CHAMBERS Global Practice Guides MEXICO...

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MEXICO LAW & PRACTICE: p.3 Contributed by RM Abogados, S.C. e ‘Law & Practice’ sections provide easily accessible information on navigating the legal system when conducting business in the jurisdic- tion. Leading lawyers explain local law and practice at key transactional stages and for crucial aspects of doing business. TRENDS & DEVELOPMENTS: p.215 Contributed by Ríos-Ferrer, Guillén-Llarena, Treviño y Rivera S.C. e ‘Trends & Developments’ sections give an overview of current trends and developments in local legal markets. Leading lawyers ana- lyse particular trends or provide a broader discussion of key develop- ments in the jurisdiction. DOING BUSINESS IN MEXICO: p.218 Chambers & Partners employ a large team of full-time researchers (over 140) in their London office who interview thousands of clients each year. is section is based on these interviews. e advice in this section is based on the views of clients with in-depth international experience. BRAZIL LAW & PRACTICE: p.<?> Contributed by Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga e ‘Law & Practice’ sections provide easily accessible information on navigating the legal system when conducting business in the jurisdic- tion. Leading lawyers explain local law and practice at key transactional stages and for crucial aspects of doing business. TRENDS & DEVELOPMENTS: NATIONAL: p.<?> Contributed by Campos Mello Advogados e ‘Trends & Developments’ sections give an overview of current trends and developments in local legal markets. Leading lawyers ana- lyse particular trends or provide a broader discussion of key develop- ments in the jurisdiction. TRENDS & DEVELOPMENTS: NORTH EAST: p.<?> Contributed by Queiroz Cavalcanti Advocacia e ‘Trends & Developments’ sections give an overview of current trends and developments in local legal markets. Leading lawyers ana- lyse particular trends or provide a broader discussion of key develop- ments in the jurisdiction. DOING BUSINESS IN BRAZIL: p.<?> Chambers & Partners employ a large team of full-time researchers (over 140) in their London office who interview thousands of clients each year. is section is based on these interviews. e advice in this section is based on the views of clients with in-depth international experience. CHAMBERS Global Practice Guides Mexico – Law & Practice Contributed by RM Abogados, S.C. 2016 TMT

Transcript of CHAMBERS Global Practice Guides MEXICO...

Page 1: CHAMBERS Global Practice Guides MEXICO BRAZILrmlaw.com.mx/documentos/chambers-global-practice-guide.pdfGeneral Structure of TMT Regulation and Ownership p.5 1.2 Government Ministries,

MEXICO

LAW & PRACTICE: p.3Contributed by RM Abogados, S.C.

The ‘Law & Practice’ sections provide easily accessible information on navigating the legal system when conducting business in the jurisdic-tion. Leading lawyers explain local law and practice at key transactional stages and for crucial aspects of doing business.

TRENDS & DEVELOPMENTS: p.215Contributed by Ríos-Ferrer, Guillén-Llarena, Treviño y Rivera S.C.

The ‘Trends & Developments’ sections give an overview of current trends and developments in local legal markets. Leading lawyers ana-lyse particular trends or provide a broader discussion of key develop-ments in the jurisdiction.

DOING BUSINESS IN MEXICO: p.218

Chambers & Partners employ a large team of full-time researchers (over 140) in their London office who interview thousands of clients each year. This section is based on these interviews. The advice in this section is based on the views of clients with in-depth international experience.

BRAZIL

LAW & PRACTICE: p.<?>Contributed by Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga

The ‘Law & Practice’ sections provide easily accessible information on navigating the legal system when conducting business in the jurisdic-tion. Leading lawyers explain local law and practice at key transactional stages and for crucial aspects of doing business.

TRENDS & DEVELOPMENTS: NATIONAL: p.<?>Contributed by Campos Mello Advogados

The ‘Trends & Developments’ sections give an overview of current trends and developments in local legal markets. Leading lawyers ana-lyse particular trends or provide a broader discussion of key develop-ments in the jurisdiction.

TRENDS & DEVELOPMENTS: NORTH EAST: p.<?>Contributed by Queiroz Cavalcanti Advocacia

The ‘Trends & Developments’ sections give an overview of current trends and developments in local legal markets. Leading lawyers ana-lyse particular trends or provide a broader discussion of key develop-ments in the jurisdiction.

DOING BUSINESS IN BRAZIL: p.<?>

Chambers & Partners employ a large team of full-time researchers (over 140) in their London office who interview thousands of clients each year. This section is based on these interviews. The advice in this section is based on the views of clients with in-depth international experience.

CHAMBERSGlobal Practice Guides

Mexico – Law & Practice

Contributed by RM Abogados, S.C.

2016

TMT

Page 2: CHAMBERS Global Practice Guides MEXICO BRAZILrmlaw.com.mx/documentos/chambers-global-practice-guide.pdfGeneral Structure of TMT Regulation and Ownership p.5 1.2 Government Ministries,

MEXICO

LAW & PRACTICE: p.3Contributed by RM Abogados, S.C.

The ‘Law & Practice’ sections provide easily accessible information on navigating the legal system when conducting business in the jurisdic-tion. Leading lawyers explain local law and practice at key transactional stages and for crucial aspects of doing business.

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Law & PracticeContributed by RM Abogados, S.C.

cONteNtS1. General Structure of TMT Regulation and

Ownership p.51.2 Government Ministries, Regulatory Agencies

and Privatised Entities p.71.3 Developing Rules and Adopting Policies p.81.4 Ownership of Telecoms Media Technology

Industries p.81.5 Limits on Participation p.81.6 Restrictions on Foreign Ownership or Investment p.81.7 World Trade Organization Membership p.81.8 Appellate Process p.81.9 Annual or Recurring Fees p.9

2. Broadcasting/Media p.92.1 Important Companies p.92.2 Requirements for Obtaining a Licence

/Authorisation to Provide Services p.92.3 Typical Term for a Licence/Authorisation to

Provide Services p.102.4 Transfer of Licences/Authorisations to Other

Entities p.102.5 Spectrum Allocation p.102.6 Restrictions on Common Ownership p.102.7 Content Requirements and Regulations p.112.8 The Difference in Regulations Applicable to

Broadcasting Versus Cable p.112.9 Transition from Analogue to Digital

Broadcasting p.112.10 Extent to which Local Government

Regulation is Pre-Empted p.12

3. Telecoms p.123.1 Important Companies p.123.2 Requirements for Obtaining a Licence/

Authorisation to Provide Services p.123.3 Transfer of Telecoms Licences/Authorisations to

other Entities p.123.4 Regulations for Network-to-Network

Interconnection and Access p.133.5 Accounting, Functional and Legal Separation p.13

3.6 Provisions for Access to Public and Private Land p.133.7 Rules which Govern the Use of Telephone

Numbers p.133.8 Regulation of Retail Tariffs p.143.9 Rules to Promote Service in Underserved Areas p.143.10 Extent to which Local Government

