GCR

GLOBAL COMPETITION REVIEW

Telecoms and Media

An overview of regulation in 46 jurisdictions worldwide
Contributing editors: Laurent Garzaniti and Natasha Good

2012
Published by Getting the Deal Through in association with:
Al Kamel Law Office Anjarwalla and Khanna Advocates Barretto Ferreira, Kujawski e Brancher Sociedade de Advogados Bentsi-Enchill, Letsa & Ankomah BLP Abogados Carey y Ca Cocalis & Psarras Coelho Ribeiro e Associados Debarliev, Dameski & Kelesoska Attorneys at Law Drew & Napier LLC Edward Nathan Sonnenbergs Freshfields Bruckhaus Deringer Greenberg Traurig, SC Harris Kyriakides LLC J J Roca & Asociados Lenz & Staehelin LG Avocats Mannheimer Swartling Advokatbyr Matheson Ormsby Prentice National Regulatory Agency for Electronic Communications and Information Technologies Moldova Oentoeng Suria & Partners School of Law, University of the Thai Chamber of Commerce Seth Dua & Associates Stikeman Elliott LLP SyCip Salazar Hernandez & Gatmaitan Telecommunications Regulatory Authority Bahrain The Telecommunications Regulatory Authority of the Slovak Republic Udo Udoma & Belo-Osagie Webb Henderson Wierzbowski Eversheds Wiltshire & Grannis LLP Wong Jin Nee & Teo YangMing Partners Zang, Bergel & Vies Abogados

CONTENTS

Overview Laurent Garzaniti, Natasha Good and Hein Hobbelen Freshfields Bruckhaus Deringer Argentina Pablo Crescimbeni and Mara Laura Barbosa Zang, Bergel & Vies Abogados Australia Angus Henderson, Raymond Roca and Rebecca Iglesias Webb Henderson Austria Bertram Burtscher and Stefan Kck Freshfields Bruckhaus Deringer Bahrain Eamon Holley and Alexandre Srot Telecommunications Regulatory Authority Bahrain Belgium Laurent Garzaniti, Hein Hobbelen, Jan Blockx and Valerie Lefever Freshfields Bruckhaus Deringer LLP Brazil Ricardo Barretto Ferreira and Fabio Ferreira Kujawski Barretto Ferreira, Kujawski e Brancher Sociedade de Advogados Canada David Elder Stikeman Elliott LLP Chile Alfonso Silva and Eduardo Martin Carey y Ca China Mark Parsons, Xun Yang, Victoria White and Longbo Wang Freshfields Bruckhaus Deringer LLP Costa Rica Eduardo Caldern, Luis Ortiz, Esteban Alfaro, Jos Monge and Gloriana Alvarado BLP Abogados Cyprus Michalis Kyriakides and Penelope-Alexia Giosa Harris Kyriakides LLC Dominican Republic Sharin Pablo de Roca, Yumari Torres de Guerra and Deborah Guzmn J J Roca & Asociados Egypt Mohamed Hashish Al Kamel Law Office European Union Laurent Garzaniti, Thomas Janssens, Hein Hobbelen and Diarmuid Laffan Freshfields Bruckhaus Deringer France Jrme Philippe and Aude-Charlotte Guyon Freshfields Bruckhaus Deringer Germany Norbert Nolte and Philipp Becker Freshfields Bruckhaus Deringer Ghana Josiah Kojo Ankoma-Sey, Frank Nimako Akowuah and Susan-Barbara Adjorkor Kumapley Bentsi-Enchill, Letsa & Ankomah Greece Alkis Psarras Cocalis & Psarras Hong Kong Mark Parsons, Victoria White and Bianca Lau Freshfields Bruckhaus Deringer India Atul Dua, Rahul Goel and Anu Monga Seth Dua & Associates Indonesia Noor Meurling, Toby Grainger, Dewi Sawitri and Alwin Redfordi Oentoeng Suria & Partners Ireland Helen Kelly and Ciara Treacy Matheson Ormsby Prentice Italy Tommaso Salonico and Luca Ulissi Freshfields Bruckhaus Deringer LLP Kenya Karim Anjarwalla, Alex Mathini and Henry Ogutu Anjarwalla and Khanna Advocates Luxembourg Stphan le Goueff and Herv Wolff LG Avocats Macedonia Dragan Dameski and Elena Miceva Debarliev, Dameski & Kelesoska Attorneys at Law Malaysia Wong Jin Nee and Chong Tze Lin Wong Jin Nee & Teo Mexico Bertha Alicia Ordaz Avils and Octavio Lecona Morales Greenberg Traurig, SC Moldova Sergiu Sitnic National Regulatory Agency for Electronic Communications and Information Technologies Netherlands Onno Brouwer, Winfred Knibbeler and Nima Lorj Freshfields Bruckhaus Deringer LLP New Zealand Malcolm Webb and Edward Willis Webb Henderson Nigeria Jumoke K Lambo and Mr Godson Ogheneochuko Udo Udoma & Belo-Osagie Philippines Rose Marie M King-Dominguez and Ruben P Acebedo II SyCip Salazar Hernandez & Gatmaitan Poland Arwid Mednis, Bozena Marciniak and Artur Salbert Wierzbowski Eversheds Portugal Jaime Medeiros and Mnica Oliveira Costa Coelho Ribeiro e Associados Russia Igor Gerber and Andrey Filippenko Freshfields Bruckhaus Deringer LLP Singapore Chong Kin Lim and Charmian Aw Drew & Napier LLC Slovakia The Telecommunications Regulatory Authority of the Slovak Republic South Africa Zaid Gardner Edward Nathan Sonnenbergs Spain Francisco Cantos, Soledad Gmez and Alejandro Mil Freshfields Bruckhaus Deringer LLP Sweden Bo Sderberg, Stefan Widmark and Martin Gynnerstedt Mannheimer Swartling Advokatbyr Switzerland Marcel Meinhardt, Astrid Waser and Michael Cabalzar Lenz & Staehelin Taiwan Robert C Lee, Lisa Lin and Ivan Pan YangMing Partners Thailand Sudharma Yoonaidharma School of Law, University of the Thai Chamber of Commerce United Kingdom Rod Carlton, Mark Sansom and Olivia Hagger Freshfields Bruckhaus Deringer LLP United States John Nakahata, Kent Bressie, Paul Margie, Brita Strandberg and Michael Nilsson Wiltshire & Grannis LLP Quick Reference Tables

