UPDATE 1-Mexico regulator opens internet monopoly probe after complaint

Fri Mar 28, 2014 10:57am EDT

(Adds background on telecoms overhaul, secondary legislation)

MEXICO CITY, March 28 (Reuters) - Mexico's new telecommunications regulator has opened a probe into possible monopolistic practices in the country's internet services market following a complaint, the federal government's official gazette said on Friday.

The Federal Telecommunications Institute (IFT) is also probing the distribution and sales of content transmitted domestically by internet and pay television companies.

Billionaire Carlos Slim's America Movil dominates Mexico's telecoms market, and is the major player in internet via its fixed line operator Telmex and mobile operator Telcel. Broadcaster Televisa, meanwhile, dominates cable-based pay television and internet services.

The IFT did not specifically name any company as the target of its probe.

Mexico's government on Monday proposed giving the IFT wide-reaching powers to police the operations of dominant telecommunications companies and TV broadcasters, right down to their prices and discounts.

The telecoms overhaul, a central plank of a wider raft of economic measures ranging from taxes to energy that Pena Nieto pushed through Congress last year, has raised hopes the government is serious about finally breaking the stranglehold of a select few over Latin America's No.2 economy.

Proposed legislation sent to Congress would flesh out a constitutional reform approved last year that seeks to curb the power of both Slim and Televisa.

The regulator will have sweeping powers to order companies to sell assets, revoke concessions and share networks and infrastructure, according to the bill sent to the Senate.

However, opposition lawmakers say the telecom bill undermines the new watchdog by keeping key regulatory powers in the executive's hands, in a spat that could stall the passage of the rules.

Carlos Slim Domit, Slim's son and chairman of family-controlled America Movil, has criticized the telecoms bill.

America Movil said in a statement on Thursday evening that some of the new rules were confiscatory and rewarded a chronic lack of investment by competitors to the detriment of consumers. (Reporting by David Alire Garcia and Veronica Gomez; Editing by Simon Gardner)