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New channels, by when?

altWhile the Mexican government decided to tender two new free-to-air television channels, in Colombia it has not been possible to get an investment bank to determine how many more channels the market can have. We analyze both cases.

Richard Santa

Mexico and Colombia live a similar situation in their television, both countries have two private national channels of open signal that have reigned for many years and although the respective governments have tried to tender new channels, it has not been possible.

2012 was a busy year for the two countries on this issue, because while in one progress was made in the definition by which there will be not one but two new open signal channels, in the other the process was knocked down by a high court and should have started from scratch.

- Publicidad -

Why the delay? How stormy these processes have been could have several explanations. Analisitas point out that there is a lack of political will from governments, bureaucratic management and it has even been mentioned that the two existing channels in each country sought to hinder the processes so as not to have to divide the advertising cake among more players.

But it seems that 2013 will be the year in which Mexico and Colombia finally have a new television offer, at least this has been stated by both governments and the regulatory entities in charge. But from saying to doing...

Colombian case
Lawsuits, concepts of the high courts, rights of petition of third parties, a media campaign without presents and even the change of the regulatory entity in charge of the process, were some aspects that affected the first intention of the Colombian government to award the third television channel, until February 14, 2012 the Council of State overturned the entire process that had been advanced and gave the order to start from scratch.

The tortuous path had begun in 2007, when then-Colombian President Álvaro Uribe Vélez announced the bidding process. The following year, the three international media groups that were interested in the third channel became known: Prisa and Planeta from Spain and Cisneros from Venezuela.

As the government demanded a minimum percentage of participation of Colombian companies, the consortia were formed as follows: the Prisa group was in consortium with the National Media Group of Colombia (GNM), which brings together the main regional newspapers; Planeta with the publishing house El Tiempo; and Cisneros was in search of a strategic partner.

But the auction model chosen by the then National Television Commission to deliver the third channel, the refusal to extend the deadline for the delivery of requirements and even the percentage of foreign capital participation, among others, made the Prisa and Cisneros groups withdraw from the process in 2010.

Despite this situation, the National Television Commission decided to continue with the auction process with a single proponent. This decision produced a strong debate in Colombia, even voices were heard accusing the government of that time of wanting to favor the remaining proponent.

- Publicidad -

For this reason, the process was sued before the Council of State, which in 2012 indicated that it was impossible to make an auction process with a single proponent.

Another aspect that generated controversy during the process was the claim of the two private television channels in Colombia, Caracol and RCN, which took advantage of their spaces to complain about the high costs of the extension of the license that they had to pay in 2010 compared to what those who stayed with the third channel were going to pay.

In response to this complaint, the National Television Commission decided to reduce the cost of the extension of the license to the two channels based on the fact that the advertising pattern was going to be distributed in three channels and not in two, because it was expected that the third channel would be ready by the end of 2010. In 2012, the National Television Authority again adjusted the price upwards.

Start over
In 2012, with Juan Manuel Santos as the new president of Colombia and after the elimination of the National Television Commission and the formation of the National Television Authority, the Minister of ICT, Diego Molano, announced the government's intention to start the process again, thinking of tendering not only one, but two channels.

And this was one of the main tasks entrusted to the new entity, which became operational on April 10, 2010. His first decision was to hire an investment bank to define the cost of the license and whether the Colombian market was able to respond with two more television channels. The goal was that by 2013 the process would be complete.

Unfortunately, as of March 2013, it has not yet been possible to hire investment banks and the process is still in sight. According to Minister Diego Molano, who is one of the members of the board of directors of the National Television Authority, they have sought investment banking but twice the award process has been declared void.

- Publicidad -

"It's a very complex process and the media pressure it has means that people are not measured. That is why we made the decision to start the investment banking evaluation process in several projects defined by specific topics, so we can count on independent consultants and universities. There is a strict chronogram and it is expected that by the end of 2013 there will be a third channel in Colombia."