3 6 15 29 40 48 61 70 81 94 111 116 125 132 140 167 181 192 200 209 227 237 245 266 279 288 295 302 313 322 331 340 347 358 366 377 387 405 426 432 441 454 465 474 482 491 508 517

Telecoms and Media 2012

Contributing editors Laurent Garzaniti and Natasha Good Freshfields Bruckhaus Deringer Business development managers Alan Lee George Ingledew Robyn Hetherington Dan White Marketing managers Ellie Notley Alice Hazard Marketing assistants William Bentley Zosia Demkowicz Admin assistant Megan Friedman Marketing manager (subscriptions) Rachel Nurse Subscriptions@ GettingTheDealThrough.com Assistant editor Adam Myers Editorial assistant Lydia Gerges Senior production editor Jonathan Cowie Chief subeditor Jonathan Allen Subeditors Anna Andreoli Davet Hyland Caroline Rawson Charlotte Stretch Editor-in-chief Callum Campbell Publisher Richard Davey Telecoms and Media 2012 Published by Law Business Research Ltd 87 Lancaster Road London, W11 1QQ, UK Tel: +44 20 7908 1188 Fax: +44 20 7229 6910 Law Business Research Ltd 2012 No photocopying: copyright licences do not apply. ISSN 1471-0447
The information provided in this publication is general and may not apply in a specific situation. Legal advice should always be sought before taking any legal action based on the information provided. This information is not intended to create, nor does receipt of it constitute, a lawyerclient relationship. The publishers and authors accept no responsibility for any acts or omissions contained herein. Although the information provided is accurate as of April 2012, be advised that this is a developing area.

Printed and distributed by Encompass Print Solutions Tel: 0844 2480 112

Law Business Research

Greenberg Traurig, SC

MexiCo

Mexico
Bertha Alicia Ordaz Avils and Octavio Lecona-Morales Greenberg Traurig, SC
Communications policy
1 Policy Summarise the regulatory framework for the telecoms and media sector. What is the policymaking procedure? 2 Convergence Has the telecoms-specific regulation been amended to take account of the convergence of telecoms, media and IT? Are there different legal definitions of telecoms and media?

Telecommunications, including radio and television, are regulated under the framework of the Mexican Federal Constitution. The Mexican federal government enacts regulation and sets out public policy regarding telegraphy, radiotelegraphy and satellite communications. The federal legislature enacts laws and the federal executive issues regulations related to telecommunications and the radio frequency spectrum. Telecommunications are regulated by the Telecommunications Law and the Telecommunications Regulations, which, although they derive from the Law of General Means of Communications, will apply unless their provisions are contrary to the provisions of the Telecommunications Law. The purpose of the Telecommunications Law is to govern the use and exploitation of the radio-electrical spectrum, of the telecommunications networks and of satellite communication. Radio and television broadcasting is regulated by the Radio and Television Law. Some other regulations have been issued that are specific to certain telecommunications services: the Satellite Communications Regulations, the Cable Television Regulations and the Public Telephony Regulations. In addition, the executive has issued regulations pertaining to the resale of telecommunication services. Notably, there are two governmental agencies that are required to interact and that exercise authority in telecommunication matters, namely the Ministry of Communications and the Federal Telecommunications Commission. The former is the policymaker and the entity that ultimately determines whether to grant or revoke concessions, permits and authorisations, and to carry out radio-frequency auctions and auctions for geostationary orbital slots; the latter is the technical agency that oversees compliance, but has no authority to impose penalties upon offenders; such authority is granted to the Ministry of Communications. The Federal Telecommunications Commission has broad authority in matters of radio and television broadcasting. The Federal Telecommunications Commission may also issue mandatory rules. In the exercise of such authority, this agency has issued Rules for Local Telephony, Rules for Domestic Long Distance Service, Rules for International Long Distance Service, and technical programmes pertaining to interconnection and interoperability matters, numbering and signalling, and to measure the quality of mobile telephony.

The Telecommunications Law rests upon the principle of technological neutrality. Although this statute does not specifically regulate services, it regulates facility-based networks and the use and enjoyment of scarce resources, such as radio frequencies. However, the Telecommunications Law was amended in 2006 to provide that radio and television broadcasting services are deemed telecommunications services. Before such amendment, telecommunications services and broadcasting services were considered separate services. In 2006 the Ministry of Communications issued Rules providing for the convergence of the local fixed-telephony service and the cable television service. Such rules did not amend the regulations in place, but provided amendments to existing concessions to authorise additional services so that local fixed-telephony service providers were able to provide cable television service and vice versa.
3 Broadcasting sector Is broadcasting regulated separately from telecoms? If so, how?

Although the Telecommunications Law deems broadcasting services to be telecommunications services, broadcasting is regulated by the Radio and Television Law.
Telecoms regulation general
4 WTO Basic Telecommunications Agreement Has your jurisdiction committed to the WTO Basic Telecommunications Agreement and, if so, with what exceptions?

Mexico is an original signatory of the Basic Telecommunications Agreement and agreed to be bound to the obligations provided under the Reference Paper. Mexico has submitted its schedule of specific commitments and supplements thereto. Mexico has undertaken specific commitments for telecommunications services under articles XVI (Market Access), XVII (National Treatment), and XVIII (Additional Commitments) under the General Agreement on Trade in Services. Notably a concession may only be granted to a Mexican individual or entity, and any foreign investment therein may not exceed 49 per cent, except for cellular telephone services, in which case foreign investment may exceed such percentage subject to the Foreign Investment National Commissions approval.

www.gettingthedealthrough.com

313

mexico
5 Public/private ownership What proportion of any telecoms operator is owned by the state or private enterprise? 8 Satellite facilities and submarine cables

Greenberg Traurig, Sc

All telecoms service providers are privately owned. The Mexican government wholly owns the power utility company called Comisin Federal de Electricidad, which is the right holder of a concession that authorises it to carry signals among network operators.
6 Foreign ownership Do foreign ownership restrictions apply to authorisation to provide telecoms services?

