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Secondary laws for Mexico telecoms overhaul to be delayed: lawmakers

Mexico's President Enrique Pena Nieto addresses the audience during The Economist's Mexico Summit 2013 in Mexico City November 7, 2013. REUT
Mexico's President Enrique Pena Nieto addresses the audience during The Economist's Mexico Summit 2013 in Mexico City November 7, 2013. REUT

By Dave Graham

MEXICO CITY (Reuters) - Legislation to implement a major overhaul of Mexico's telecommunications industry will not be approved until early next year, pushing back a deadline set for December, two senior lawmakers said on Saturday.

The secondary laws set out the fine print for a telecoms reform promulgated in June by President Enrique Pena Nieto which gives regulators sweeping powers to rein in billionaire Carlos Slim's telecoms giant America Movil and dominant broadcaster Televisa.

The bill raised hopes Pena Nieto was serious about breaking the hold a select few have on much of the economy, but a pile-up of pending bills in Congress has made the December 9 deadline for the secondary telecoms legislation increasingly unlikely.

Federico Gonzalez Luna, a congressman who heads the radio and television committee in the lower house, told Reuters that to ensure the secondary laws were properly drawn up, they would now have to wait until 2014.

"There's no way of doing them earlier," said Gonzalez Luna, a member of the Green Party, allies of Pena Nieto's Institutional Revolutionary Party (PRI). "The plan is to get them done as quickly as possible, but to do them well."

Efforts would focus on getting the laws passed in the next period of Congress beginning in February, he added.

A delay in the secondary laws could give America Movil and Televisa more time to prepare their defense against steps by the new regulator to reduce their dominant positions in Mexico.

For now, Congress is scrambling to pass an energy bill put forward by the president in August to open up the state-controlled oil and gas industry to more private investment.

Fraught with political risks in a country where the 1938 nationalization of the oil industry was a defining moment, the energy bill is a central plank of Pena Nieto's economic agenda.

But the energy reform has been bogged down in the Senate, and the government is insistent it should pass this year.

To do that, the PRI must first push through an electoral reform to win the support of opposition conservatives it is banking on to provide votes for the new energy law.

The electoral reform is moving slowly in the Senate and PRI party chairman Cesar Camacho said on Friday a plan was under consideration to prolong Congress to make sure the energy bill is signed off by lawmakers this year.

ENERGY LAW BY CHRISTMAS?

Hector Gutierrez de la Garza, a PRI lawmaker who heads the communications committee in the lower house, said Congress would aim to approve the secondary telecoms laws early in 2014.

"It needs to be in February because in March there's a deadline for the Federal Institute of Telecommunications (IFT) to issue various resolutions," he told Reuters, referring to the new telecoms regulator created by the reform.

There would be no penalty for missing the December 9 deadline because a transitory article in Pena Nieto's reform meant that current telecoms laws would remain in effect while Congress finalized the secondary legislation, he added.

Pena Nieto's reform gives the IFT the power to break up dominant telecoms companies, and the secondary legislation will set out conditions for the use of that option.

Alejandra Barrales, a member of the opposition leftist Party of the Democratic Revolution who heads the radio and television committee in the Senate, said she was opposed to delaying the approval of the secondary laws.

Because party leaders had so far not formally declared the laws would be delayed until next year, she would consider that December 9 remained a possibility, she told Reuters.

Still, pushing them back would give Congress more space to pass the energy bill, said Eligio Gonzalez of the PRI, a senior member of the lower house communications committee.

"Our thinking is that the Senate will be approving the energy reform around (December) the 14th. And for us to be meeting in an extraordinary session around the 19th-20th to pass it in the days before Christmas," he said.

(Editing by Mohammad Zargham)

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