The second district judge specialized in telecommunications, Juan Pablo Gómez Fierro, determined to nullify the resolution issued by the Federal Institute of Telecommunications (IFT) in November 2020, where he indicated the company as an agent with substantial power in 35 markets of seven states in the country, after the acquisition by Televisa of Axtel’s direct-to-home fiber optic residential business and related assets.
Substantial power refers to the ability of a company to behave independently of its competitors, to set prices unilaterally or to restrict supply in the relevant market without competitors being able to counter such power.
“Consider that the resolution (of the IFT) approved in the session held on November 18 and 20, 2020, through which the existence of an economic interest group called (Grupo Televisa) with power substantial market share in the restricted television and audio service (STAR)”, reads the document from the Judiciary.
The specialized judge told the telecommunications regulatory body that if it wishes to challenge the resolution, it must make a new prospective analysis of market trends and consumption patterns of users of the pay television market and OTT platforms, and with Based on this document, the degree of substitution or complementarity of the services is determined.
According to the document, this was one of the arguments by which it was decided to nullify the declaration of substantial power to Grupo Televisa. The specialized judge explains that the IFT overlooked the publication Forecasts of telecommunications services , in which there are allegedly statements about why OTTs were not substitutes for television services in 2014, but these two services now effectively present a statistically significant correlation between the downward trend in pay-TV demand and the upward trend in OTT demand.
In this sense, Grupo Televisa detailed in its arguments that streaming services are not possible substitutes for the services of telecommunications companies because there are differences between both services.
“The conclusion of the complainant (the IFT) is not shared, regarding that OTT consumers can access audiovisual content in an unlimited manner, since the free content offered by said OTT is limited and to access most of the catalog you have to make a payment ”, explains Televisa in the sentencing document.
Another of the arguments that Grupo Televisa presented to the authorities was that the investigation carried out by the telecommunications regulatory body lacked an update of the markets, for which it lost weight and validity. In addition, the company stated that the investigation carried out by the IFT exceeded the deadlines. “It is invoked as a procedural violation that the processing of the investigation exceeded the period of ninety calendar days.” The regulator filed the amparo claim on December 18, 2020, whose complaint took turns until February 19, 2021 due to the health crisis.
Finally, Televisa pointed out that the IFT determined that one of its companies does not have a concession title within the group of substantial power.