In addition to the requirements under question 7, do other rules apply to the establishment and operation of satellite earth station facilities and the landing of submarine cables?

A concession may only be granted to a Mexican individual or entity, and any foreign investment therein may not exceed 49 per cent, except for cellular telephone services, in which case foreign investment may exceed this percentage subject to the Foreign Investment National Commissions approval. Direct foreign ownership in broadcasting is not permitted.
7 Fixed, mobile and satellite services Comparatively, how are fixed, mobile and satellite services regulated? Under what conditions may public telephone services be provided?

The landing of submarine cables requires prior authorisation of the environmental agency and compliance with local zoning programmes and federal standards and, depending on the project, it may require the obtaining of rights of way. As stated above, in general terms the rendering of satellite services requires the obtainment of the applicable concessions from the federal government. The operation of satellite earth station facilities or control centres is derived from the corresponding concession. Concessionaires occupying geostationary orbital positions must install and operate their control centres within Mexican territory. Control centres are preferably to be operated by Mexican nationals. In addition, the installation, operation and exploitation of earth transmitter antennas requires a permit from the Ministry of Communications. Earth receiver antennas (downlink), with no transmission functions, do not require a permit.
9 Universal service obligations and financing Are there any universal service obligations? How is provision of these services financed?

Fixed and mobile services are regulated by the Rules of Local Service. Both services are subject to calling-party-pays rules and are considered local services. Mobile services may be provided by a wholly foreign-owned investor, which is not the case for fixed and satellite services. A concession to install, operate and enjoy a public telecommunications network may provide fixed or mobile services. In the case of mobile services, a separate concession is also required to use, exploit and enjoy radio frequencies. For both mobile and satellite services, these concessions are obtained only through public auction proceedings. In the case of satellite services the concession granted provides that the state shall be granted a certain amount of MHz as consideration. Satellite services are regulated by the Regulations for Satellite Communication. The provision of satellite services is subject to certain foreign investment rules. Direct foreign investment in a satellite company may constitute up to 49 per cent of the capital stock or equity. Foreign investment may also constitute a further proportion of investment in the company through neutral investment (shares with limited or no voting rights). To implement a neutral investment structure, companies require the authorisation of the Ministry of Economy. The Telecommunications Law sets forth two types of satellite concessions: oncessions to occupy and exploit geostationary orbital positions c and satellite orbital positions assigned to Mexico with their corresponding radioelectric spectrum frequency bands and rights to send and receive signals (concessions for geostationary orbital positions); and oncessions over the rights to send and receive signals and radioc electric spectrum frequency bands associated with foreign satellites that cover and may render services in the territory of Mexico as long as a reciprocity treaty with the foreign country where the signal originates is in place (landing rights concessions). Furthermore, international satellites established under multilateral international treaties may operate in Mexico. Concessions for geostationary orbital positions are granted following public auctions, except when such concessions are given to entities and agencies of the federal government, in which case such concessions are only granted to the relevant entities. Landing rights concessions are granted upon request, provided that certain requirements are met.

The Ministry of Communications must regularly lay down universal service programmes. Usually concessions granted to install, operate and enjoy a public telecommunications network include the concessionaires undertaking to agree a universal service programme for a five-year term during the term of such concession. The Ministry of Communications has granted network operators the right to implement universal service programmes aimed at rural communities through public auction proceedings. Such programmes are financed by public funding approved by the Mexican Congress. To aid such programmes, the Ministry of Communications may directly assign radio frequencies to the network operator implementing the universal service programme.
10 Operator exclusivity and limits on licence numbers Are there any services granted exclusively to one operator or for which there are only a limited number of licences? If so, how long do such entitlements last?

As a matter of law there are no limits to the number of licences that may be granted; however, radio frequencies are auctioned according to a band plan which limits the number of concessions to be granted. Such concessions may be granted for a maximum term of twenty years, which may be repeatedly extended.
11 Structural or functional separation Is there a legal basis for requiring structural or functional separation between an operators network and service activities? Has structural or functional separation been introduced or is it being contemplated?

The Ministry of Communications may grant concessions to install and operate a public telecommunications network, but not to enjoy such network. In this sense, the network operator would not be entitled to provide services. However, to the best of our knowledge that has not been the case to date.
12 Number portability Is number portability across networks possible? If so, is it obligatory?

Number portability across networks is mandatory pursuant to the Telecommunications Law and the Rules for Number Portability.

314

Getting the Deal Through Telecoms and Media 2012

Greenberg Traurig, SC
13 Authorisation timescale Are licences or other authorisations required? How long does the licensing authority take to grant such licences or authorisations? 16 Modification and assignment of licence

MexiCo

How may licences be modified? Are licences assignable or able to be pledged as security for financing purposes?

Value-added services only require registration with the Federal Telecommunications Law. Such registration may vary between one and two months, but statutorily the term is three months. Permits are required for the resale of telecommunications services, and to install, operate or enjoy transmitting earth stations, which in either case are normally granted within six months, but statutorily the term is three months. Concessions are required to: install, operate or enjoy a public telecommunications network; use, exploit or enjoy commercial radio frequencies; ccupy geostationary orbital slots and satellite orbits allocated o to Mexico and to enjoy its associated radio frequencies; and enjoy landing rights. Concessions to install, operate or enjoy a public telecommunications network and concessions to enjoy landing rights may take up to six months to grant, but statutorily the term is four months. Concessions to use, exploit or enjoy commercial radio frequencies and concessions to occupy geostationary orbital slots and satellite orbits allocated to Mexico and to enjoy its associated radio frequencies may take up to 18 to 24 months from the date the public auction is convened until they are granted.
14 Licence duration What is the normal duration of licences?