Regulation of Telecom Service is Pre-Empted p.14

4. Wireless p.144.1 Important Companies p.144.2 General Requirements for Obtaining a Licence

/Authorisation to Provide Wireless Services p.144.3 Transfer of Wireless Licences/Authorisations to

Other Entities p.144.4 Spectrum Allocation p.144.5 Procedures to Identify and Assign Spectrum

Among Competitors p.144.6 Unlicensed Spectrum Uses p.144.7 Government Policy/Regulation to Promote

Next Generation Mobile Services p.144.8 Price Regulation for Mobile Services p.154.9 Regulation of Government and Commercial

Wireless Uses p.154.10 Extent to which Local Government Regulation

of Wireless Service is Pre-Empted p.15

5. Satellite p.155.1 Important Companies p.155.2 General Requirements for Obtaining a Licence

/Authorisation to Provide Satellite Service p.155.3 Transfer of Satellite Licences/Authorisations to

other Entities p.155.4 Spectrum Allocation to Satellite Service p.165.5 International Telecommunication Union

Membership p.165.7 Milestone and Due Diligence Deadlines p.16

6. Internet/Broadband p.166.1 Important Companies p.166.2 Regulation of Voice Over IP Services p.16

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6.3 Interconnection and Access Regulatory Conditions to IP-Based Networks p.16

6.4 Net Neutrality Requirements p.166.5 Government Regulation of Internet/Broadband p.166.6 Over-the-Top Internet-based Providers p.166.7 Extent that Local Government Regulation of

Internet/Broadband Service is Pre-Empted p.17

7. Privacy p.177.1 Government Access to Private Communications p.177.2 Use of Encryption Technology p.177.3 Liability of TMT Companies for Content

Carried Over Their Networks p.177.4 Obligation of TMT Companies to Block

Access to Certain Sites or Content p.177.5 Obligation of TMT Companies to Retain

Customer Data p.177.6 Prohibition of Unsolicited Communications p.17

8. Future p.178.1 Status and Process of Convergence p.178.2 Changes to Statutes, Laws or Legislation p.178.3 Changes to Government Ministries, Regulatory

Agencies or Privatised Entities p.178.4 Identification and Assignation of Additional

Spectrum p.18

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rM abogados, S.c. provides expert advice on telecommu-nications, broadcasting and IT, dealing with matters such as administrative, regulatory, corporate law and litigation. Members of the team have participated in spectrum auc-tions, of either microwave or fixed wireless and mobile

services, that have taken place since the opening of the Mexican telecommunications market to competition, and experience includes representation of a wide range of clients from public telephony to the provision of satellite services.

authorivan ruiz Moreno is a founding partner of RM Abogados, S.C. and has 20 years of experience in the field of corporate and commercial law in general regulated industries. He has served as a public official of the former Cofetel, legal direc-tor of licensees and permit holders telecommunications, member of the former Advisory Council of the COFETEL, parliamentary adviser and legal adviser to domestic and foreign companies during the last 12 years in areas such as telecommunications, broadcasting, corporate and contract

law, antitrust, regulation, spectrum auctions, administra-tive law and the electricity sector. He is a member of the Law Institute of Telecommunications, B.C. (IDET) of the Federal Communications Bar Association, the Association (FCBA) of International Petroleum Negotiators (AIPN) and has written several articles and participated in several conferences, forums and television and radio interviews on the telecommunications industry.

1. General Structure of tMt regulation and Ownership

Mexico’s telecommunications legal framework has gone through significant changes since 2013, when the Mexican Presidency (along with the three major political parties) de-cided to pass an act whereby several articles of the Mexican Constitution were amended in order to promote competi-tion in the Mexican Telecommunications and Broadcast sec-tors, as well as in the Mexican economy overall (hereinafter referred to as the “Act”).

The Act is the most relevant piece of regulation in the Mexi-can telecommunications and broadcast sectors of the last 20 years, since it clearly establishes that telecommunications services constitute “a public service,” which enables the exer-cising of human rights such as “the right to being informed” and “freedom of speech.”

That said, the Act incorporated in the Mexican Constitution several provisions that would normally belong within a law, but given the injunctions or amparos that incumbent opera-tors had successfully filed since the enactment of the former Federal Telecommunications Law in the year 1995, Mexican authorities did not want to run the same risk and therefore decided to include all new telecommunications, broadcast and antitrust provisions in the Mexican Constitution since injunctions cannot be filed against constitutional provisions themselves.

Among the most relevant sections of the Act there is:

•The recognition of telecommunications services as “public services” which means access must be guaranteed by the Mexican State;

•The mandate for the Mexican State to guarantee that tel-ecommunications services are provided in competition, quality, plurality, universal access, interconnection, conver-gence, continuity, liberty of access conditions and without arbitrary interference;

•The recognition of telecommunications services as a means for the exercise and access to human rights of freedom of speech and access to information;

•The immediate authorisation of full foreign investment in the telecommunications sector and up to 49% in the broadcast sector, the latter provided that reciprocal condi-tions are given in the country from which such investment comes from;

•The creation of Mexico’s Federal Telecommunications Institute (“IFT”) as a new telecommunications and eco-nomic competition authority in the telecommunication and broadcast sectors is made up of seven members who are appointed by the Mexican Senate (at the proposal of the Mexican president) and are elected for staggered terms of nine years and are independent from the Mexican execu-tive;

•The concentration of major powers in the telecommunica-tions and broadcast sectors in the IFT, including: the grant-ing and revoking of telecommunications and broadcast licenses, the imposition of fines, auctioning of spectrum, issuing regulation governing the telecommunications and broadcast sectors, concentration of all antitrust powers in the Mexican telecommunications and broadcast sectors (including the declaration of preponderant agents within the telecommunications and broadcast sectors), impos-ing asymmetric measures, determining relevant markets, declaring dominant participants within such markets and imposing dominance measures, plus acting as the exclusive authority in matters of economic competition in the Mexi-

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can telecommunications and broadcast sectors, among sev-eral others;

•Establishing “preponderance” as an ex-ante regulatory condition (similar to SMP in Europe) applicable to eco-nomic agents that have a participation of 50% or more in the broadcast or telecommunications sectors measured by users, subscribers, audience, network traffic or capacity used within their networks;

•Foreseeing the application of asymmetric measures on the preponderant agents including (as applicable) obliga-tions on information, offers, quality of service, exclusivity agreements, limitations to the use of terminal equipment between networks, rate and network asymmetry, network unbundling, as well as accounting, functional or structural separation;

•The creation of specialised federal courts with exclusivity over telecommunications and antitrust matters as a means to avoid forum shopping;

• Limiting to injunctions or amparo indirecto, and only against final resolutions, the legal recourse against the regulator’s decisions without the possibility of suspending the effect of such decisions;

• The establishment of “must carry” and “must offer” rights and obligations whereby broadcasters are obliged to allow the free retransmission of their signals through pay televi-sion systems and pay television operators are obliged to retransmit local broadcast signals within their networks;

•Foreseeing the installation and operation of a wholesale wireless nationwide network which shall:

(a) have the right to make use of 90MHz of the 700MHz frequency band, as well as the resources of the nationwide fibre optics network of Mexico’s govern-ment owned national power utility (CFE) and any other government owned assets;

(b) not be entitled to sell telecommunications services to end users but only to other carriers and MVNOs

(c) be set up through a public-private partnership; and start operating no later than 31 December 2018.

