April 19 (Bloomberg) -- Mexico’s Senate approved a bill to boost competition in telecommunications, adding provisions to give companies in other industries protections from the stronger antitrust agency the proposal creates.
The Senate’s version of the bill says companies regulated by the agency, the Federal Economic Competition Commission, can request temporary injunctions against fines and forced asset sales. Those changes won’t apply to telecommunications and media companies, who will be fined and can be broken up by a separate agency, the Federal Telecommunications Institute, whose decisions can’t be suspended.
The proposal defines the legal options for America Movil SAB and Grupo Televisa SAB, the nation’s biggest phone and media companies, as they grapple with stricter rules and scrutiny. While the bill allows the companies to go to court to overturn decisions, they won’t be able to suspend regulations while judges review their cases, a delaying tactic carriers have used in the past.
The proposal also gives the Communications and Transportation Ministry, a cabinet-level agency in the executive branch, 45 days to issue a nonbinding opinion on decisions by the newly created, independent regulator, the Federal Telecommunications Institute.
The bill, drafted by leaders of Mexico’s three major political parties and backed by President Enrique Pena Nieto, will also require the approval of a majority of legislatures from 31 Mexican states and the capital before it can become law.
The proposal allows foreigners, for the first time, to take majority stakes in landline phone and cable networks in Mexico, a measure meant to create more competition for America Movil, controlled by billionaire Carlos Slim. It also calls for the creation of new television channels to compete with Televisa.
The new telecommunications and antitrust agencies created by the legislation will have greater power to issue fines, force companies to share assets and even require the breakup of dominant carriers.
America Movil fell 2.7 percent to 12.15 pesos at 9:06 a.m. in Mexico City after reporting a 17 percent decline in first-quarter net income. Televisa dropped 0.9 percent to 61.66 pesos.
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