Instituto Federal de Telecomunicaciones

The IFT Plenary approves the call to tender and bases of two geostationary orbital positions

• It will be the first allocation of orbital positions in the country since 2005
• Those interested in participating in this tender must obtain favorable opinion from the Institute with regard to economic competition
• IFT agrees to submit for public consultation the project to adapt the Policy for the Transition to Digital Terrestrial Television between July 18th and August 8th
• IFT issues the Regulatory Provisions to which the procedures are subject that the Institute resolves in the field of economic competition, derived from the Federal Antitrust Law
• The President Commissioner approves to turn antitrust issues that apply to other members of the Plenary, on a rotational basis, to serve as Speaker Commissioners

During an extraordinary session held yesterday, the Plenary of the Federal Telecommunications Institute (Instituto Federal de Telecomunicaciones, IFT) approved the Call to Tender and Bases of the public bidding process for granting concessions to occupy the geostationary 113 ° West and 116.8 ° West orbital positions and use the associated extended C and Ku frequency bands, as well as the emission rights and reception signals for the provision of satellite capacity for the fixed-satellite service.

The orbital positions to be tendered have coverage in the national territory, and are for commercial  satellite services, such as dedicated data links, DTH and links between corporate.

Those interested in participating in this tender must obtain favorable opinion from the IFT in economic competition, which must be presented in accordance with the corresponding instructions, which also was approved yesterday by the Plenary.

The Bases, Appendices and Annexes, as well as the instructions will be available for consultation and free download on the IFT website from July 18th this year.

With this bidding process, IFT promotes the participation of more competitors in the satellite market, which will result in greater investment, technological development, and better quality and price in the provision of services.

Additionally, in order to adapt the administrative arrangements with respect to the transition to Digital Terrestrial Television (Televisión Digital Terrestre, TDT) to be consistent with the Nineteenth transitory article of the Decree which is issued by the Federal Telecommunications and Broadcasting Law, published on July 14th this year in the Federal Official Gazette, the IFT Plenary resolved to submit for public consultation the draft entitled "Policy for the Transition to Digital Terrestrial Television", prepared by the Radio and Television Systems Unit.

This exercise will allow to know the comments, proposals and opinions of stakeholders and society in general about the content of the draft Policy, which will be evaluated by the Institute and, where appropriate, incorporated into the document to strengthen it. The Institute will publish on its website a document that addresses in general the comments, views and proposals received within the period of consultation, specifying which ones resulted in adjustments to the draft Policy, which in turn is subject to consideration by the Plenary.

The public consultation will take place in the period between July 18th and August 8th of 2014, and both the draft policy and a format for the submission of contributions will be available to interested parties, which will be received, in writing, through the IFT webpage at any time during the period of consultation, or at the Filing Office of the Institute on July 18th, as well as in the period covered from August 4th to 8th this year.

Once the public consultation closes, the Radio and Television Systems Unit, within the next 10 working days, shall submit the draft deemed result of this process to consideration of the Plenary, to be adopted and published the "Policy for the Transition to Digital Terrestrial Television" in the Official Gazette of the Federation (Diario Oficial de la Federación, DOF).

Also in the broadcasting field, in strict compliance to record number R.A. 21/2014, from relief trial 44/2014 promoted by Luis Carlos Mendiola Codina, the IFT Plenary voided the provisions the resolution adopted in its 1st Extraordinary Session, held on November 8th, 2013, as well as the consequences arising from it.

Additionally, upon the entry into force of the new Federal Antitrust Law on July 7th, the Rules derived from the previous norm are ineffective until this has been repealed and, in use of the powers conferred by article 28 of the Constitution and article 12 of this Law, the IFT Plenary agreed to issue the Regulatory Provisions to which the procedures will be subject that this regulator resolves with regard to economic competition.

With these provisions, the IFT offers legal certainty to economic operators regulated given that this legal instrument is necessary to achieve an effective implementation of the procedures provided for in the Federal Antitrust Law and that this regulatory body effectively meets its function of authority in the field of economic competition in the broadcasting and telecommunications sectors.

The Federal Antitrust Law, while envisaging to carry out public consultation for the issuance of these Provisions, also includes the possibility of exempting from it in the case of situations that so require.

For this reason, it is necessary to issue the Regulatory Provisions, in order to have the legal tool to effectively fulfill its role of authority in the field of economic competition in the broadcasting and telecommunications sectors and exercise the incremental powers not provided for in the repealed law.

