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America Movil Web Video Wins Reprieve as Meeting Postponed

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May 22 (Bloomberg) -- America Movil SAB avoided a showdown with Mexican officials over its online-video service as telecommunications regulators who had called for its urgent scrutiny voted to postpone a meeting.

Since a recently passed law will soon replace the Federal Telecommunications Commission with a new regulatory body, the agency’s board voted unanimously to call off today’s gathering, it said in a statement. The commission will study how best to use its time before it ceases to exist, it said.

The decision takes the heat off of America Movil after three of the four commissioners said its Internet broadcasts should be examined swiftly, according to a letter obtained by Bloomberg News. The company, banned from offering television under its license, shows soccer games, auto races and news shows through its Uno TV website, drawing the ire of broadcasters.

“We request that these subjects be incorporated into the agenda at the commission’s next board meeting,” the commissioners, Gonzalo Martinez Pous, Jose Luis Peralta and Alexis Milo, said in the letter. They didn’t indicate what position they took on the legal question.

Grupo Televisa SAB has called for regulators to examine Uno TV, and TV Azteca SAB filed a complaint about the site to the Federal Telecommunications Commission in 2011.

Slim gained control of Mexico’s state-owned landline-phone monopoly, Telmex, in 1990 and folded it into America Movil, his mobile-phone carrier, two decades later. Under the terms of the privatization, Slim agreed not to offer TV over the phone lines.

Video Competition

That prohibition came back to haunt Slim in 2006, when the government began allowing cable-TV companies to offer phone service. Telmex started losing customers to its new rivals, which could offer a bundle of services. The company’s attempts to alter its license were rejected by regulators, who said it hadn’t opened itself up enough to competition.

Video also has become an increasingly important part of America Movil’s business outside of Mexico: Its satellite and cable services in Brazil, Colombia and other countries now represent 7.3 percent of sales.

The new telecommunications law, passed last month by Mexico’s congress, will change the landscape of the industry, providing the new regulatory body with more tools to boost competition. America Movil has said the new rules will also give it the opportunity to provide TV service.

New Rules

Still, the current telecommunications agency’s delays in taking up the matter have left commissioners unable to weigh in on a subject that may not be immediately addressed by their replacements, who will have to spend time implementing dozens of new rules.

The bill still requires the signature of President Enrique Pena Nieto, which is “imminent,” the telecommunications agency said in today’s statement. Pena Nieto has said he backs the legislation.

The only acting commissioner who didn’t sign the letter was Mony de Swaan, the agency’s president. A fifth commissioner, Ernesto Gil Elorduy, submitted his resignation last month to seek a congressional seat.

The commissioners had been scheduled to discuss Uno TV on Feb. 6, along with a motion by Telmex to recuse Peralta from the matter, according to the letter. It was postponed so that staff members could add more information to the case.

Martinez Pous and Milo declined to comment, and Peralta and de Swaan didn’t respond to e-mail messages. America Movil, Televisa and TV Azteca officials had no immediate comment.

America Movil was little changed at 12.58 pesos at the close in Mexico City. The shares have dropped 16 percent this year.

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

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

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