•The cancellation of domestic long distance billing as of 1 January 2015; and

•Setting the deadline of 31 December 2015 for Mexico to fully end its transition to digital terrestrial television.

Preponderance declarations and asymmetric measures.As part of article transitory article eight of the Act, Mexico’s new telecommunications and broadcast regulator (IFT) was given 180 calendar days (from the date of formation of the IFT) to declare preponderant economic agents in the telecommunications and broadcast sectors and impose the asymmetric measures necessary to avoid harm to competi-tion, market entry and with that, harm to the end users.

Such asymmetric measures may include, as applicable, ob-ligations related to information, offers, quality of service, exclusivity agreements, limitations to the use of terminal equipment between networks, asymmetric regulation in terms of rates and network infrastructure, including the unbundling of their essential elements, and in its case, the accounting, functional or structural separation of such pre-ponderant economic agents.

On March 6, 2014 IFT issued the resolutions whereby it de-clared Telcel (Radiomóvil Dipsa), Telmex, América Móvil, Grupo Carso and Inbursa bank as a preponderant economic agent in the telecommunications sector, whereas Grupo Tel-evisa along with companies and individuals related to it were declared as preponderant economic agent in the broadcast sector.

As part of its preponderance resolution for the Mexican tel-ecommunications sector, IFT imposed several asymmetric measures on the telecommunications preponderant eco-nomic agent, including:

•The obligation to publish public reference offers for: inter-connection, wholesale mobile services for MVNOs, dedi-cated access links, access to passive infrastructure of its fixed and wireless networks, domestic roaming and fixed network unbundling;

•The obligation to provide interconnection through the use of the IP protocol with universal access points for the ex-change of all kinds of traffic;

•The obligation to allow the national exchange of traffic through specific interconnection points;

•The obligation to provide interconnection links of different capacities, including STMs and Ethernet;

•The prohibition to impose domestic roaming charges to its users;

•The obligation to breakdown their user’s invoices with in-dication of the term remaining in their postpaid mobile service agreements and the breakdown of equipment and services charges; and

•The obligation to not discriminate content or applications within their networks, among several other asymmetric measures.

•The asymmetric measures mentioned above were later complemented by others established by Mexico’s Congress in the Federal Telecommunications and Broadcasting Law (“Law”) of July 2014, which include asymmetric measures that automatically apply to the PEA in the telecommunica-tions sector as well as a list of asymmetric measures that IFT may impose on such preponderant agent at the IFT’s discretion and as part of its mandate and powers.

•As it refers to the IFT’s preponderance resolution for the Mexican broadcast sector, IFT imposed several asymmetric measures on the broadcast preponderant economic agent, including:

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•Allowing other broadcasters to make use of the broadcast PEA’s passive infrastructure under non-discriminatory conditions;

•The obligation to publish a public reference offer to provide access to such passive infrastructure;

•The prohibition for the broadcast PEA to acquire exclu-sive rights for the transmission of Relevant Audiovisual Content (defined by the IFT) in any part of the Mexican territory;

•The prohibition to participate in audiovisual content pur-chase clubs unless specifically authorised by the IFT;

•The obligation to disclose its publicity services along with the rates and service conditions applicable to same; and

•The obligation to provide its publicity services under non-discriminatory conditions, among others.

Legal frameworkThe Act gave Mexico’s Congress 180 days to adjust Mexico’s legal framework to the new constitutional text, which was an extremely short term considering the complexity of the new laws.

Thus, Mexico’s new Telecommunications and Broadcasting Law (the “Law”) was not published until 14 July 2014; almost six months after the term established by the Act had expired.

The Law detailed many of the concepts included within the Act, and also included additional measures or conditions.

Some of the main conditions of the Law are:

•Creating a new licensing regime divided between conces-sions and authorisations;

•Allowing resellers of foreign satellite transmission and landing rights to operate under an authorisation rather than a concession as foreseen in the 1995 Mexican Tel-ecommunications Law;

•Defining interconnection along with the services that com-prise same;

•Specifically allowing broadcast multicast as well as spec-trum lease, both under the IFT’s prior authorisation;

•Including obligations on collaboration with justice and public security agencies including controversial conditions, such as the obligation to provide the real time location of a terminal and keep a register and control of the commu-nications made through any kind of line during a total of two years;

•Including a chapter on protection to consumers’ rights and granting Mexico’s Consumer Protection Agency and IFT concurring powers in that respect;

•Including a detailed catalogue of asymmetric measures that IFT may impose on preponderant and dominant agents;

•Including a series of asymmetric measures that apply to preponderant economic agents (“PEAs”) in the telecom-

munications sector, by way of law (that is without the IFT’s intervention), such as obliging such agents to:

(a) not charge different rates to their customers for on-net, off-net calls;

(b) not bill other carriers for termination of traffic within such agent’s networks;

(c) not charge other carriers service rates higher than its retail rates;

(d) not enter into exclusivity agreements for the pur-chase of terminals;

(e) not enter into exclusivity agreements with points of sale or distribution networks;

(f) register before IFT a list of unbundled interconnec-tion services;

(g) publish every year an interconnection reference offer;

(h) present separate accounting reports before IFT at least once a year; allow the sharing of rights of way; and

(i) have presence in internet exchange points.

•Changing Mexico’s telecommunications and broadcasting sanctioning regime from fines calculated through daily minimum wages to a percentage of the licensee’s annual revenue;

•The creation of a Public Telecommunications Registry which shall encompass a Public Registry on Concessions as well as a National Infrastructure Information System (not yet operational) which shall include geo referenced information on active and passive infrastructure as well as rights of way.

1.2 Government Ministries, regulatory agencies and Privatised entitiesMain regulatory agenciesMexico’s main regulatory agencies in the telecommunica-tions and broadcast sectors are: IFT, Mexico’s Federal Con-sumer Protection Agency and Mexico’s Ministry of Com-munications and Transports.

iFt IFT is an autonomous collegiate regulatory agency created through the Act, which is made up of seven commissioners that are chosen for five-year staggered terms through a com-plex proceeding that involves: (i) public examinations co-ordinated by an evaluation committee; (ii) the presentation to the Mexican President of the five candidates that obtained the highest grades; (iii) the Mexican President’s proposal to the Senate of a candidate chosen from the above mentioned group; and (iv) the Mexican Senate’s approval or rejection of the President’s designation proposal.

The Mexican Senate chooses IFT’s president for a four-year term, renewable on a single occasion.

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IFT holds most powers in the telecommunications and broadcast sectors as it is responsible for regulation and has exclusive powers over antitrust matters.

IFT has the constitutional mandate to promote the efficient development of broadcasting and telecommunications for which it shall be responsible for regulation, the promotion and supervision of the use, benefit and exploitation of spec-trum, networks and the provision of broadcast and telecom-munications services as well as access to active and passive infrastructure and other essential resources.