In addition, in its commitment to transparency and participation of the citizens, the Institute will shortly carry out public consultation on the Regulatory Provisions on economic competition, in order to receive the views and comments of stakeholders that will allow to strengthen the document and issue a new one in a period not exceeding six months from the entry into force of the Federal Antitrust Law, which will occur on January 7th, 2015.

The Plenary also approved that the President Commissioner, in exercise of his powers, turn the issues of economic competition in the assumptions that thus correspond to other Commissioners, which will act as Speaker Commissioners, on a rotational basis, in accordance with articles 83 fraction VI and 106 fraction IV of the Federal Antitrust Law. The strict order will be the responsibility of, as stipulated by law, the appointment of Commissioners, and that should be understood in accordance with the period of their appointment, so it shall be in the following form: Luis Fernando Borjón Figueroa, followed by Ernesto Estrada González, Adriana Sofía Labardini Inzunza, María Elena Estavillo Flores, Mario Germán Fromow Rangel and Adolfo Cuevas Teja, starting equally and again, once each cycle terminates.

The IFT Plenary approves the format for text messages that TELCEL will send to its users when they purchase airtime credit

• Each time that a Telcel prepaid time user purchases airtime, the user will receive a text message with the deposited amount, another with the accumulated balance available at that time and a third with the basic applicable rates
• The Institute determines non agreed interconnection conditions of various concessionaires of public telecommunications networks
• IFT resolves that 27 AM radio stations will continue to transmit in this band in order to ensure the continuity of the radio service in the towns where they operate
• The Quarterly Report of Activities for the period April - June is presented

As part of the obligations imposed on preponderant economic agents in the telecommunications sector, the Federal Telecommunications Institute (Instituto Federal de Telecomunicaciones, IFT) established user protective measures, including delivery of clear information to subscribers about contracted services fees and products billed by these companies.

With this respect, at its ordinary session held yesterday, the IFT Plenary approved the format of text messages that Telcel will send users on prepaid or postpaid mixed schemes when they purchase airtime, in accordance with the provisions of the forty-third provision of measures applicable to this preponderant economic agent.

Therefore, the short messages that Telcel will send, and which will be free to the user, will consist of 1) the amount paid; 2) the accumulated balance including the payment, and 3) the basic rates applicable to the prepaid scheme that the user has contracted, both for the local service, long distance, SMS and Internet megabytes.

The obligation to deliver the short messages with information is of great importance for prepaid subscribers so they have the information required on phone spending, given that users receiving the mobile service in this scheme do not have a monthly bill they can review for the use or the rates paid for them, or if there were any change in prices.

The company must comply with this implementation over no later than 60 days after being notified of this resolution.

In addition, Telcel will be required to present the short message format corresponding to the information of the international roaming rate which it will send to users when they purchase airtime abroad.

Additionally, six resolutions to resolve disagreements on interconnection between concessionaires of public telecommunications networks were emitted in this session.

Two of these resolutions refer to the termination of switched services for mobile users under the "calling party pays" scheme: 1) NII Digital, S. de R.L. de C.V. and Comunicaciones Celulares de Occidente, S.A. de C.V., Sistemas Telefónicos Portátiles Celulares, S.A. de C.V., Telecomunicaciones del Golfo, S.A. de C.V., SOS Telecomunicaciones, S.A. de C.V., Portatel del Sureste, S.A. de C.V., Iusacell PCS, S.A. de C.V., Iusacell PCS de México, S.A. de C.V. and Operadora Unefon, S.A. de C.V., and 2) NII Digital, S. de R.L. de C.V. with Pegaso PCS, S.A. de C.V. In both cases, an interconnection rate of $0.3214 pesos per minute was approved, applicable from January 1st to December 31st, 2012, in which companies must pay in a reciprocal manner was adopted.

Similarly, the Plenary determined the non-agreed interconnection conditions between Operbes, S.A. de C.V., Bestphone, S.A. de C.V., Cablevisión, S.A. de C.V., Cablemás Telecomunicaciones, S.A. de C.V., Cable y Comunicación de Campeche, S. A. de C.V., and Grupo Iusacell companies, resolving that the rate for termination services under the "calling party pays" scheme, that mobile networking companies must pay will be $0.3214 pesos per minute, applicable from January 1st to December 31^st, 2012. Meanwhile, the interconnection rate which Grupo Iusacell companies will pay to the referred counterpart for the same period is $0.02432 pesos per minute, for switched termination services of fixed users.

