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 Business News | June 2007 
Ruling Hits 2 Media Giants
 Marla Dickerson & Carlos Martinez
| | Mexico's high court nullifies parts of a law that would have helped solidify TV Azteca's and Televisa's control. |
Mexico City — Mexico's Supreme Court on Thursday struck down key provisions of a controversial media law crafted in large part by the nation's two dominant TV broadcasters.
The court's action could help pry open Mexico's broadcasting market, one of the least competitive in Latin America outside of communist Cuba. And it could embolden Mexico's government to rein in other business titans that control key sectors of this nation's economy.
Thursday's proceedings formally ratified a string of preliminary decisions announced by the court over the last week. The justices rejected large swaths of the media legislation, dubbed the "Televisa Law" by critics because it was largely authored by lawyers from Grupo Televisa and TV Azteca. Together, the two broadcasters control 95% of Mexico's TV stations and virtually all of the industry's advertising revenue.
In a series of stinging rebukes, the justices found several provisions to be unconstitutional because they would discriminate against competitors and would cement the two companies' market dominance. Those provisions would have granted Televisa and TV Azteca 20-year concessions, with renewal virtually guaranteed, and given them new digital bandwidth without having to compete or pay for the public spectrum.
"For the state to give away the broadcasting spectrum required to uphold the fundamental rights of freedom of expression … is unconceivable in a democracy," Justice Genaro Góngora said Tuesday.
A representative for TV Azteca declined to comment on Thursday's ruling. Televisa did not respond to requests for comment. The companies in the past have defended the legislation as a much-needed modernization of Mexico's media laws that would promote competition, innovation and transparency.
Court watchers hailed the decision as a rare check on the power of one of Mexico's most formidable corporate tandems — and a glimmer of hope for uprooting other entrenched monopolies that economists say are stifling job creation and economic growth here.
Most of the 10 Mexican billionaires on Forbes' list of the world's richest people made their fortunes in industries where there is little competition in Mexico. Those include broadcasting, telecommunications, banking and brewing.
Mexican President Felipe Calderon has talked of the urgency of increasing competition. But he has shown little appetite for taking on Mexico's powerful business interests, particularly the nation's broadcasters, which have used their news programs to attack their critics.
Analysts said they hoped the ruling would inspire Calderon and other officials to be guided by principle rather than fear.
"The Supreme Court has just handed him an opportunity to … demonstrate some political courage," said political analyst Denise Dresser, a columnist for the newspaper Reforma. "This is going to be a defining challenge for President Calderon."
Mexico's legislature approved the broadcasting legislation last year in the midst of a tight presidential race. Most Mexicans get their news from broadcast television, making it a crucial vehicle for reaching voters. Legislators have acknowledged intense pressure within their own parties to approve the measure out of fear that their candidates would be denied TV coverage.
"They were incapable of confronting the pressure … the intimidation of those that control the screens and the microphones," said political analyst Jesús Silva Herzog-Márquez, a law professor at the Autonomous Technological Institute of Mexico. The broadcasters have denied using threats or pressure tactics to sway lawmakers.
Speedy passage of the law provoked street protests. An angry mob pummeled a lawmaker who was instrumental in getting it approved. Then-President Vicente Fox refused to veto the legislation, which motivated dissenting lawmakers to challenge its constitutionality.
Media expert Raul Trejo Delarbre said the high court's ruling paves the way for a new round of broadcasting reform that could lead to more independent oversight of the industry and make it easier for new competitors to gain a foothold. That would be welcome news for players such as U.S. Spanish-language broadcaster Telemundo, which has been trying for years to crack the Mexican market without success. Silva called the ruling "historic" and "crucial for the democratic life of the country."
But one would never know it from watching Televisa, which controls two-thirds of the nation's TV stations and four of Mexico's six national channels. It made no mention of the ruling in its main afternoon news program, devoting time instead to a hepatitis outbreak in southern Mexico and damage to a coral reef in Cancun.
marla.dickerson@latimes.com - carlos.martinez@latimes.com |
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