Mexico Takes on Monopolies

Many major Mexican industries -- telecommunications, corn and cement, to name a few -- are dominated by monopolies or oligopolies that have survived unfavorable World Trade Organization rulings and repeated government promises to topple them.

The story is no different on television, where Grupo Televisa SA and rival TV Azteca dominate the small screen and have kept competitors at bay while building business empires that hold record labels, radio stations and professional soccer teams.

President Felipe Calderon took office Dec. 1 pledging to do what others before him did not: Open the economy to more competition, lower consumer prices and create more jobs. So far, he has done little to achieve that goal, but the Supreme Court decisions -- ratified on Thursday -- could give his administration the boost it needs to take action.

Supreme Court rulings in the past have failed to take a strong stance against monopolistic practices.

"This is a very clear example that they are willing to get involved in ensuring competition," said John Ackerman, a professor with a legal research institute at Mexico's National Autonomous University.

Mexicans were outraged when Congress approved legislation dubbed the "Televisa Law" last year, giving away bandwidth for new television, Internet and telephone services exclusively to the two media giants without bids or compensation to the government. It also automatically renewed their existing concessions for 20-year periods, blocking competition for decades.

The law was passed swiftly by both houses of Congress and took effect in April 2006. But some legislators later appealed the measure to the Supreme Court, saying pressure and influence from broadcasters in the period leading up to last July's presidential election played a role in its quick approval.

"Televisa and TV Azteca felt the need to write a law that assured their dominance, and that is why this is a shining example of the court standing up and exercising its role within the division of powers in Mexico," Ackerman said.

The series of rulings won't immediately change who produces television soap operas or radio news programs because Televisa, which controls 70 percent of the media market in Mexico -- and much of the Spanish language programming in Latin America and the U.S. -- has concessions here that won't expire for another 14 years.