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Mexico's lower house of Congress passes tough telecom laws aimed at fomenting more competition

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MEXICO CITY - The lower house of Mexico's Congress approved tough restrictions on dominant companies in the country's telephone and television sectors early Wednesday after 20 hours of debate and discussion.

The new rules must still be signed into law, but they have already forced the nation's leading telephone carrier to offer to sell off part of its business.

The lower house passed the enabling legislation on a 318-107 vote; it imposes fee limits and infrastructure-sharing requirements on any company that controls more than half the market in sectors like telephones, Internet or television.

The rules were already passed by the Senate, but must still be signed into law by President Enrique Pena Nieto, whose party supports the measures. They give teeth to Mexico's 2013 telecom reforms.

Billionaire Carlos Slim's America Movil phone company announced Tuesday that it will sell off unspecified assets and businesses to get the company below the 50 per cent limit.

Under the telecom reform rules, companies judged to have "preponderant" market positions face limits on how much and who they can charge, what fields they can enter and what kind of exclusivity arrangements they can make.

For example, Slim's mobile and fixed-line telephone carriers — which control 70 and 80 per cent of their respective markets — would have to provide free interconnection for competing carriers, could not charge long-distance fees and would have to share infrastructure with competitors. The rules also include bans on exclusive broadcast rights to sporting events.

Mexico is poised to auction off rights for new television networks soon, and Slim's companies have long voiced a desire to offer "triple play" or convergence services, such as a bundle of TV, Internet and telephone services.

Analysts have said the reform as written will have the biggest impact on the holdings of Slim, who is one of the world's richest men. But the rules also include regulation of advertising on radio and television, and fines of up to 10 per cent of revenue for companies in violation.

Slim's companies did not say who they planned to sell the assets to, or at what price. Nor is it clear whether the firms could escape all of the restrictions even with a sale.

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