Mexico’s Federal consumer Protection agency Mexico’s Federal Consumer Protection Agency, better known for its acronym PROFECO, is mainly responsible for protecting consumer rights and attending to consumer complaints, including complaints over telecommunications service providers.

PROFECO has the power to file collective actions or lawsuits for violations against consumer rights.

Sct SCT is a ministry that reports directly to the Mexican Presi-dent and its powers were substantially reduced after the 2013 constitutional reform that transferred the SCT’s main pow-ers (such as the issuing or revoking of licences and the ap-plications of sanctions) to the IFT.

SCT is currently responsible for the representation of Mex-ico before foreign and international telecommunications agencies as well as for the management of universal access programs such as “México Conectado” and projects like the implementation of the wireless shared network in the 700MHz frequency band.

1.3 Developing rules and adopting PoliciesPursuant to the Law, IFT is responsible for developing and adopting general rules for the regulation of Telecom Media Technology industries.

As part of its regulation development process, IFT usually publishes its preliminary regulations or resolutions on its website for public discussion.

IFT does not answer to each observation although it nor-mally reviews all of them and may even meet with private parties to discuss them.

After the public consultation period, IFT publishes its reso-lutions on its website and in case of general regulations, these must also be published in Mexico’s Official Gazette or Diario Oficial.

At the time of writing, IFT was working on a document that would require it to evaluate the impact of any new regula-tion in order to avoid imposing bureaucratic burdens on regulated parties.

1.4 Ownership of telecoms Media technology industriesWith the exception of Telecomm (a public entity) and a few radio and television broadcast stations, all telecom and me-dia technology industries in Mexico are privately owned.

Telecomm is a decentralised body of the Federal Public Ad-ministration that has a concession to install, operate and exploit a fibre optic public telecommunications network.

Telecomm also has a constitutional monopoly for the provi-sion of telegraph services in Mexico.

In addition, the Mexican government owns “MEXSAT,” which is a satellite system comprised of three satellites that attend to the communication and security needs of the Mexican State.

1.5 Limits on ParticipationTelecoms Media Technology industries in Mexico are open to competition and there are no limits to participation, ex-cept for telegraph services that can only be provided by the Mexican government.

1.6 restrictions on Foreign Ownership or investmentAs with the approval of the Act, there are no limits to foreign ownership or investment in the telecommunications sector. However, foreign ownership or investment in the broadcast sector is limited to 49% of voting stock, provided that the country of origin grants reciprocal terms from which the investment originates.

Notwithstanding the above, foreign investors can also par-ticipate in the capital of private commercial broadcasters through the subscription of neutral (limited vote) shares or equity interests, prior authorisation of Mexico’s Foreign Investment Bureau.

1.7 world trade Organization MembershipMexico is a member of the World Trade Organisation and it has subscribed all commitments under the General Agree-ment on Trade in Services regarding telecommunications.

Mexico has no scheduled exemptions for telecommunica-tions services except for telegraphs.

1.8 appellate ProcessIFT’s decisions can only be appealed before federal spe-cialised courts through injunctions or amparo indirecto,

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which can only be filed against a final IFT resolution and not against an intra process decision.

Also, IFT’s decisions cannot be suspended while they are being challenged through an amparo indirecto lawsuit.

1.9 annual or recurring FeesAll licensees of commercial use spectrum must pay annual fees as per Mexico’s Federal Rights Law.

Annual spectrum fees are determined under the Federal Rights Law on a per MHz basis, based on the frequency band used and the region in which such a band is licensed.

2. Broadcasting/Media

2.1 important companiesMexico’s most important companies in the audiovisual in-dustry are as follows: Grupo Televisa, TV Azteca, Megacable and Grupo MVS.

Grupo televisa Grupo Televisa is by far the largest broadcaster in the Mexi-can market with a market share of approximately 70% of the television audience.

In addition, Grupo Televisa is the largest supplier of pay TV services in Mexico with a national participation of 60.9% of total subscribers.

Grupo Televisa participates in the pay TV market through some of the largest cable service providers in the country (Cablevisión, TVI, Cablecom, Telecable and Cablemás) as well as through the largest DTH service provider in Mexico, branded as “Sky.”

Sky has a market participation of 69.7% of the DTH market with 6,691,200 subscribers.

Televisa is also the largest Spanish language content pro-ducer in the world and has an important participation in the Mexican broadcast radio market as well as in the US Hispanic TV network “Univision.”

tV azteca TV Azteca is the second largest television broadcaster in Mexico with a market share of approximately 30% of the television audience.

TV Azteca is owned by Grupo Salinas, which also has par-ticipation in the pay TV market through its subsidiary Total Play Telecomunicaciones.

Total Play has a market participation of 1.6% of total pay TV subscribers in Mexico.

TV Azteca does not participate in the broadcast radio mar-ket and it used to be the owner of wireless carriers UNEFON and Iusaell, until it sold both companies to US wireless car-rier AT&T at the beginning of 2014.

Megacable Megacable is the second largest pay TV service supplier in Mexico with a national participation of 11.9% of the pay TV market.

Megacable is based in the Mexican city of Guadalajara and has no participation in the broadcast market.

Grupo MVS Grupo MVS participates in the pay TV market through its subsidiary “Dish Networks” which is the second largest DTH service provider after Televisa’s Sky.

Dish has a participation of approximately 30.3% of the DTH market with 2,908,800 subscribers.

Unlike other pay TV services, Dish’s service can be billed and paid through Telmex’s monthly telephone bill.

2.2 requirements for Obtaining a Licence/authorisation to Provide ServicesThe licence required in order to provide all kinds of telecom-munications services, including broadcast and pay TV me-dia services, is called “single concession.”

Pursuant to the Law, there are four types of single conces-sions, which are: commercial, public, private and social.

Commercial concessions allow for the rendering of telecom-munications services for business purposes.

Whereas public, private and social concessions are grant-ed for the purposes of corresponding to each one of their names, and none of them may render services for business purposes, although social concessions are entitled to sell ad-vertising services to federal government entities up to 1% of the overall advertising budget of such federal entities.

Pursuant to article 73 of the Law, the timeframe for obtain-ing a commercial concession that does not involve the use of spectrum is 60 calendar days.

Spectrum concessions for commercial use, whether for broadcast or telecommunications, are granted by way of an auction called by IFT, at its sole discretion.

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As it refers to cost, the cost applicable for obtaining a conces-sion that does not involve the use of spectrum is of approxi-mately USD900 pursuant to Mexico’s Federal Rights Law.

The cost for obtaining a spectrum concession is that of the winning bid plus the annual rights payable to the Mexican government as per the Federal Rights Law.

2.3 typical term for a Licence/authorisation to Provide ServicesSingle concessions for the rendering of media services through wired telecommunications networks can be granted for a term of up to 30 years, whereas spectrum concessions for the commercial provision of broadcasting or other media services can be granted for a term of up to 20 years.

