Mexico watchdog aims new rules at Slim companies

Tue Sep 13, 2011 12:39pm EDT

* Regulator moves to curb Slim companies' power

* Will also seek to sanction Televisa's Cablevision

MEXICO CITY, Sept 13 (Reuters) - Mexico's telecom watchdog issued a new set of rules aimed at Carlos Slim's Telmex in a first move to curb the power of the leading fixed-line phone operator after being declared dominant in a specific market.

A previous attempt by regulator Cofetel to enforce tighter rules on Telmex more than a decade ago went into legal limbo after the company filed an appeal of that initiative.

Cofetel said in a release late on Monday it is sending the rules -- which oversee fees, quality of service and information -- to Mexico's federal regulatory improvement commission Cofemer for review.

It gave few details of the proposed regulations, but said they seek to prevent dominant companies from restricting network access to other competitors and to foster competition.

The rules are for those companies operating public telecommunication networks with substantial power in the leasing of local dedicated, domestic and international long distance and interconnection accesses.

While Cofetel did not mention Telmex or sister company Telnor as targets of the new rules, the two were identified last month by antitrust agency Cofeco as dominant in those particular fields.

The government knocked back a bid by Telmex to enter the pay television market earlier this year. This would be the first time it has issued blanket rules to cover an entire market in which Telmex already operates and was declared dominant by the competition watchdog.

Telmex has about 80 percent of Mexico's fixed-line market and is the only service provider that operates in money-losing remote, rural areas.

The new rules will now be submitted for scrutiny by industry experts, academics and the general public and subject to changes and improvements based on their recommendations. No time frame for the process was given.

A Telmex spokesman could not immediately comment on Cofetel's proposed rules.

Cofetel also said it is seeking to sanction broadcaster Televisa's (TV.N) (TLVACPO.MX) cable company Cablevision (CABLECPO.MX) after finding sustained network flaws for more than three consecutive days. (Reporting by Cyntia Barrera Diaz, editing by Matthew Lewis)

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