OP-ED: Mexico’s Lucky to Have Just One Man Blocking Internet Equality. We’ve Got a Bunch

Wired, 5/13/2013

Loud laughter greeted Slim’s early remarks, and within a few minutes a major nonviolent protest erupted: kazoo-playing audience members trooped around the giant hall and left the building after flinging multicolored pieces of monopoly money into the air.

What was printed on that money? It bore the legend “$73 Billion Net Worth By Price Gouging & Overcharging.” And that’s when I realized that this moment represented a turning point: Monopoly communications industry behavior may finally become socially interesting in America. There are just a few steps between what’s happened in Mexico and what’s going on here in the United States.

Read more…

Can reform save Mexico’s oil industry?

Smart Planet, 3/27/2013

Mexico owns a gold mine of oil, much of it just out of its reach. The country’s national oil monopoly, Petroleos Mexicanos, lacks the technology and expertise to drill the deep waters of the Gulf of Mexico, where its latest oil finds lie. Historically, its hands have been tied: A prohibition on foreign partnerships and inadequate reinvestment in the business have prevented the company known best as Pemex from venturing beyond its shallow fields into the deep.

But the energy reform currently under debate could change that, opening Mexico’s oil sector to foreign investment –- if the new government can amass the legislative support it needs and surmount substantial public opposition.

Read more…

Carlos Slim Praises Mexican Telecom Reform Despite Challenge To His Number One Billionaire Status

Forbes, 3/18/2013

Tycoon Carlos Slim, who is in danger of losing his title as the world’s richest man,  praised the new monopoly-busting telecom legislation proposed by the Mexican government despite the fact that it has significantly reduced his net worth.

“This telecommunications law addresses the importance of broadband and of having more penetration…   Therefore, without a doubt,  it coincides with everything this commission has sought: universal service, better prices, higher speeds and convergence,”  Slim said  following the  inauguration of the Seventh meeting of the United Nations Broadband Commission for Digital Development in Mexico City March 17.  It was the first time Slim personally addressed the bill since it was proposed on March 11.

Read more…

Mexico’s road to economic sanity

Fortune, 3/15/2013

With a bill introduced by the president and backed by all three political parties, Mexico is poised to take on a few of the country’s biggest monopolies and moguls. But for Mexico to truly engage in economic competition, it needs to do much more.

A lack of competition pervades the Mexican economy, as one or a few companies dominate sectors as diverse as glass, cement, flour, soft drinks, sugar, and tortilla flour, not to mention the state’s control of energy and electricity. This hits consumers’ bottom lines — an OECD study estimates that it increases the costs of basic goods for households by some 40%. It hurts Mexico’s working and middle classes the most, as they must spend a larger proportion of what they earn on these goods and services. It also hits the burgeoning manufacturing sector, which has to pay more for raw materials and basic inputs.

Read more…

Mexico’s leftist opposition rallies against energy reforms

Reuters, 3/17/2013

Waving party flags and shouting their support, tens of thousands of leftist party members rallied on Sunday against government plans to overhaul Mexico’s energy sector, a preview of the tough road ahead for President Enrique Pena Nieto’s reform push. Organized by the leftist Party of the Democratic Revolution, or PRD, the rally took place on the eve of the 75th anniversary of the nationalization of the country’s oil industry, the historical pivot that gave birth to state oil monopoly Pemex.

Speakers denounced any move to privatize the government-run oil giant, even though Pena Nieto and other members of his centrist Institutional Revolutionary Party, or PRI, have consistently denied any plans to sell or privatize Pemex. “We are being loyal to this historical legacy that has given our oil riches to the nation and we are going to defend it with everything we’ve got,” said Jesus Zambrano, the PRD’s national president, to rousing applause.

Read more…

Mexico Goes After Its Monopolies

The Wall Street Journal, 3/11/2013

The monopoly powers of two of Mexico’s richest businessmen, one being Carlos Slim, are coming under fire with a broad set of new laws that aim to open up the telecommunications and television businesses to competition.

The plans, announced on Monday by the president, are aimed principally at Mr. Slim’s telephone giant, América Móvil SAB, and Mexico’s leading broadcaster, Grupo Televisa TLEVISA.MX , which each control 70% of their respective markets. The proposal calls for the creation of a new telecommunications regulator that would be able to order asset sales by companies that dominate a market, and limit companies’ ability to stall competition through endless litigation.

Read more…

Will Mexico’s Proposed New Telecom Law Affect Slim’s ‘World’s Richest Man’ Status?

Forbes, 3/11/2013

Mexico’s President Enrique Peña Nieto and the country’s major political parties sent Congress a far reaching telecommunications reform law that, if approved, will crack down on monopolies, a shift in policy that could affect Carlos Slim’s status as the richest man on the planet.  Slim’s America Movil (NYSE: AMX), which controls 70% of Mexico’s wireless market and approximately 80% of landlines,  is the largest telecommunications network in Latin America and remains his most valuable holding, accounting for $36.3 billion of his net worth on FORBES most recent Billionaires List.  In 2012, America Movil generated $16 billion in revenues.

The purpose of the reform, which was drafted by Mexico’s three major parties –Peña Nieto’s PRI, as well as the PAN and PRD —  is to broaden competition by ending monopolistic practices in the telephone and television industries, currently dominated by a small handful of Mexico’s richest people. At the outset of the Peña Nieto administration in December, the parties agreed to the so-called  Pact for Mexico with the goal of jointly pushing for a series of wide-ranging economic reforms in education, telecommunications and energy.

Read more…

Carlos Slim And Mexico’s Digital Divide

Fronteras, 3/6/2013

Around 17 percent of individuals can access the Internet in their homes. For an economy of its size, this digital divide is stark among its neighbors in the region. In Brazil, the region’s largest economy, 38 percent can access internet from their home. The name Carlos Slim might be fresh on American minds — he was just named by Forbes the richest person on the planet. And critics claim the main source of his exuberant $73 billion fortune is a large factor in the Mexico digital divide.

A headline to think about: If Billionaire Carlos Slim Were a Country, He’d Be the 8th Richest in Latin America. His fortune is based in telecommunication. He owns the monopoly América Móvil (Telmex), which in 2012, it still controlled 80 percent of Mexico’s landlines and 75 percent of its broadband connections.

Read more…

Mexico’s Energy Reform Drawing Interest in Texas

The Texas Tribune, 3/6/2013

The Mexican ruling party’s recent decision to adopt a platform that could open up the country’s giant oil monopoly to private investment has caught the attention of some industry gurus in Texas, who say the move bodes well for U.S. business interests.

The Institutional Revolutionary Party, or PRI, remains adamant that the state-owned company, Petróleos Mexicanos, or PEMEX, will stay under state control. But the proposal, which requires legislative approval, could mean more oil is exported from Mexico to the U.S., and that Mexico might turn to Americans for guidance on how to increase production there.

Read more…

IVA and Oil Reform – The Expert Take

By Duncan Wood, 3/4/2013

Last Saturday’s vote by the PRI party to change its statutes to allow for the application of the value added tax (IVA) to food and medicine, and to allow for increased private participation in the oil sector, significantly improves the prospects for the reform process under Enrique Peña Nieto. This marks an important victory for the reformers within the party, and is a sign that the government now faces minimal internal party divisions that could hold back the reform process. Although much bargaining and negotiation remains with the other parties, the fact that Peña Nieto can now move ahead to talk meaningfully with the other parties in Congress with a united party behind him strengthens his bargaining position.