As it refers to a renewal process, concession holders must file for a renewal within the year prior to the beginning of the fifth last part of the validity of their concession, and in order to obtain its concession’s renewal, the concessionaire must: (i) be up to date with compliance of its legal, regulatory and concession obligations; and (ii) accept, prior to the granting of a renewal, the conditions that IFT (in its case) establishes.

IFT must rule on a concession renewal within 180 business days from the date that such renewal was requested and, in case of absence of a ruling, the concession renewal shall be deemed granted.

In the case of spectrum or orbit concessions, IFT must deter-mine within one year from the reception of the concession extension request, if it is of public interest to recover the spectrum or orbits and in case IFT determines there is no public interest in such recovery, it shall grant a concession extension within such year.

2.4 transfer of Licences/authorisations to Other entitiesLicences/authorisations for broadcasting/media services are transferrable to other entities either through: (i) changes in ultimate ownership; (ii) merger; or (iii) assignment.

IFT is the only regulatory and competition authority that can authorise the transfer of concessions or authorisations through any of the options mentioned above.

For change in ownership via merger or direct/indirect trans-fer of 10% or more of a concessionaire's voting shares or equity interests, it is necessary to obtain authorisation from the IFT.

Thus, the concessionaire shall give notice to the IFT of the intention of interested parties to carry out the subscription or transfer of the shares or equity parts, whether directly or indirectly, and shall accompany the notice with detailed

information of the people interested in acquiring the shares or equity parts.

The IFT shall have a term of ten business days following the presentation of the notice, to request the opinion of the SCT and the SCT shall have a term of 15 business days to issue its opinion.

The transfer shall be deemed non-objected if IFT does not respond to the concessionaire within 45 business days from the date that the concessionaire filed its transfer notice be-fore the IFT.

IFT may authorise the partial or total assignment of a con-cession within a term of 90 calendar days, provided that:

•At least three years have passed from the time the conces-sion was granted;

•The assignee obliges to comply with the concession’s obliga-tions as well as the conditions determined by the IFT; and

•Such assignment is not subject to a notification proceeding under Mexico’s Federal Economic Competition Law.

If the assignee provides similar services within the same geographic area of the assignor, the IFT would be required to carry out a previous market structure and competition analysis.

Unlike the transfer of a concession through merger or changes in ultimate ownership, the transfer of a concession shall not be deemed non-objected once the IFT’s term for response has elapsed.

2.5 Spectrum allocationSpectrum allocated for use by broadcasting/media is as follows:

Broadcast radio AM: 535-1625 KHzFM: 88-108 MHz

Broadcast television VHF: Channels 2-13UHF: Channel 14 to 51

2.6 restrictions on common OwnershipChapter IV of the Law entitles IFT to impose cross own-ership restrictions on concessionaires when broadcast tel-ecommunication concessionaires attend to a same market or region, and inhibits access to plural information in such markets or regions.

Restrictions include the obligation of the applicable TV ser-vice provider to include within its programming the news or public interest channels designated by the IFT and such

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pay TV service provider's obligation to include at least three channels with predominantly domestic and Mexican inde-pendent production.

In case of violations to the restrictions above, IFT may im-pose restrictions or limitations of access to:

•The national or regional concentration of broadcasting spectrum;

•The granting of new broadcast concessions; and•Cross ownership of broadcasters and media telecommuni-

cations service providers.

2.7 content requirements and regulations Programming Programming distributed through broadcasting or pay TV shall: facilitate the integration of families, the harmoni-ous development of children, improvement of education systems, promote artistic, historical and cultural values, sustainable development, transmission of ideas that affirm national unity, equality between women and men, spread of scientific and technical knowledge and the correct use of language.

Concessionaries shall inform the public of their content classification and provide warnings on content that may be unsuitable or inappropriate for minors.

Transmission of contests in which prizes are offered shall be pre-approved by the Ministry of the Interior and shall be supervised at all stages.

commercial advertising Maximum transmission times: Concessionaries providing broadcasting or restricted television and audio services shall maintain a balance between advertising and programming transmitted daily.

TV broadcasters: Commercial advertising shall not exceed 18% of total transmission time.

Radio broadcasting: Commercial advertising shall not exceed 40% of total transmission time.

Pay television and audio: Commercial advertising shall not exceed six minutes for every hour, except for sales channels that are exempted from this limit.

Presentation of commercial or political advertising as news or information: In order to prevent the transmission of mislead-ing advertising, the transmission of commercial advertising or political propaganda presented as journalistic news or information is prohibited.

Political and public interest programming All concessionaires are obligated to transmit information on education, cultural, social, political, sports, domestic and in-ternational matters on a daily basis.

In addition, all concessionaires shall give priority to the transmission of government bulletins relating to safety, de-fense, preservation of public order or measures to anticipate or remedy any public emergency as well as any information relevant to the public interest.

All broadcasters are obliged to dedicate time to the transmis-sion of government and campaign advertising.

Political campaign advertising is equal to 18 minutes in tel-evision and 35 minutes in radio.

Government advertising is equal to 30 minutes a day in all radio and TV stations in the country.

indecency restrictions The contents of advertisements shall comply with the clas-sification system set by the Ministry of Interior under law. In advertising aimed at children it is prohibited to: promote or show illegal or violent behaviour, show or promote products that threaten physical or emotional health, present children as sex objects, use the inexperience or immaturity to per-suade them, directly encourage purchase or ask for purchase or show behaviour that promotes inequality and contains subliminal messages.

2.8 The Difference in regulations applicable to Broadcasting Versus cableThe Law regulates both broadcasting and pay TV, although broadcasting is more heavily regulated due to its penetration and gratuity.

Multichannel Multicast television channels are regulated as any other regu-lar broadcast television channel.

Nonetheless, the operation of multicast channels is subject to IFT’s authorisation.

Otts Other audiovisual content services such as OTTs are not regulated at all and IFT has even determined that OTTs are so far not substitutes to pay television services.

2.9 transition from analogue to Digital BroadcastingAt the time of writing, Mexico has already concluded its transition from analogue to digital TV broadcasting, mak-ing it the first Latin American country to cease all analogue television transmissions.

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Mexico’s analogue to digital TV transition was concluded on 31 December 2015.

2.10 extent to which Local Government regulation is Pre-emptedTelecommunications and broadcasting are only regulated at the federal level.

Thus, local governments have no jurisdiction over broad-casting and media services.

3. telecoms

3.1 important companiesThe following are the most important companies in Telecom by revenue and by market share in Mexico:

•Telcel is the largest mobile operator in the Mexican market with a market share of 69.5%. Telcel’s revenues for the sec-ond quarter of 2015 was MXN44,725 million.

•Telmex-Telnor is the largest fixed operator in the Mexi-can market with a market share of 62%. Telmex-Telnor’s revenues for the second quarter of 2015 was MXN24,568 million.

•Telefónica is the second largest mobile operator in the Mexican market with a market share of 21.5%. Telefonica’s revenues for the second quarter of 2015 was MXN7,741 million.

•Iusacell and Unefon are the third largest mobile opera-tor in the Mexican market with a market share of 5.4%. Iusacell-Unefon’s revenues for the second quarter of 2015 was MXN4,507 million.

