World Wires

Monopolies hold back Mexico's economy with high prices, poor service

 

McClatchy Newspapers

Televisa’s power among legislators is so great that political scientists refer to its “capture” of the legislature through nearly 20 lawmakers who do its bidding.

“They capture not only the legislative process but the whole political process at election time,” said Alejandro Castaneda, a Stanford-trained economist at the Colegio de Mexico, a Mexico City research institute.

Critics are angry at what they say is Televisa’s open support of Enrique Pena Nieto, the 45-year-old former governor who’s seeking to return the PRI to Los Pinos, the presidential palace.

“He’s made trips abroad and they’ve given him coverage like he’s already head of state,” said Calvillo, the consumer activist.

Regulators recently opened the door to creating a third national television network, perhaps within three years. As much as $1 billion may be needed to launch a new competitor, and some experts say it will have to claw hard to survive. Azcarraga says he doesn’t oppose a new network but he wants regulators to approve his investment in a small mobile competitor, Iusacell, to compete with Slim.

“It’s big elephants fighting one another,” Garcia said.

Closely watching are anti-trust officials, who won expanded powers last year that include the right to impose criminal penalties for price-fixing and to issue fines for absolute monopolistic practices equal to 10 percent of a company’s annual sales, up from a previous cap of $7.2 million.

Even so, those officials face periodic attempts at intimidation, including getting tailed by beefy unidentified men or finding packages on their desks.

“A couple of times, we got tapes of our phone conversations,” said Flores-Roux, a former chief of staff to the minister of communications and transport. “Where did they come from? I don’t know. So you get scared.”

Wary of the power of the monopolies, politicians rarely get behind trust-busting campaigns, though they do occur occasionally.

“We have the king of copper. We have the king of bread. We have the king of cement. We have the king of telecommunications. Call them kings or feudal lords. That’s what we have,” said Carpinteyro, the former undersecretary who’s now running for a congressional seat on a leftist coalition ticket. “There is no other action to take than to break up these companies.”

Flores-Roux voiced reservations, saying it’s easier said than done.

“It sounds like a no-brainer. But it’s very hard to do when these vested interests fight competition,” he said.

Email: tjohnson@mcclatchydc.com; Twitter: @timjohnson4

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