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Jáuregui y Del Valle

TELECOM

This Informational Notice refers to the Bill (Iniciativa) containing a Decree amending, inter alia, sundry Articles of the Political Constitution of the United Mexican States, presented to the House of Representatives of the Mexican Congress by President Enrique Peña Nieto and coordinating members of the four major Mexican political parties on March 11, 2013.

The Bill stems from the Pact for Mexico (Pacto por Mexico) signed on December 2, 2012 containing, inter alia, sundry actions and changes in telecommunications, radio broadcasting, IT and economic competition matters necessary to guarantee and modernize their social impact.

The amendments are principally directed to: (i) confirm telecommunications, radio broadcasting and information access as matters of general public interest; (ii) open the participation of foreign investors in public telecommunications networks and frequencies of the radio electric spectrum and satellite services in up to 100%; (iii) restrict participation of foreign investments in up to 49% in radio broadcasting; (iv) an optimized use and penetration of broadband in Mexico, by means of regulation fair competition, convergence and connectivity; (v) transition from analog to digital TV to be completed by 2018 and release of at least 90MHz of the 700 MHz frequency band; (vi) guaranteed access and broadcasting of information by any transmission means without censorship; (vii) assignment of the public telecommunication concession of the Federal Electricity Commission (Comisión Federal de Electricidad) to Telecomunicaciones de México, a descentralized government Agency of the Ministry of Communications and Transportation (Secretaría de Comunicaciones y Transportes), to ensure a maximized utilization and development of same; and, (viii) establishment of shared, wholesale broadband, utilizing all available and/or released telecommunication and infrastructure assets for such purposes.

The Bill contemplates the creation of a one-stop shop Federal Telecommunications Institute with a patrimony and discretionary powers separate and autonomous from the Federal Public Administration, to be entrusted with: (a) efficient development of telecommunications and radio broadcasting; (b) regulation of concessions and licenses; and, (c) exclusive discretionary powers to decide antitrust and competition matters in telecommunications and broadcasting. Its seven members will be proposed by the President out of five candidates for each position, prior approval from an Evaluation Committee, and ratified by the affirmative vote of two thirds of the members of the Senate.

As part of the provisions of the Pact for México, the Federal Telecommunications Institute, upon inception, will: (x) optimize the 900MHz and the 250 MHz frequency bands; (y) enforce the “must carry” and “must offer” provisions for over-the-air TV and radio broadcasting signal through restricted TV networks; and, (z) auction two new over-the-air television networks.

Finally, the Bill contemplates the establishment of specialized courts for telecommunications and radio broadcasting matters within 60 days of the date of enactment of the Decree.

If enacted, the Decree will be effective within the next business day of its publication in the Official Daily of the Federation (Diario Oficial de la Federación) and there shall be a 180-calendar day term for the Congress to approve the corresponding implementation legislation.