Licences are modified upon resolution of the Ministry of Communications after hearing the opinion of the Federal Telecommunications Commission. The interested party is required to file an application to modify the licence and pay the examination fee. Licences are assignable in whole or in part after the initial threeyear term has elapsed. If such assignment is to be effected between licensees providing similar services in the same location, the Federal Competition Commissions approval is required. Licences may be granted as security; however, in the event of foreclosure, the Ministry of Communications may determine whether to grant such concession to the creditor.
17 Retail tariffs Are national retail tariffs regulated? If so, which operators tariffs are regulated and how?

There is no regulation of retail tariffs, except the incumbent fixedtelephone providers tariffs, which are reviewed periodically and are set according to a specific formula provided in the concession granted to each operator.
18 Customer terms and conditions Must customer terms and conditions be filed with, or approved by, the regulator or other body? Are customer terms and conditions subject to specific rules?

Permits for the resale of telecommunication services may be granted for a term up to 10 years, which may be extended. Permits to install, operate or enjoy transmitting earth stations are valid as long as no changes are made to technical and operational requirements set forth therein. Concessions to install, operate or enjoy a public telecommunications network may be granted for a term up to 30 years, which may be extended. Concessions to use, exploit or enjoy commercial radio frequencies; concessions to occupy geostationary orbital slots and satellite orbits allocated to Mexico and to enjoy its associated radio frequencies; and concessions to enjoy landing rights may be granted for a term up to 20 years, which may be extended.
15 Fees What fees are payable for each type of authorisation?

Customer terms and conditions must be filed for approval and registration with the Federal Telecommunications Commission. There are no telecommunications-specific rules applicable. In addition, the Consumer Protection Agency reviews and sanctions such terms and conditions.
19 Next-Generation Access networks How are NGA networks regulated?

NGA networks are not regulated.

20 Changes to telecoms law Are any major changes planned to the telecoms laws?

Value-added services registration is free of charge. An examination and granting fee is payable according to the following: ermits for the resale of telecommunications services require payp ment of US$2,807; ermits to install, operate or enjoy transmitting earth stations p require payment of US$1,204; oncessions to install, operate or enjoy a public telecommunicac tions network require payment of US$4,936; oncessions to use, exploit or enjoy commercial radio frequencies c require payment of US$3,499, plus an annual fee depending on the amount of bandwidth used; oncessions to occupy geostationary orbital slots and satellite c orbits allocated to Mexico, and to enjoy its associated radio frequencies require payment of US$3,175; and oncessions to enjoy landing rights require payment of US$4,980. c

Major changes to telecoms laws have been discussed in Congress. There are three initiatives to amend the law, but none are close to being enacted. Among other changes, these initiatives propose to grant full independence to the Federal Telecommunications Commission and to get rid of the Communications undersecretary. In addition, some proposals suggest unifying the telecoms and media legislation.
Telecoms regulation Mobile
21 Radio frequency (RF) requirements For wireless services, are radio frequency (RF) licences required in addition to telecoms services authorisations and are they available on a competitive or non-competitive basis? How are RF licences allocated? Do RF licences restrict the use of the licensed spectrum?

Both a concession to install, operate and enjoy a public telecommunications network and a concession to use, exploit and enjoy commercial radio frequencies are required to provide wireless services. The latter concession is granted through a public auction proceeding. This proceeding includes obtaining the former concession. The award is granted to the highest bidder with the best plan to exploit

www.gettingthedealthrough.com

315

mexico
such RF. These RF licences restrict the use of the licensed spectrum to the services attributed as per the National Allocation Chart.
22 Radio spectrum Is there a regulatory framework for the assignment of unused radio spectrum (refarming)? Do RF licences generally specify the permitted use of the licensed spectrum or can RF licences for some spectrum leave the permitted use unrestricted? 29 Local loop

Greenberg Traurig, Sc

Is there any specific rule regarding access to the local loop or local loop unbundling? What type of local loop is covered?

Local loop unbundling has not been regulated. The Plan for Interconnection and Interoperability provides for the unbundling of the local loop, but falls short of providing specific rules.
30 Interconnection and access How is interconnection regulated? Can the regulator intervene to resolve disputes between operators? Are wholesale (interconnect) prices controlled and, if so, how? Are wholesale access services regulated, and, if so, how?

There are no specific provisions regulating RF refarming. However, there are measures available to refarm RF spectrum. RF licences generally specify the permitted use of the licensed spectrum.
23 Spectrum trading Is licensed RF spectrum tradable?

Licensed RF spectrum is not tradable.

24 Mobile virtual network operator (MVNO) and national roaming traffic Are any mobile network operators expressly obliged to carry MVNO or national roaming traffic?

Interconnection is required for all networks on terms to be agreed upon between the parties. If the parties fail to reach an agreement, the Federal Telecommunications Commission may intervene and resolve the dispute. The Federal Telecommunications Commission has resolved interconnection tariffs according to the costs incurred. Disputes regularly concern investment issues. Tower sharing is provided for under the Telecommunications Law.
Telecoms regulation internet services
31 Internet services How are internet services, including voice over the internet, regulated?

The Regulations for the Resale of Domestic and International Long Distance Services provide that the holders of public telecommunications networks must allow the resale of the services they provide, pursuant to the terms agreed upon between the parties. No specific provisions pertain to national roaming traffic.
25 Mobile call termination Does the originating calling party or the receiving party pay for the charges to terminate a call on mobile networks? Is call termination regulated, and, if so, how?

VoIP has not been comprehensively addressed. As it currently stands, it is construed as any other voice service and therefore a concession is required to provide such service. Internet services are not regulated.
32 Internet service provision Are there limits on an internet service providers freedom to control or prioritise the type or source of data that it delivers? Are there any other specific regulations or guidelines on net neutrality?