In addition, three interconnection disagreements were resolved separately between Televisión Internacional, S.A. de C.V. (TVI) with the following concessionaires 1) Grupo Iusacell companies; 2) Pegaso PCS and 3) Radiomóvil Dipsa, S.A. de C.V. It was determined for all three cases that TVI must pay a fee of $0.3214 pesos per minute, valid from January 1st to December 31st, 2012 to the above mentioned concessionaires of mobile and these, in turn, will have to pay a fee of $0.02432 pesos per minute for switched termination services to fixed TVI users.

In the broadcasting field, the Plenary determined 27 AM radio stations, associated with changes to the FM frequency, which will continue operating in the AM band, until the Institute determines that the provision of the broadcasting service in all the populations of the area covered by these stations is guaranteed based on technical studies conducted by the Radio and Television Systems Unit.

This resolution achieves that small communities in the country that only have AM coverage continue communicating through radio, based on provisions of the Sixth item of the "Agreement which establishes the requirements to carry out the change of authorized frequencies to provide the radio service and operating in the amplitude modulated band, in order to optimize the use, application and exploitation of a public domain asset in the transition to digital radio", published in the Federal Official Gazette on September 15th, 2008.

On other issues, the IFT Plenary resolved to issue 24 permission titles subject to the endorsement for the use of a broadcasting frequency for official purposes through different radio stations in the frequency modulated band, of which 21 are for the Government of the state of Sonora, two for Tabasco and one for Puebla.

Likewise, the Institute determined to grant three titles of permission subject to endorsement to use a frequency modulated sound broadcast with cultural purposes in the FM band, two of which are for universities of Colima and Guanajuato, respectively, and another one for an individual.

The IFT Plenary also presented its Quarterly Report of Activities for the period April - June, which will be available for consultation on the Institute's website in the coming days. This document realizes the follow-up to the "180 days Schedule", of institutional projects and various actions associated with the coordination projects with the Federal Executive.

Finally, the Plenary approved modification to the Organic Statute, to comply with the provisions of the new Federal Law of Economic Competition.

The IFT Plenary decides over 65 processes in telecommunications and broadcasting matters

• Issues a favorable opinion so Telcordia may be the Database Administrator for numeral portability purposes
• Decided to grant the permit certificate to use a State of Chiapas indigenous radio station for cultural purposes
• It approves the granting of four new concession certificates and an equal number of extension of concessions to install, operate and exploit a public telecommunications network in different locations of the country
• It decides on the issuance of 24 concession sound radio stations certificates, subject to approval

In an ordinary session, the Federal Telecommunications Institute (Instituto Federal de Telecomunicaciones, IFT) Plenary, decided over different telecommunications and radio matters, amongst which we highlight the granting of concessions for public fixed telecommunications networks, the extensions of concession certificates and the approval of operations of different radio stations, inter alia.

In sum, approximately 65 processes were processed, whereby the IFT provides legal certainty so that concessionaires may be able to plan their operations, guarantees the continuity of the services in different locations and promotes the participation of a bigger number of providers in the markets, for the users benefit.

Amongst the matters discussed, the Plenary issued a favorable opinion on the decision reached by general consent in the Technical Committee of Number Portability, so that Telcordia continues as the Database Administrator for the number portability process. This company has provided this service since July of 2008, when the right for the users to change of operator became effective, all the while keeping their same telephone number. The first agreement will conclude in July of the current year, and in this month it will renew for a period of three years.

Likewise, the Plenary was informed about five requests to extend the concession certificates of public telecommunications networks that offer television services by subscription in different locations in the country, and decided to reject them since they do not fulfill the applicable legal requirements. The information on the operators and the geographic zone where they provide their services will be published in due course on the IFT Internet page, so the users may adopt the pertinent measures.

In addition, it was decided to grant extensions to four concession certificates to install, operate and exploit a public telecommunications network with coverage in different locations of the country for a 10 years term.

Likewise, the Institute decided to grant four concession certificates to install, operate and exploit a public telecommunications network with coverage in different cities of the country.

In broadcasting matters, the Plenary also decided to grant a permit certificate to use an FM radio frequency to be used in cultural purposes to provide sound broadcasting services in favor of Comunicación Educativa y Cultural BAT´S IL K´OP, A.C in Bachajón, municipality of Chilón, Chiapas.

