial reform sailed through a bitterly divided Congress that has been unable to settle any tough issue since the election of Vicente Fox as president in 2000.

The lower house unanimously approved the bill on Dec. 1 in seven minutes, sparking protests from journalists, academics, pubcasters and a group of lawmakers.

While the senate heard testimony from dozens of experts who recommended modifying the bill, it did not revise a single comma of the draft.

“The vote was a confirmation of the subservience of political power to the interests of Televisa,” says Raul Trejo, a professor at the Universidad Nacional Autonoma de Mexico and a longtime media critic. “The bill was not even drafted by lawmakers — it was written in Televisa’s corporate offices.”

As Mexico heads for national elections in July, the timing of the legislative push was perfect. Sen. Javier Corral said the main political parties were unwilling to challenge the bill for fear of losing favorable news coverage from Televisa and TV Azteca.

Fox’s election ended 71 years of rule by the Institutional Revolutionary Party (PRI). The concentration of political power in one party was mirrored in the business sector by the dominance of monopolies controlled by families aligned with the PRI.

Televisa’s coziness with the PRI meant it remained the nation’s sole private broadcaster from its inception in 1955 until the creation of TV Azteca in 1993. Televisa, with more than 250 stations, still draws 70% of auds to its four national channels.

In decades past, Televisa openly manipulated the news to fit the PRI’s whim.

Mexico has entered a more democratic age, but dominant companies like Televisa and former state-owned telco Telmex, which 16 years after privatization still controls 95% of local traffic, continue to rule their fiefdoms.

There is universal agreement that Mexico’s 46-year-old TV and radio law needs reform, but opponents of the approved bill say it is riddled with omissions that would benefit dominant broadcasters.

Proponents say the bill ends the current system, where the president effectively awards TV and radio concessions, and will give greater competition and transparency. The bill transfers that power to the telco regulator, which will auction off digital broadcast concessions.

Critics say the bill doesn’t give regulators enough teeth to encourage competition or allow Mexico’s antitrust commission to reject new concession deals. Further, it doesn’t bar Televisa or TV Azteca from winning any new concessions that may be offered, Trejo says.

While the president could veto the bill, Fox has refrained from offering any opinion and is expected to sign on.

But there is the possibility of backlash.

The current front-runner in the presidential campaign is leftist Andres Manuel Lopez Obrador, who has said he would rein in the influence of the private sector over government.

Average Mexicans are tired of the continual parade of corruption and special interests dominating their government. If a resentment-driven vote pushes Lopez Obrador and his party into power, Televisa could become a scapegoat, says Gabriela Barrios, a former corporate lawyer and consultant.

But others doubt Lopez Obrador’s party will win a significant congressional majority to mount such a reform.

On the eve of the Senate vote, public radio stations launched a symbolic protest. To illustrate the effect of monopolies on media, they played one song over and over again for 24 hours.

However, competition could be coming.

Last week Telemundo, which was shut on a bid to enter the Mexican broadcast market last year, announced a partnership with Grupo Xtra, owned by textile and hotel magnate Isacc Saba, to build a studio in Mexico.

While the first aim is to produce content for Telemundo in the U.S., the partnership will also seek to enter the Mexican market as a digital broadcaster