Call termination is regulated and it is the general rule for both fixed and mobile service; however, subscribers of mobile services can opt for the receiving party to pay. The Rules for Local Service and the Rules for Domestic Long Distance Service set forth the applicable technical standards and protocols to implement it. Such calls are differentiated by using a prefix (044 for local calls and 045 for domestic long distance calls to a mobile phone).
26 International mobile roaming Are wholesale and retail charges for international mobile roaming regulated?

There are neither limits nor regulation on this matter. The Telecommunications Law is based on the principle of technological neutrality.
33 Financing of basic broadband and NGA networks Is there a government financial scheme to promote basic broadband or NGA broadband penetration?

There is no governmental programme promoting broadband penetration.

Media regulation
34 Ownership restrictions Is the ownership or control of broadcasters restricted? May foreign investors participate in broadcasting activities in your jurisdiction?

No.
27 Next-generation mobile services Is there any regulation for the roll-out of 3G, 3.5G or 4G mobile service?

There is no specific regulation. In 2011 the Ministry of Communications convened a public auction to grant 3.5 and 4G mobile services licences. Several licences were granted and the roll-out of 3.5 and 4G mobile services has already begun.
Telecoms regulation fixed infrastructure
28 Cable networks Is ownership of cable networks, in particular by telecoms operators, restricted?

Ownership and control over broadcasting and other radio and television services, other than cable television, are reserved for Mexican individuals and companies. However, the Foreign Investment Law allows foreign investors to hold a certain percentage of the equity of Mexican broadcasting companies by virtue of neutral investment, which does not count as foreign investment and which is represented by shares or equity interests with limited or no voting rights. Neutral investment structures may only be implemented upon authorisation from the Ministry of Economy.

As a matter of telecoms law there is no restriction; however, the Federal Competition Commission may be authorised to approve or block ownership of cable networks.

316

Getting the Deal Through Telecoms and Media 2012

Greenberg Traurig, SC
35 Cross-ownership Are there any regulations in relation to the cross-ownership of media companies, including radio, television and newspapers? Is there any suggestion of change to regulation of such cross-ownership given the emergence of new media platforms? 37 Foreign programmes and local content requirements

MexiCo

Are there any regulations concerning the broadcasting of foreignproduced programmes? Do the rules require a minimum amount of local content? What types of media (eg, online, mobile content) are outside of this regime?

There are no explicit regulations on cross-ownership of media companies. The Federal Competition Commission may be able to impose cross-ownership conditions such as in merger clearance proceedings or in investigations for unlawful concentrations.
36 Licensing requirements What are the licensing requirements for broadcasting, including the fees payable and the timescale for the necessary authorisations?

Commercial exploitation of radio and television channels requires a concession granted by the federal government. Such concessions are granted following public auctions. The federal government is entitled to receive monetary consideration for the issuance of the corresponding concession; however, the Radio and Television Law does not set forth specific amounts for such purposes. Such amounts and the mechanics for payment are mainly derived from the terms of the public auction and the concession. The federal government shall publish the concession programme regarding spectrum frequencies to be subject to a public auction procedure in the Official Gazette. Calls to initiate public auction procedures of concessions for the commercial exploitation of radio and television channels are to be published by the Federal Telecommunications Commission in the Official Gazette and shall make available to any interested party the bases for the public auction process. Interested parties must comply with a number of requirements, including: (i) general information and evidence of their Mexican nationality; (ii) a business plan containing at least: a technical description and specifications; a coverage programme; an investment programme; a financial programme; and a technological update and development programme; (iii) a programming and production plan; (iv) a guaranty or bond to secure continuation in the public auction until the concession is granted or denied; and, (v) approval of the Federal Competition Commission. The timescale of a public auction process may vary; it may take between six months and one year. Operation of television and radio broadcasting channels for official, cultural or experimental purposes, as well as for school radio and for channels established by public entities for their objectives, are granted by means of a permit. Permits are given upon request and the interested party must comply with a number of requisites that include, without limitation, (i) and (iii) (v) above, as well as a channel development and services programme. Permits for television and radio broadcasting channels for official purposes must comply with additional requirements set forth in the Radio and Television Law related to the public nature of the interested party, and dealing with public purposes, adequate exercise of faculties, authorisation from the competent public official or government body, and evidence that the requesting party has the necessary budget approvals to install and operate the channel in terms of applicable laws.

The retransmission of foreign-produced programmes requires the previous authorisation of the Ministry of the Interior. Local content is encouraged but no minimum amount is set forth in the Radio and Television Law and its regulations. Concessionaires covering at least 20 per cent of their programming with national independent content may increase the time devoted to publicity under the Regulations to the Radio and Television Law by up to 5 per cent. Maximum times for publicity set forth in the Regulations to the Radio and Television Law are referred to in the following question. The regulations described above apply only to radio and television broadcasting, and do not cover mobile content or the internet.
38 Advertising How is broadcast media advertising regulated? Is online advertising subject to the same regulation?

Broadcast media advertising is mainly ruled by the Radio and Television Law and its Regulations, as well as by the Consumer Protection Law. Under the Consumer Protection Law, publicity has to be true, verifiable and shall not include abusive or misleading text, dialogue, sounds, images, marks or protected designations of origin that cause or may cause error or confusion. Also, under the Radio and Television Law and its regulations, as well as under the General Health Law, there are rules referring to the publicity of alcoholic beverages and tobacco, and that prohibit advertisement that is morally offensive, or that contravenes good manners and habits, given the characteristics of the product being advertised. In addition, radio and television broadcasting channels must follow certain rules regarding publicity, which include without limitation that they shall: eep a prudent balance between the time that is devoted to pubk licity and their programming as a whole as follows: for television broadcasting, time devoted to commercial publicity shall not exceed 18 per cent of total transmission time for each channel; for radio, time devoted to commercial publicity shall not exceed 40 per cent of total transmission time per channel; and time used for commercial publicity does not include advertisement of the radio or television channel itself, or time devoted to state content or any other time available for the executive branch of government; ot advertise centres or places that allow or encourage addictions; n ot transmit advertisement of industrial or commercial products n or activities that deceive the public or that cause damage due to an exaggerated or false indication of their uses, applications or properties; and ot transmit publicity that incites violence or is related to prodn ucts that distort good nutritional habits. Online advertisement is not regulated by the Radio and Television Law and its regulations, however general provisions in the Consumer Protection Law and the General Health Law may apply, subject to the territorial application of such laws.

www.gettingthedealthrough.com

317

mexico
39 Must-carry obligations Are there regulations specifying a basic package of programmes that must be carried by operators broadcasting distribution networks, (ie, must-carry obligations)? Is there a mechanism for financing the costs of such obligations?