From the analysis conducted to the request, the IFT Plenary considers that it was submitted and formed according to the requirements set forth in Articles 17–E and 20 of the Federal Law of Radio and Television, and other applicable legal provisions.

As part of the justification of the project of decision, it was considered that in the location of Bachajón no radio or television stations with permits or concessions have been installed, and thus, by granting the permit certificate, the applicant may establish a mean that allows the integration of the communities through the construction and communication lines extension. Furthermore, the applicant states as a purpose, to establish a communication process that could be used as platform to hold talks, share needs and strengthen the indigenous culture in the zone, which has 118 thousand 180 inhabitants, of which 95.3 percent are in circumstances of poverty.

According to the information provided by the selfsame applicant, 86% of the population speaks an indigenous language and 46% does not speak Spanish, and thus, it is deemed that it fulfills one of the purposes submitted in the project, consisting in aiding or assisting the vulnerable sectors of indigenous communities of the northern forest region of the State of Chiapas.

Through its programming, the radio station will procure to provide a communication and information service significant for the region, in terms of the Tzeltal indigenous communities, which implies to generate contents that actually represent the cultural identity through an indigenous worldview.

In the session held today, the Plenary decided to issue 24 concession certificates subject to being approved to exploit radio frequency stations:

The IFT reports the evolution of telecommunications services during the first quarter of 2014

• In order to consider more representative indicators, the IFT started to implement actions to define a new methodology to describe the evolution and behavior of the telecommunications sector
• In the meantime, the performance of some services will be reported quarterly
• In the period reported, restricted TV services grew 12.1%
• A total of 105 million mobile telephone subscriptions were recorded by the end of March

Due to the need of measuring the behavior of the main production variables of the national telecommunications sector, the Telecommunications Production Volume Index (Índice de Producción del Sector Telecomunicaciones, ITEL) was created in 2003. Eleven indicators were considered for its creation, which were those that best represented the sector at that time.

Therefore, ITEL measured the quarterly growth rate in terms of the traffic of minutes of mobile, national long distance, international long distance (incoming and outgoing) telephony services. By subscription, it measured the performance of fixed telephony, cable, satellite and microwave TV services, and Trunking & Paging services; as for satellite service, the indicator was the capacity used.

According to the methodology established from the beginning, the three most important variables in the composition of ITEL are the growth rates of: i) voice minutes of mobile telephony, ii) fixed local telephone lines, and iii) Trunking users. These three variables represent more than 80% of the index value. However, due to technology evolution, the performance of these three variables has been low.

As for data connectivity consumption and Internet access, have become increasingly important, so the index previously used to measure the evolution of the sector, is not applicable anymore.

Due to the changes in the preferences of the users in telecomm services and in order to consider the indicators to represent the behaviors of the sector more accurately, the IFT has started implementing the actions to define the methodology to describe the evolution and performance of the telecommunications and broadcasting sectors. This also includes processes oriented to define the variables, their time and geographical granularity, and the processes for their collection, recording, analysis and presentation. All of the above based on best international practices.

Therefore, the Institute will stop publishing the ITEL until its methodology is adjusted. Nevertheless, the IFT will continue issuing quarterly reports on the behavior of some telecomm services, such as:

Restricted TV

The restricted TV services, which are made of: cable, satellite or DTH and microwave TV, grew 12.1% during the first quarter of 2014.

The satellite or DTH TV services recorded a 10.9% growth, which in spite of being significant is lower than the growth recorded since 2009; i.e., the growth rate of these services has decreased. This modality recorded approximately a total of 8 million subscribers by the end of the first quarter of 2014.

Cable TV recorded a higher growth rate during the same quarter, 17.6% and finished the referenced quarter with a total of 7 million subscribers, representing 47% of the total users of restricted TV services.

The number of microwave TV (Microwave Multipoint Distribution Service, MMDS) subscriptions maintains its negative trend, decreasing at an annual rate of 16.4% during the first quarter in 2014, compared to the same period in 2013. By the end of this period, the service recorded more than 130 thousand subscribers.

Mobile Telephony

Mobile telephony recorded a 4.3% increase in traffic minutes run by the network during the first quarter of 2014. Three million subscribers were added during the quarter, compared to the same period the previous year, representing a 3.03% increase. The total subscription base is 105 million.

