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Mexico to Challenge Televisa Lawsuit Over New Content Rules

Mexico President Enrique Pena Nieto will challenge a judge’s ruling that the country’s telecommunications regulator lacks the standing to force broadcasters including Grupo Televisa SAB (TLEVICPO) to let cable and satellite companies carry their content for free.

The government will file an appeal with the Supreme Court on behalf of the Federal Telecommunications Institute to overturn the lower court’s decision, presidential spokesman Eduardo Sanchez said today at an event in Mexico City. The agency, known as IFT, earlier said in an e-mailed statement that the judge’s ruling on Feb. 10 interferes with its ability to regulate the industry.

The lawsuit, started by Televisa, undermines an initiative passed by Mexican lawmakers in June that requires broadcasters to offer their over-the-air programming to carriers without charging a fee or packaging them with other channels.

Citing the June law, Dish Mexico, the nation’s second-largest satellite-TV company, and phone carrier Axtel SAB (AXTELCPO) added signals from Televisa and TV Azteca SAB (AZTECACP), Mexico’s two largest broadcasters, to their channel lineups in September for no extra charge. Previously, cable and satellite providers had to pay for the broadcast networks as part of a bundle of channels.

Televisa and Azteca, both based in Mexico City, had disputed Dish’s move to go ahead with the retransmissions, arguing that it hadn’t yet been properly authorized by the regulatory agency, which itself was created by the June law.

Retransmission Fees

Billionaire Charlie Ergen, who co-owns Dish Mexico through EchoStar Corp. (SATS), pressed the telecommunications institute this week in a statement to let the satellite company keep retransmitting the broadcasters’ programming for free.

In an e-mailed statement after the government announcement today, Televisa said Dish Mexico was “disqualifying the judicial process to benefit its own interests.” The lawsuit seeks to protect Televisa’s right to control its intellectual property, the company said.

Televisa shares fell 2.6 percent to 76.41 pesos at the close in Mexico City, while TV Azteca declined 2.3 percent to 8.23 pesos. Axtel dropped 1.4 percent to 5.08 pesos. Echostar fell 1.3 percent to $47.87 at the close in New York.

To contact the reporter on this story: Patricia Laya in Mexico City at playa2@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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