Greenberg Traurig, Sc
On 2 September 2010 a presidential decree was issued setting forth actions to be taken by the Federal Government to undertake the transition to digital terrestrial television. The decree considers that Mexico is in the position to end analogue transmissions by 2015, based upon decisive actions to achieve the necessary coverage and penetration. In September 2011, the Federal Telecommunications Commission approved the modification of the Transition to Digital Terrestrial Television Policy to encourage analogue switch-off in the shortest time possible. The proposal was subject to regulatory review by the Federal Commission for Regulatory Improvement. At the time of writing, the Federal Telecommunications Commission had postponed the discussion and resolution of any amendment to the transition policy. Concerning transition to digital terrestrial radio, an executive order was published on 16 June 2011 adopting the IBOC (in band on channel) standard (consistent with NRSC-5-B standard) for digital terrestrial transmission in the 535-1705kHz and 88-108MHz frequency bands. Such executive order also sets forth the policy for the transition to digital terrestrial radio. Multiple programming is allowed under certain rules.
43 Digital formats Does regulation restrict how broadcasters can use their spectrum (multichannelling, high definition, data services)?

No specific regulations set forth must-carry obligations. The Federal Telecommunications Commission has worked on a project of new regulations for paid television and radio services, and has included certain must-carry provisions. As a result of merger clearance procedures, the Federal Competition Commission has imposed must-carry duties to cable operators in order to carry broadcasting channels. The Federal Competition Commission has also opined that must-carry provisions need to be established. There are no regulations setting forth mechanisms for financing the costs of such obligations.
40 Changes to the broadcasting laws Are there any changes planned to the broadcasting laws? In particular, do the regulations relating to traditional broadcast activities also apply to broadcasting to mobile devices or are there specific rules for those services?

Different proposals for reforms have been discussed in the Mexican Congress, addressing several topics, from convergence to cross-media ownership, from the legal nature of the regulator to the clarification and unification of its powers, and from one body of law regulating telecommunications and broadcasting services to regulation of Next-Generation services. Broadcasting services through mobile devices are not specifically regulated, other than the necessary approvals to the corresponding carrier to render voice, data and other services under its corresponding concession.
41 Regulation of new media content Is new media content and its delivery regulated differently from traditional broadcast media? How?

The Executive Order sets forth that during the transition to terrestrial digital television transmissions must be of high definition (HDTV) or enhanced definition (EDTV) quality. At the beginning of digital transmissions in each additional channel, the corresponding signal must be at least standard definition (SDTV) quality. Concessionaires and permit holders who under the Executive Order requested a temporary digital channel to make simultaneous transmissions of their regular broadcasting television programming, are allowed to transmit broadcasting television signals using multiplexing technology.
Regulatory agencies
44 Regulatory agencies Which body or bodies regulate the communications sector? Is the telecoms regulator separate from the broadcasting regulator?

No particular regulation is in place regarding new media content. In investigations for relative monopolistic practices in the market of content provision over mobile services, involving the major mobile services provider, the Federal Competition Commission has imposed non-exclusivity obligations in the provision of premium content.
42 Digital switchover When is the switchover from analogue to digital broadcasting required or when did it occur? How will radio frequencies freed up by the switchover be reallocated?

As per an Executive Order dated 2 July 2004 (the Executive Order), the A/53 standard from the Advanced Television Systems Committee, Inc (ATSC) for transition to digital terrestrial broadcasting television was adopted, and the Transition to Digital Terrestrial Television Policy was established. The Executive Order also sets forth that the policy may be reviewed and adjusted consistently as the transition process evolves. Concessionaires and permit holders were given the opportunity to request a temporary digital channel to make simultaneous transmissions of their regular broadcasting television programming, to make necessary tests and to encourage a faster transition to digital television. Once the digital switchover is completed, the radioelectric spectrum that is not viable for digital transmission will revert to the nation. The Executive Order includes a calendar for a gradual regional transition to digital terrestrial television that would cover the Mexican territory by 2021, with no specific date for a final analogue switch-off.

The Ministry of Communications is in charge of planning, formulating and conducting policies and programmes in the telecommunications arena. The Federal Telecommunications Commission is an administrative body devolved from the Ministry of Communications, with technical and operating autonomy, responsible for regulating, promoting and supervising the efficient development and broad social coverage of telecommunications and broadcasting services in Mexico; it has full autonomy to render decisions. The Federal Telecommunications Commission does not have power to sanction telecoms concessionaires or permit holders; it can only issue recommendations to the Ministry of Communications to so. In some areas not clearly delineated the law, some of the powers and functions of the Ministry of Communications and the Federal Telecommunications Commission, especially in the telecommunications arena, overlap. The Federal Telecommunications Commission has exclusive powers and faculties concerning broadcasting services.

318

Getting the Deal Through Telecoms and Media 2012

Greenberg Traurig, SC
45 Establishment of regulatory agencies How is each regulator established and to what extent is it independent of network operators, service providers and government?

MexiCo
which such data can be managed, transferred and used, among other aspects. The Consumer Protection Law establishes that the protection and appropriate use of consumer data is fundamental to the consumerprovider relationship.
48 Data retention and disclosure obligations What are the obligations for operators and service providers to retain customer data? What are the corresponding disclosure obligations? Will they be compensated for their efforts?

