Mexico Tries To Rein In Billionaire Carlos Slim
MELISSA BLOCK, HOST:
The richest man in the world is Carlos Slim Helu. He runs Mexico's largest cell phone company. According to the Mexican government, he's also guilty of grave and repeated anti-trust practices. Mexico's fledgling regulatory agency has one again slapped Slim with a multi-million dollar fine. He successfully appealed or fought the previous fines, but some tenacious Mexican lawmakers say they are determined to make him play by the rules.
Here's NPR's Carrie Kahn from Mexico City.
CARRIE KAHN, BYLINE: If you make a phone call in Mexico, most likely Carlos Slim gets a cut. Slim controls 80 percent of all landlines in Mexico and 70 percent of cell phone service. He also controls the infrastructure, which competitors must pay a fee to use. Until recently, Slim and his companies, TELMEX and America Movil, could pretty much set those rates. Eduardo Perez Motta, however, has gotten in his way lately.
Perez Motta heads the country's small anti-trust commission known as Cofeco. He's fined Slim's companies three times in the last year, at a cost of more than $1 billion. Perez says the most recent fine, $52 million, was for cutting a competitor's access to TELMEX's network for more than 10 months.
EDUARDO PEREZ MOTTA: We have to apply the law and we expect these companies basically to change their behavior and to understand that the competition authority is here to protect competition.
KAHN: Gaining that respect has been tough for Perez Motta. He has a small staff going against Slim's law firm of more than 100 attorneys, which has let Slim drag out many of the commission's actions with lengthy legal proceedings. However, last year, Cofeco and Perez won a significant victory in exchange for a record $1 billion fine, TELMEX agreed to lower inner connection fees paid by competitors.
Perez says cell phone prices, some of the highest in the world, have been dropping in the past three months.
MOTTA: We are in a country, Mexico, that there is no strong culture of competition, so we have to develop this culture. People have to understand that competition is an asset that they have to not only value, but also to defend.
KAHN: Defending competition against some of the country's richest and most powerful people has won Perez plenty of enemies, but he has fans, too.
JANA PALACIOS: He's a very brave person and he's my hero.
KAHN: Jana Palacios is a telecommunication expert at IMCO, the Mexican Institute of Competitiveness. Palacios says Cofeco has made great strides, but it and other regulators lack the teeth to bring true competition to many of Mexico's monopolies. She says this week, Mexico's Congress plans to introduce a new package of reforms aimed at the telecommunications market.
PALACIOS: When you talk about monopolies in Mexico, the first thing that comes into your mind is (unintelligible) and TELMEX, so it also sends a sign that this government is going to work against monopolies.
KAHN: Palacios says if lawmakers can successfully shake up Slim, they'll be in a good position to tackle tougher and more power interests in the energy and financial sectors. Eduardo Perez Motta hopes congress will give him and other regulators the power they need to open up the economy.
MOTTA: It's not easy. It's not easy, but, you know, that would be the best way to make this country a country of opportunities for many more Mexicans.
KAHN: A spokesman for Carlos Slim was unavailable for comment on the latest fine. Previously, Slim and TELMEX have called Cofeco's findings unfounded. They have until next month to appeal. Stock in Slim's America Movil company dropped last week after disappointing earnings, due in part to the lower interconnection fees. Carrie Kahn, NPR News, Mexico City.