•Nextel is the fourth largest mobile operator in the Mexican market with a market share of 3.1%. Nextel’s revenues for the second quarter of 2015 was MXN4,483 million.

3.2 requirements for Obtaining a Licence/authorisation to Provide ServicesLicences: The Law recognises two types of licences, one be-ing concessions and the other being authorisations.

Concessions: Concessions are mainly “facilities based” and are divided into: (a) spectrum concessions; and (b) single concessions that allow for the rendering of any telecommu-nications services.

Authorisations: Authorisations are granted for: (a) the resale of one or more of the concessionaire’s services; (b) the instal-lation and operation of transmitting satellite earth stations; and (c) the commercialisation of foreign satellites’ reception and transmission rights.

General requirementsconcessionsThe licence required in order to provide all kinds of telecom-munications services, including broadcasting and pay TV media services, is called “single concession.”

Pursuant to the Law there are four types of sole concessions, which are: commercial, public, private and social.

Commercial concessions allow the rendering of telecom-munications services for business purposes whereas public, private and social concessions are granted for the purposes corresponding to each one of their names and none of them may render services for business purposes, although social concessions may sell advertising services to federal govern-ment entities up to 1% of the overall advertising budget of such federal entities.

Pursuant to article 73 of the Law, the timeframe for obtain-ing a commercial concession that does not involve the use of spectrum is 60 calendar days.

Spectrum concessions for commercial use, whether for broadcast or telecommunications are granted by way of an auction called by IFT, at its sole discretion.

concession costAs it refers to cost, the cost applicable for obtaining a conces-sion that does not involve the use of spectrum is of USD900 approximately, pursuant to Mexico’s Federal Rights Law.

The cost for obtaining a spectrum concession is that of the winning bid plus the annual rights payable to the Mexican government as per the Federal Rights Law.

authorisationsAuthorisation requests must be filed before the IFT along with payment of the corresponding government fees.

The application must include a description of the project as well as an investment plan and technical description.

IFT has 30 business days to respond to an authorisation re-quest and shall be deemed granted if IFT does not respond within such term.

authorisation costCost for an authorisation is of USD250 approximately, pur-suant to Mexico's Federal Rights Law.

3.3 transfer of telecoms Licences/authorisations to other entitiesPlease refer to section 2.4 above.

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3.4 regulations for Network-to-Network interconnection and accessMexican law obliges all concessionaires to provide intercon-nection and build their networks with open architecture in order to guarantee interconnection and interoperability with other networks.

Furthermore, the Law establishes that interconnection must be granted under nondiscriminatory and transparent condi-tions based on objective criteria; all interconnection agree-ments must be registered before Mexico's Public Telecom-munications Registry and the interconnection conditions provided to one carrier (including interconnection rates) must be made available to the rest.

In addition, the Law provides a list of services that shall be considered interconnection services, which include: (a) the transmission of traffic, including origination, termination as well as calls and short messages; (b) transmission links; (c) access ports; (d) signaling; (e) transit; (f) co-location; (g) infrastructure sharing; (h) auxiliary services; and (i) billing and collection.

All of the above-mentioned services are obligatory for the PEA and dominant agents, whereas the rest of the conces-sionaires only have to comply with the ones mentioned un-der letters (a), (b), (c) and (d).

Also, the Law imposes special or asymmetric interconnec-tion measures on the PEAs or Dominant Economic Agents, such measures include:

•The registration before IFT of a list of unbundled intercon-nection services, previously authorised by the IFT;

•The annual publication of an interconnection offer; and•The entering into agreements for the sharing of infrastruc-

ture and co-location, among other obligations.

The Law benefits interconnection negotiations between con-cessionaires but also establishes that in case of disagreement, the IFT shall resolve the conditions not agreed to between the parties.

Interconnection disputes mainly refer to rates, and to that effect IFT must determine interconnection rates based on its cost model, considering natural network asymmetry, market participation and any other factors.

At the time of writing, IFT was using a controversial Pure Total Cost model, which has had the effect of diluting the asymmetry of interconnection rates between the PEAs and the rest of the carriers; asymmetric interconnection rates have existed in Mexico only for the last two years, compared to almost ten years in different European countries.

Since the Law prohibits Telmex and Telcel to bill for the ter-mination of traffic in their networks, current interconnec-tion rate disputes mainly refer to the payments that these two companies have to make to the rest of the carriers, especially mobile ones.

3.5 accounting, Functional and Legal SeparationAccounting separation is an obligation for all concession-aires, whereas functional and legal separation are not. Con-cessionaires that have an annual revenue of less than MXN7 billion, have not been declared preponderant or dominant or do not quote in the Mexican Stock Exchange are allowed to file simplified accounting separation reports before the IFT

Respective functional separation, is an asymmetric condi-tion that the IFT may impose on preponderant or dominant agents (in addition to structural separation) but to this date, there is no IFT resolution to that effect.

At the time of writing, PEAs and dominant agents are only obliged to attend to other carriers’ service requests in the same way that they would attend their own or those of their affiliates or subsidiaries.

3.6 Provisions for access to Public and Private LandThere are no specific provisions for access to private land in order to install telecommunications infrastructure, whereas the Law favours the sharing of passive infrastructure among concessionaries.

The Law and the Preponderance Resolution oblige PEAs and dominant carriers to share their passive infrastructure pur-suant to reference offers approved by the IFT. At the time of writing, Telmex, Telcel and Telnor had IFT-approved public reference offers for the sharing of passive infrastructure in-cluding towers, poles and ducts.

In addition, article 149 of the Law establishes that with the objective of promoting infrastructure sharing and the use of government assets, any concessionaire shall be able to install infrastructure in national assets in order to deploy public telecommunications and broadcast networks; the conditions for the use of such infrastructure shall be determined by Mexico’s Institute for the Administration of Government Real Estate.

3.7 rules which Govern the Use of telephone NumbersNational numbers are considered a scarce resource admin-istered by the IFT and their use and assignment is regulated by the following regulations:

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Rules of number portability: Which regulates the processes for the transfer of national numbers between carriers, mainly as the result of an end user's decision.

Fundamental Numbering Plan: Which regulates the admin-istration and use of national numbers.

3.8 regulation of retail tariffsRetail tariffs are not regulated, however they have to be reg-istered before IFT and have to comply with certain rules to avoid abusive practices.

Notwithstanding the above, freedom to determine rates does not apply to PEAs and dominant agents who have to obtain the IFTs prior authorisation to all of their wholesale and re-tail rates.

3.9 rules to Promote Service in Underserved areasMexico has no universal access rules or funds, although the Mexican government through the Ministry of Communi-cations and Transports has a public program called “Mé-xico Conectado” (Mexico Connected) which seeks to bring broadband connectivity to rural and low income urban areas in the country.

Several of México Conectado’s sites are installed by private parties, which are assigned projects by way of a public auc-tion.

By the end of 2014, México Conectado had a total of 65,000 sites nationwide.