The Ministry of Communications is part of the executive branch and the head of the Ministry is appointed by the President of Mexico. As stated above, the Federal Telecommunications Commission is an administrative devolved body of the Ministry of Communications. It is governed by a body of five commissioners (including its president) sitting en banc. Commissioners discuss matters in a collegiate way and resolutions are adopted by a majority of votes. The president has the casting vote in the event of a tie. Commissioners are appointed by the president of Mexico and need to comply with a number of requirements including: eing of Mexican nationality and born in Mexico, in full exercise b of his or her civil and political rights; being over 35 years old and less than 75 years old; and aving stood out in professional activities, public service or h academic roles substantially related to the telecommunications sector.
46 Appeal procedure How can decisions of the regulators be challenged and on what bases?

Decisions made by the Ministry of Communications or the Federal Telecommunications Commission may generally be challenged by: motion for review; annulment action; or mparo, the applicability of which shall depend on the type and a nature of resolution, and how it may affect the corresponding interested party, whether the act is unconstitutional per se, or whether it entails a violation of constitutional rights, or whether there are legal rights that are affected by it.
Data retention, interception and use
47 Interception and data protection Do any special rules require operators to assist government in certain conditions to intercept telecommunications messages? Explain the interaction between interception and data protection and privacy laws.

Under the Federal Telecommunications Law, concessionaires of public telecommunications networks must keep a separate record about their users, containing at least: he name and type of telephone line (pre-payment or t post-payment); ull name, domicile, nationality, telephone number and any other f data provided in an official ID with a photo, an updated proof of domicile of the user, as well as an impression of a fingerprint (printed or electronic); and oncerning companies or entities, in addition to the applicable c data described in the second item above, concessionaires must register the name and taxpayers number of the corresponding company, as well as documents evidencing the powers of attorney of the person signing on behalf of such company. Concessionaires must also keep, for a period of 12 months, records and control over communications that are conducted from any type of telephone line using numbering, that may allow the identification of: the type of communication; he necessary data to search and identify the origin and destinat tion of such communication; he data required to determine the date, time and duration of the t communication; he date and time when service was activated and the location t tag; and he digital location of the geographic positioning of the corret sponding telephone lines. Concessionaires must deliver information to the federal attorney general or to the relevant state attorney general in the event of investigations for criminal offences including extortion, threats, kidnapping or any serious criminal offence or any conduct related to organised crime. More generally, in terms of the Data Protection Law, there is an obligation to retain customer data for as long as the corresponding private party agrees to it, in the understanding that the private party may cancel the authorisation to use his or her data, or may request limits to its distribution or changes to such data. Disclosure obligations derive from judicial orders duly issued by competent judicial authorities. In addition, according to the Commerce Code commercial entities must keep, for a term of 10 years, the originals of letters, data messages or any other document stating agreements, covenants or commitments that create rights and obligations.
49 Unsolicited communications Does regulation prohibit unsolicited communications (eg, by e-mail, SMS)? Are there exceptions to the prohibition?

As a general rule, under the Federal Criminal Code it is a criminal offence to intervene (or intercept) private communications without a judicial order issued by a competent judicial authority. The Telecommunications Law in turn, states that information transmitted by means of a telecommunications network or services shall be confidential, except for public information or except upon a judicial order. When a judicial order for such purposes is issued, operators are bound to assist in those procedures, by providing the information so requested. Concessionaires must deliver information to the federal attorney general or to the relevant state attorney general, in the event of investigations for criminal offences including extortion, threats, kidnapping or in any serious criminal offence or any conduct related to organised crime. Data protection is regulated by the Data Protection Law. Such law sets forth the rules to protect personal data held by individuals and private companies to ensure the safeguarding of privacy rights and informational self-determination. Concessionaires are bound, in general, by this law. Under the Data Protection Law, individuals and companies holding personal information of third parties, must set up a series of measures to ensure the protection and due management of such data. Individuals and companies who hold data must give a privacy notice to third parties to commit to the protection of such data, describe the mechanisms set forth for these purposes, and outline the scope within
www.gettingthedealthrough.com

Under the Consumer Protection Law, the user or consumer may request not to be disturbed at his or her domicile or workplace or via e-mail or any other means, for the purposes of being offered goods, products or services, or to receive publicity. The Consumer Protection Agency keeps a public registry of those consumers who do not

319

mexico
want their information be used for marketing or publicity purposes, and consumers may communicate their request to be registered on it in writing (including via e-mail) to the Consumer Protection Agency. Service providers, including telecommunications and broadcasting operators shall not use information normally used for marketing and publicity purposes for any other purpose. Regarding SMS, the Federal Telecommunications Commission has issued resolutions setting forth provisions to avoid spam or mass unsolicited messages or mass publicity. Mass messages shall only be permitted in emergency cases such as earthquakes, natural disasters or as required for reasons of national security or public interest.
Competition and merger control
50 Competition and telecoms and broadcasting regulation What is the scope of the general competition authority and the sectoral regulators in the telecoms, broadcasting and new media sectors? Are there mechanisms to avoid conflicting jurisdiction? Is there a specific mechanism to ensure the consistent application of competition and sectoral regulation? Are there special rules for this sector and how do competition regulators handle the interaction of old and new media?

Greenberg Traurig, Sc

Update and trends

The Telecommunications Commission has postponed the discussion and resolution of changes to the Transition to Digital Terrestrial Television Policy. This raises the question as to when the analogue switch-off will actually happen. In 2007, the Supreme Court resolved an unconstitutional action brought against certain amendments to the Radio and Television Law. The Supreme Court set forth certain legal guidelines regarding a number of topics in the broadcasting and in the telecommunications realm in general, including the terms for which concessions would be granted, the process and legal requirements to renew concessions, the methodology to select the winner of a public auction for a broadcasting concession, among other topics. The Mexican Congress has not addressed such guidelines yet.

52 Jurisdictional thresholds for review What are the jurisdictional thresholds and substantive tests for regulatory or competition law review of telecoms sector mergers, acquisitions and joint ventures? Do these differ for transactions in the broadcasting and new media sector?