But although the words of the Minister of ICT of Colombia sound hopeful, the outlook is not encouraging, because despite the fact that the National Television Authority is going to celebrate a year of operation, it has not been able to meet with the full board of directors.

The entity began to meet with three commissioners: the Minister of ICT, the government delegate Jaime Andrés Estrada, who led the transition between the two entities, and Alfredo Sabbagh, representative of the universities. Months later, Alexandra Falla, representative of the governors, joined the team and before the representative of civil society, Beatriz Quiñonez, arrived, Jaime Andrés Estrada resigned.

Today, without Estrada's replacement, alfredo Sabbagh presented at the beginning of March is added, in the midst of a scandal over a constitutional lawsuit filed by the board of directors to the law that created the entity, seeking definition in terms of budgetary autonomy and that ended up asking for the departure of the Minister of ICT from the board.

Mexican case
The third television channel in Mexico began to be talked about in 2011, under the government of Felipe Calderón, when the Federal Telecommunications Commission held a public consultation with businessmen, academics and civil society on the subject. The result was overwhelming, a new television channel had to be tendered.

Although unlike in Colombia the process only takes two years, it has not been without controversy. For a long time, Azteca and Televisa have been the two national networks that have dominated television and when the news of a new channel became known, many accused the two channels of wanting to hinder the process, to the point that the president of Televisa, Emilio Azcárraga, came out publicly to support the new channel.

By January 29, 2012, Cofetel had planned to vote on the list of requirements to tender the third channel, but it was postponed and during the first half of the year the decision continued to be postponed, due to the lack of adequate technical, economic and legal conditions.

But last June Cofetel finally decided that there would be not one but two national open signal channels that will go out to tender. The entity pointed out that the decision is taken as a result of different processes, such as a spectral capacity analysis, a market study, a public consultation and the collection of more than 50 tender requests formally submitted to this body.
The work plan approved by Cofetel includes frequencies for two DTT transmission channels in 153 main towns, representing the coverage needed to serve 93% of the country's population.

The regulator stressed that the decision welcomes the results of the market study of the Center for Economic Research and Teaching, which ensures that Mexico can use the transition to Digital Terrestrial Television to increase the plurality of information and content, as well as make the advertising market more efficient.

Cofetel clarified that it will seek that the tender be through a system of combinatorial proposals, with special emphasis on the non-economic criteria of the same, as established by the Mexican Supreme Court of Justice to ensure that the economic factor should not be preponderant when determining the winner.

Reforms in sight
With the arrival of the new government in Mexico, with President Enrique Peña Nieto at the head, not only was the intention to tender two television channels ratified, but also a prufunda reform in telecommunications for the country was announced.

Among the government's plans is that those companies that already have concessions for 12 megahertz or more will not be able to participate in the tenders. In addition, it seeks to eliminate the Federal Telecommunications Commission, Cofetel, and the Federal Competition Commission, Cofeco. In place of both entities, the Federal Institute of Telecommunications, Ifetel, would be created, an entity for which the selection process of its members would be through a group presented to the President of the Republic from an evaluation committee and that would have to be ratified by the Senate.

It also raises from 49 to 100% the possible participation of foreign direct investment in telecommunications and satellite communication, as well as from zero to 49% in broadcasting. And the concessionaires of free-to-air television must allow the full retransmission of their signal free of charge and without discrimination, for their part, the concessionaires of pay television must retransmit the free-to-air television signals at no cost to their subscribers, the concessionaires that have been declared with substantial power in any of the telecommunications or broadcasting markets, they will not be able to benefit from this rule of gratuity.

It only remains to hope that by the end of 2013 both countries will have been able to overcome their problems, that they can count on a new television offer for the benefit of citizens and the industry, and that it will not continue to be a postponed dream.


Richard Santa, RAVT
Author: Richard Santa, RAVT
Periodista de la Universidad de Antioquia (2010), con experiencia en temas sobre tecnología y economía. Editor de las revistas TVyVideo+Radio y AVI Latinoamérica. Coordinador académico de TecnoTelevisión&Radio.

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