Feb. 24 (Bloomberg) -- Grupo Televisa SAB, Mexico’s biggest broadcaster, is studying the impact of a regulatory decision requiring it to offer its over-the-air signals to satellite and cable companies at no charge.
Televisa needs to see the full text of the ruling, announced three days ago, so it can analyze the document and figure out its next steps, a company official said. The Federal Telecommunications Institute, or IFT, said it plans to publish the decision in the national gazette in the coming weeks.
The ruling is a victory for Dish Mexico, whose satellite-TV service competes with Televisa’s Sky unit for subscribers. While Televisa had offered for years to charge Dish for a package of broadcast and cable channels, Dish had argued it should be able to carry over-the-air networks without paying.
The must-offer requirement for broadcasters was first outlined in a law passed in June. The IFT concluded last week that the rule had already gone into effect, letting Dish keep using signals from Televisa and TV Azteca SAB as it had been doing since September.
Now that it has the nation’s most-watched stations, Dish’s channel lineup is on more equal footing against Sky and against cable companies that had paid Televisa in the past to use the signals.
The must-offer rule will cause Televisa to miss out on about 1.4 billion pesos ($105 million) in sales this year, the company said last week. Retransmission fees still represent a small part of the sales in Televisa’s TV unit, which gets more than 70 percent of its revenue from advertising.
The broadcaster had questioned the IFT’s legal authority to rule on the matter. The IFT was temporarily blocked from making the decision earlier this month by a judge who’s hearing a lawsuit filed by Televisa. President Enrique Pena Nieto intervened, persuading the Supreme Court to let the IFT move forward with its decision.
Televisa owns channel 2 and channel 5, and Azteca has channel 7 and channel 13, all included under the law because of their coverage and viewership, Contreras said.
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.
Mexico’s broadcast industry is highly concentrated, with 96 percent of the country’s audience split among Televisa and Azteca. Azteca is scheduled to report fourth-quarter results on Feb. 27.
The IFT heeded broadcasters on another matter. The agency will look into Dish Mexico’s relationship with Telmex, Mexico’s largest phone company, said Commissioner Adolfo Cuevas.
Televisa and Azteca have asked the regulator to examine whether Telmex’s partnership with Dish violates the phone company’s license, which doesn’t let it offer video services. Telmex, a unit of America Movil SAB, has an option to acquire control of Dish if the phone company gets permission to offer TV. Dish is co-owned by EchoStar Corp. and MVS Comunicaciones SA.
In a statement last week, Telmex said it gets commissions for selling Dish service and provides financing for Dish set-top boxes. It also participates in a committee with Dish to discuss joint plans. Telmex can charge customers of Dish directly through their phone bills.
While it could acquire control of Dish someday, as it has disclosed for years in regulatory filings, it has no equity stake in the satellite provider and isn’t represented on the company’s board, it said. The company disclosed all details of its relationship with Dish to antitrust officials in 2008, and the antitrust agency approved the relationship the following year, Telmex said.
Cuevas said there were discrepancies in documents Telmex and Dish submitted to regulators. The IFT doesn’t have any contracts that mention a Telmex option to buy control of Dish, Contreras said.
To contact the reporter on this story: Patricia Laya in Mexico City at email@example.com
To contact the editor responsible for this story: Sarah Rabil at firstname.lastname@example.org