3.10 extent to which Local Government regulation of telecom Service is Pre-emptedLocal governments have no jurisdiction over telecommu-nications and broadcasting services in Mexico, since these services are regulated at the national level.

4. wireless

4.1 important companiesThe following are the most important companies in Telecom by revenue and by market share in Mexico:

•Telcel is the largest mobile operator in the Mexican market with a market share of 69.5%. Telcel’s revenues for the sec-ond quarter of 2015 was MXN44,725 million.

•Telefónica is the second largest mobile operator in the Mexican market with a market share of 21.5%. Telefonica’s revenues for the second quarter of 2015 was MXN7,741 million.

•Iusacell and Unefon are the third largest mobile opera-tor in the Mexican market with a market share of 5.4%.

Iusacell-Unefon’s revenues for the second quarter of 2015 was MXN4,507 million.

•Nextel is the fourth largest mobile operator in the Mexican market with a market share of 3.1%. Nextel’s revenues for the second quarter of 2015 was MXN4,483 million.

4.2 General requirements for Obtaining a Licence/authorisation to Provide wireless ServicesWireless licences can be obtained through public auctions called by the IFT at its sole discretion or through direct/indi-rect acquisition or merger of a wireless concession holder or direct transfer of a wireless licence subject to compliance of regulatory and (in its case) economic competition require-ments.

4.3 transfer of wireless Licences/authorisations to Other entitiesPlease refer to section 2.4 above.

4.4 Spectrum allocation

Frequency bands

cellular 800 iMt/awS PcS824 – 849 MHz 1710 – 1755 MHz 1850 – 1910 MHz869 – 894 MHz 2110 – 2155 MHz 1930 – 1990 MHz

700 MHz Band

4.5 Procedures to identify and assign Spectrum among competitorsBy law, spectrum has to be auctioned by the IFT and com-parative tests are only carried out (faintly) in case of broad-cast auctions, in which content is supposed to be one of the conditions to be evaluated by the IFT for the awarding of spectrum concessions within an auction process.

The IFT has the authority to define the structure of the spec-trum blocks to be auctioned, impose any spectrum caps and define the methodology of the auctions, floor prices and minimum commitments to be agreed to by the participants in order to participate in the auction.

4.6 Unlicensed Spectrum UsesIn line with other countries there are permitted uses of spec-trum that do not require a licence.

In particular, there are companies that provide wireless ac-cess and dedicated links using free spectrum.

4.7 Government Policy/regulation to Promote Next Generation Mobile ServicesThe introduction of next generation mobile services is a commercial matter and neither the Law nor the existing regulation imposes any obligations in such respect.

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The only case in which the authority has established a policy for the introduction of next generation services is that of the Red Compartida, or shared network, which requires the de-ployment of last generation LTE technology with the mini-mum coverage of 85% of the Mexican population within a five-year term.

4.8 Price regulation for Mobile ServicesMobile telephone services are provided under the 'calling party pays' modality in their great majority, and even though users can choose to contract their mobile phone service un-der the 'receiving party pays' modality, most users choose to use CPP.

There is no regulation over international roaming rates, al-though Mexico’s three wireless carriers Telcel, AT&T and Telefónica all have offers and service packages that do not charge roaming rates for calls made when travelling to the USA or Canada.

Telcel (Mexico’s largest wireless carrier by number of sub-scribers) is legally banned from levying domestic roaming charges, whereas AT&T and Telefónica have followed suit.

In relation to price regulation, Telcel (as an IFT declared preponderant carrier) needs to obtain IFT’s authorisation for its wholesale and retail rates. Whereas Telefónica and AT&T are free to determine their own rates.

4.9 regulation of Government and commercial wireless UsesGovernment wireless uses are limited to the attention of the government’s own needs, such as: health, public security, intra-government agency/agencies communications and education.

Since spectrum for government use is assigned rather than auctioned, government spectrum licences cannot be trans-ferred.

4.10 extent to which Local Government regulation of wireless Service is Pre-emptedLocal governments do not have any participation in the regulation of wireless services, as all telecommunications services (either wired or wireless) are governed by federal authorities and laws.

5. Satellite

5.1 important companiesThere are no public statistics on revenue or market share for satellite service providers that participate in the Mexican market.

Nonetheless, most relevant market participants are:

•Eutelsat;•Intelsat;•Hispasat;•SES; and •Inmarsat.

After the acquisition of Satmex by Eutelsat, Mexico has no national satellite systems except for the MEXSAT system owned by the Mexican government.

5.2 General requirements for Obtaining a Licence/authorisation to Provide Satellite ServiceIFT issues authorisations for the commercialisation in Mexi-co of foreign satellite landing and transmission rights within 30 business days from the date that the corresponding ap-plication was filed.

Requirements for satellite authorisation licences are:

•That they be requested by a Mexican business organisation;•SCT’s favourable opinion respective to the co-ordination

of the foreign satellite services to be commercialised in Mexico;

•Agreement evidencing the legal relationship existing be-tween the foreign satellite operator and the Mexican licen-see;

•That the Mexican licensee has control of the services to be commercialised in Mexico;

•Technical description of the satellites to be used and copy of their registration before the ITU;

•Payment of government processing fees; and•The applicant’s investment plan.

Commercial concessions for the exploitation of orbits and associated frequency bands for commercial or private use are subject to public tenders and their requirements are the same ones as for spectrum licences for commercial use.

Commercial single concessions for the rendering of satellite based telecommunications services are subject to the same general requirements applicable to single concession filings.

5.3 transfer of Satellite Licences/authorisations to other entitiesSatellite licences, like any other licence, are transferrable by way of changes in direct/indirect ultimate ownership or di-rect assignment.

The transmission of concession licences for the occupation of satellite orbits and the use of associated frequencies is subject to the same proceedings mentioned under the sections above.

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Although not specifically foreseen under the Law, IFT does allow for the transfer of authorizations by way of ultimate ownership, merger or assignment.

Transfer of licenses by way of ultimate ownership and merg-er is not regulated, whereas transfer by direct assignment is subject to the IFT’s prior written authorization.

Note. We are requesting IFT’s verbal confirmation on this criteria.

5.4 Spectrum allocation to Satellite ServiceSpectrum for satellite services is allocated in line with ITU agreements.

5.5 international telecommunication Union MembershipMexico is a member of the International Telecommunica-tions Union and it has different ITU satellite network filings. These filings include: (i) the satellites owned by the Mexi-can government through the MEXSAT system; and (ii) the satellites owned by SATMEX (SATMEX is now owned by Eutelsat) which include the satellites Solidaridad 2, SATMEX 7 and SATMEX 8.

5.6 Provision of Service by Foreign-Licenced Satel-lites

Foreign-licenced satellites are permitted to provide services in Mexico, conditioned to: (a) such satellites having been co-ordinated (in its case) with the Mexican government; and (b) their services being sold in Mexico through a licence for the commercialisation of foreign satellite transmission and reception rights.

Authorisation licensees are not obliged to install master earth station facilities in Mexico, although they must at least install a remote control centre that allows for the activation, deactivation and monitoring of users in Mexican territory.