As described above, the Ministry of Communications is in charge of planning, formulating and conducting policies and programmes in the telecommunications arena. The Federal Telecommunications Commission regulates, promotes and supervises the efficient development and broad social coverage of telecommunications and broadcasting services in Mexico, and has full autonomy to render its decisions. It may not impose sanctions on operators; it may only recommend that the Ministry of Communications impose sanctions. The Federal Competition Commission prevents, investigates and combats monopolies, monopolistic practices and concentrations pursuant to the Federal Competition Law in any economic activity and sector, including telecommunications and broadcasting. The Federal Competition Commission is a devolved administrative body from the Ministry of Economy, with technical and operative autonomy. The Federal Competition Commission has autonomy to make its decisions. The Federal Competition Commission has a specific role in different procedures and situations deriving from telecommunications, broadcasting and competition regulation. Any pronouncement regarding antitrust considerations, opinions, investigations, resolutions and declarations of substantial power in the relevant market, among other procedures, needs to be issued by the Federal Competition Commission for the Federal Telecommunications Commission or the Ministry of Communications to act upon it.
51 Competition law in the telecoms and broadcasting sectors Are anti-competitive practices in these sectors controlled by regulation or general competition law? Which regulator controls these practices?

Both the Telecommunications Law and the Radio and Television Law set forth pro-competition principles. However, competition in general is regulated by the Federal Competition Commission under the Federal Competition Law, which investigates and penalises anticompetitive practices in the telecommunications and broadcasting sectors. In addition, under the Telecommunications Law, the Federal Telecommunications Commission may impose specific regulations and obligations regarding tariffs and quality of service and information to operators that are found by the Federal Competition Commission to be economic agents with substantial power in the relevant market.

Economic thresholds for competition review of telecoms sector mergers, acquisitions and joint ventures are the same for the broadcasting and media sectors as in any other sector, in terms of the Federal Competition Law. Under the Federal Competition Law, concentrations are defined as any merger or acquisition of control, or any act by means of which companies, associations, shares, ownership interests, trusts or any assets are accumulated, whether such acts take place between or among competitors, suppliers, clients or any other economic agents. The Federal Competition Law provides that only certain concentrations need to be filed for authorisation to the Federal Competition Commission before such transactions are consummated, provided that such transactions surpass any of the following monetary thresholds and qualify when an act or acts: egardless of where they take place, involve in Mexico (either r directly or indirectly) an amount that is higher than the equivalent of 18 million times the general minimum wage in the Federal District of Mexico; mply the accumulation of 35 per cent or more of the assets or i shares of an economic agent whose assets in Mexico or whose annual sales volume in Mexico amounts to more than the equivalent of 18 million times the general minimum wage in the Federal District of Mexico; or mply an accumulation in Mexico of assets or equity that exceeds i the equivalent of 8.4 million times the general minimum wage in the Federal District of Mexico; and the transaction involves two or more economic agents whose assets or annual sales volume, whether jointly or separately, amount to more than 48 million times the general minimum wage in the Federal District of Mexico.
Other
53 Merger control authorities Which regulatory or competition authorities are responsible for the review of mergers, acquisitions and joint ventures in the telecoms, broadcasting and new media sectors?

Regarding regulatory approvals, concession titles require concessionaires to give notice to the Ministry of Communications when a transfer of more than 10 per cent of the stock or equity interests of their capital stock is intended, in order for the Ministry of Communications to object to it or allow for the execution of such transfer of stock or equity interests.

320

Getting the Deal Through Telecoms and Media 2012

Greenberg Traurig, SC
The Federal Competition Commission is responsible for the review of mergers, acquisitions, joint ventures and any other concentration in the telecoms, broadcasting and new media industries, as well as in any other industry.
54 Procedure and timescale What are the procedures and associated timescales for review and approval of telecoms and broadcasting mergers, acquisitions and joint ventures?

MexiCo
Review before the Federal Competition Commission entails a notification that must be filed before the proposed transaction is consummated. In general terms, the Federal Competition Commission has 35 business days to issue its resolution, from the date when any required information for the filing is delivered to the Federal Competition Commission. In exceptionally complex cases, the president of the Federal Competition Commission may extend the term in order for it to issue a resolution up to 40 business days. Under certain circumstances and upon compliance with certain requisites set forth in the Federal Economic Competition Law which evidence that it is known that the transaction does not have the purpose or effect to undermine, damage or impede competition and free concurrence to the relevant market, the Federal Competition Commission may resolve the matter within 15 business days.

The Ministry of Communications has 90 days to object to the notice given by the concessionaire regarding a potential transfer of at least 10 per cent of the stock or equity interests representing its capital stock.

Greenberg Traurig, SC
Bertha Alicia Ordaz Avils Octavio Lecona-Morales Paseo de la Reforma 265 PH1 Col Cuauhtmoc CP 06500 Mexico City Mexico ordazb@gtlaw.com leconao@gtlaw.com Tel: + 52 55 5029 0000 /5020 0029/5029 0024 Fax: + 52 55 5029 0002 www.gtlaw.com

www.gettingthedealthrough.com

321

Annual volumes published on:

Licensing Air Transport Life Sciences Anti-Corruption Regulation Merger Control Arbitration Mergers & Acquisitions Banking Regulation Mining Cartel Regulation Oil Regulation Climate Regulation Patents Construction Pharmaceutical Antitrust Copyright Private Antitrust Litigation Corporate Governance Private Equity Corporate Immigration Product Liability Dispute Resolution Product Recall Dominance Project Finance e-Commerce Public Procurement Electricity Regulation Real Estate Enforcement of Foreign Judgments Restructuring & Insolvency Environment Right of Publicity Franchise Securities Finance Gas Regulation Shipping Insurance & Reinsurance Tax on Inbound Investment Intellectual Property & Telecoms and Media Antitrust Trademarks Labour & Employment For more information or to Vertical Agreements

purchase books, please visit: www.GettingTheDealThrough.com For more information or to purchase books, please visit: www.GettingTheDealThrough.com

The Official Research Partner of the International Bar Association

Strategic research partners of the ABA International section

telecoms and media 2012 issn 1471-0447