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Telmex Ruling Cuts Deadline for Agency Decision on Video Dispute

May 13 (Bloomberg) -- Telefonos de Mexico SAB said a court ruling imposed a 24-hour deadline for a government decision on whether the nation’s largest phone carrier can offer video services, shorter than the 15 days the government had expected.

The 24-hour time limit starts once the government receives notification of the ruling, according to documents released yesterday on the website of Telmex, as the Mexico City-based company is known. A Telmex official who can’t be named under company policy said he didn’t know when the government had been notified of the order, which he said was issued May 11.

The ruling further pressures the Transportation and Communications Ministry to resolve a dispute dating back to 2006. Telmex, controlled by billionaire Carlos Slim’s America Movil SAB, wants to offer pay television to stem a loss of customers to rival providers such as Grupo Televisa SA that are authorized to bundle cable, television and Internet.

The government has said Telmex hasn’t satisfied requirements to begin offering TV service. Francisco Javier Rebolledo Pena, the sixth district judge in administrative matters in Mexico City, ordered the 24-hour deadline in portions of a court document published yesterday on Telmex’s website.

The government said it would maintain its legal interpretation that it has 15 days to make a decision. The 24-hour rule used in the judge’s order only applies to cases that by their nature can be addressed within a day, such as releasing a person from jail, not for complex matters such as the video license, said Gerardo Sanchez Henkel, the communications ministry’s legal affairs chief, in an interview broadcast on Mexico City’s Stereo Cien radio network yesterday.

Telmex lost 29,000 lines last quarter for a total of 15.6 million.

Stock Gains

Telmex advanced 53 centavos, or 5.1 percent, to 10.95 pesos in Mexico City trading yesterday before disclosing the 24-hour order. The gain was the biggest since May 31, coming after Telmex announced May 11 it had won a separate court order forcing the government to decide on its TV request within 15 days.

Telmex has waited for a video license from the government since 2006, when the communications ministry announced regulations to allow companies to provide video, voice and Internet services. In 2008, regulators issued rules to allow consumers to switch telephone providers while keeping the same phone number, and Telmex complied with the guidelines, a requirement to get the video license.

To contact the reporter on this story: Crayton Harrison in Mexico City at tharrison5@bloomberg.net.

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net

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