5.7 Milestone and Due Diligence DeadlinesSatellite operators that receive Mexican licences for the use of orbits and associated frequency bands are obliged to posi-tion and operate their satellites within the terms established in their respective concession titles.

6. internet/Broadband

6.1 important companiesThe five most important internet/broadband companies in Mexico by market share are:

Fixed broadband Telmex: 60.9%

Izzi (Televisa): 19.9%Megacable: 11.9%Axtel: 3.2%Total Play: 1.6%

Mobile broadband Telcel: 71.0%Telefónica Movistar: 17.9%AT&T (Iusacell/Nextel): 10.2%MVNOs: 0.9%

6.2 regulation of Voice Over iP ServicesVOIP services are not regulated, provided that they do not make use of national numbers or interact with PSTNs.

Regular telephone services can only be commercialised by carriers or resellers.

6.3 interconnection and access regulatory conditions to iP-Based NetworksRegardless of whether they operate under the IP protocol or not, all networks have the obligation to provide interconnec-tion to all soliciting carriers.

Thus, interconnection and access regulatory conditions also apply to IP-based networks.

6.4 Net Neutrality requirementsThe Law prohibits concession and authorisation holders (li-censees) from blocking, interfering, discriminating, med-dling or arbitrarily discriminating against any user’s right to access the internet.

Violations shall be sanctioned by the IFT with fines ranging from 1 to 3% of the licensee’s annual revenues.

6.5 Government regulation of internet/BroadbandThe Mexican government through the SCT has launched a public connectivity program under the name “México Conectado” (Mexico connected) which at the end of 2014 had already connected 65,000 public sites all over Mexico, using different connectivity solutions that involve public and/or private participation.

6.6 Over-the-top internet-based ProvidersOTTs are not subject to licensing requirements and there are no specific regulations applicable to OTTs.

Notwithstanding, OTTs are obliged to collaborate with jus-tice under Title Eight of the Law.

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6.7 extent that Local Government regulation of internet/Broadband Service is Pre-emptedIn Mexico, telecommunications, broadcasts and the internet are regulated at the federal level only. Thus, local governments have no jurisdiction over internet/broadband services.

7. Privacy

7.1 Government access to Private communicationsArticle 16 of the Mexican Constitution entitles federal courts to authorise the interception of private communications at the request of federal or local crime prosecution authorities.

7.2 Use of encryption technologyPursuant to IFT’s Collaboration with Justice Guidelines, car-riers have to use encryption technology when responding to information requests from crime prosecution and public security authorities.

7.3 Liability of tMt companies for content carried Over Their NetworksTMT companies are not liable for content carried over their networks unless they directly participate in the generation, marketing or commercialisation of illegal content.

7.4 Obligation of tMt companies to Block access to certain Sites or contentPursuant to the Law, telecom companies are obliged to block content, applications or services at their user’s request, with-out such blocking extending to other content, applications or services.

Pay TV companies are also obliged to adopt technical meas-ures that allow their users to block channels or programming that they do not wish to watch.

In addition, TMT companies are obliged to block access to certain sites or content if ordered by a federal judge.

7.5 Obligation of tMt companies to retain customer DataPursuant to article 190, section II of the Law, telecom com-panies are obliged to retain customer and communications data for a total of 24 months, which information shall remain confidential pursuant to the Law on Personal Data in Pos-session of Private Parties.

Pursuant to Title Eight of the Law, public security agencies, state and federal crime prosecution authorities may request such information from telecommunications companies without the need of a warrant.

7.6 Prohibition of Unsolicited communicationsThere is the law for Consumer Protection, which entitles consumers to directly request service providers to refrain from sending unwanted advertising of products and services through any means, including telephone calls, e-mail or post.

8. Future

8.1 Status and Process of convergenceTelecom media technology convergence has been taking place in Mexico since the early 2000’s, when traditional cable service providers started being authorised to provide broadband and telephone services through their networks.

These authorisations were followed by telephone carriers such as Axtel and Iusatel (now Total Play) receiving authori-sations to provide pay TV services.

To this date, major pay TV service providers (except for DTH companies) and several regular fixed line service com-panies (except for Telmex) provide triple or quadruple play packages to their end-users, whereas broadband users can also contract audiovisual services from OTTs such as Netflix, Claro Video or others.

Until now, neither Telmex nor Telcel are entitled to provide any television services as Telmex’s concession includes a con-dition prohibiting it from: (i) directly or indirectly exploiting television concessions to the public; or (ii) transmitting or distributing television signals without the IFT’s authorisa-tion.

8.2 changes to Statutes, Laws or LegislationSince major changes were enacted in 2013, with the passing of a constitutional reform to the Mexican telecommunica-tions and broadcast sectors as well as antitrust (competition) regulation and the enactment of a new telecommunications and broadcast law in 2014, it is not foreseen that major changes to statutes, laws or legislation applicable to TMT industries shall occur in the near future.

8.3 changes to Government Ministries, regulatory agencies or Privatised entitiesGiven the fact that major changes to Mexican telecommuni-cations ministries and agencies were approved in 2013 and 2014 with the closing of Mexico’s former Federal Telecom-munications Commission, the creation of IFT as an autono-mous agency and the transfer of relevant powers, such as the imposition of sanctions and granting of telecom and spec-trum licences from the SCT to IFT, there are currently no real plans to change IFT or its powers.

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8.4 identification and assignation of additional SpectrumBroadcast IFT plans to auction in 2016:

•191 commercial concessions for the provision of FM radio services in an equal number of medium and small cities;

•66 commercial concessions for the provision of AM radio services in an equal number of medium and small cities; and

•148 commercial concessions for the provision of Digital Terrestrial Television services in an equal number of large, medium and small cities. These are the concessions that were relinquished by Grupo Radio Centro during the 2015 auction.

As in other jurisdictions, broadcast spectrum in the 600 MHz band could eventually be assigned for future auctions for the rendering of wireless telecommunications services, although there is currently no specific plan to carry out the above.

In addition, IFT has identified spectrum in other frequency bands to be assigned for social, public, communal and indig-enous use for the provision of AM-FM radio, TDT, mobile and trunking services.

telecommunications AWS - In February 2016, IFT auctioned 80MHz (divided into six 5+5 blocks) of the AWS sub-bands AWS-1, AWS-3 base and AWS 3-extended. Telcel was awarded six blocks whereas AT&T was awarded two blocks.

Telefónica/Movistar (Mexico’s second largest carrier meas-ured by number of subscribers) did not participate in the spectrum auction.

red compartida In addition, the SCT has scheduled to auction the shared network or Red Compartida project on 8 September 2016 deferring in one month the last date of 8 August 2016.

Pursuant to its spectrum plan for 2016, IFT may also auction commercial concessions for spectrum in the 2.5-2.69 GHz band for the provision of commercial mobile broadband services.

rM abogados S.cMontes Urales 754, Int. 201 Mexico City Mexico 11000

Tel: +5255 5540 6284Fax: Email: [email protected]: http://www.rmlaw.com.mx/