Regarding the market composition by type of subscription, by the end of the first quarter in 2014 there were 16 million post-pay users, representing 15.2% of the total market. While prepay modality recorded 88.8 million subscriptions, a 3.4% growth compared to the same period in 2013, and 84.7% of the total market.

Messages sent (SMS) through mobile telephony recorded a 35.3% decease, compared to the first quarter in 2013, which equals an average of 144 messages sent by subscription during that period, the lowest figure recorded since the second quarter of 2009, reaching a maximum historical record of 252 SMS during the same period in 2012. This downward trend could be due to the migration of users to data-connectivity communication services (for example: Whatsapp, Skype, Messenger, Line, and Telegram, among others).

National Long Distance

During the quarter reported, the traffic measured in minutes grew 20% compared to the same quarter the previous year.

The national long distance average fee recorded was 0.67 pesos per minute.

International Long Distance

In the referenced quarter, the incoming international long distance traffic minutes increased 4% compared to the third quarter in 2013.

The outgoing international long distance traffic minutes recorded a 15% growth during the quarter reported, compared to the same period the previous year.

Trunking

During the last quarter of 2014, the number of users in this segment decreased 53.8% compared to the same period in 2013, which was the lowest rate reported since its behavior started to be measured.

The users of trunking services are migrating to the latest mobile technology services, recording 1.78 million users by the end of the first quarter in 2014.

Satellite Supply

This segment recorded an annual increase of 4.5% during the first quarter in 2014. Megahertz (MHz) is the unit used to measure satellite capacity supply.

Local Telephone Fixed Line

By the end of 2014 first quarter, the total number of fixed telephone line subscriptions was 20.4 million, which represented 200 thousand lines more than those recorded during the same quarter in 2013.

Fees Evolution

The expansion of Internet services, lower Internet access fees and competition in telecomm markets forced concessionaires to offer packages and promotions with increasingly attractive fees; therefore, fees tend to decrease in nominal and real terms, allowing an increasing number of inhabitants to have access to these services.

According to the information provided by the National Institute of Statistics and Geography (Instituto Nacional de Estadística y Geografía, INEGI), telecomm services costs, according to the sub-indexes of the National Index of Consumer Prices (INPC), showed a significant decrease during the first quarter in 2014.

During the quarter reported, the Sub-Index of telephone services fees decreased 4.6%, compared to the same period in 2013, including a 3.8% decrease of local fixed services, 3.0% reductions in national long distance and international long distance services, and a 5.4% decrease in mobile telephony services.

As part of the Sub-Index of other recreational services estimated by INEGI, there are actual reductions of 2.2% and 4.3% in pay TV and Internet services, respectively, compared to the same period in 2013.

It is important to highlight that the measurement of telecomm services fees made by INEGI is part of INPC's objectives, which include measuring the evolution, in time, of the general-cost of goods and services consumed in urban households in the country. In this sense, the representativeness of their considerations focuses on creating a set of goods and services to properly reflect household consumer patterns.[1]

The IFT Plenary decides to modify the dates foreseen in the call to tender bids on free-air-television frequencies to form at least two new networks with national coverage

• The change applies to numerals 2.2 and 2.3 of the Call fixing the dates so that the interested parties request a favorable opinion in matters of economic competition and so that they may be notified on the answer to their request, as well as the dates foreseen in the calendar of the Bidding Rules
• With this decision, the Plenary offers greater certainty to the interested parties and promotes the maximum competition in this process to tender bids

In order to observe the constitutional instruction to assure the maximum competition in invitations to tender bids of the radio spectrum, promote competition and offer greater certainty to the interested parties, today, in an extraordinary session the Federal Telecommunications Institute (Instituto Federal de Telecomunicaciones, IFT) Plenary, approved the modification to the dates contained in numbers 2.2 and 2.3 of the Call to Tender Bids to Concession the Use, Benefit and Commercial Exploitation of Broadcasting Channels to provide Digitally Broadcasted Public Television Services , in order to form two National Networks in the United Mexican States, published in the Federal Official Gazette on March 7^th of 2014, as well as the calendar foreseen in the Bidding Rules.

Thus, the Plenary decided to modify the dates so the interested parties submit their request of favorable opinion in matters of economic competition, from June 16th and 17th to September 2nd and 3 rd of the current year. Insofar that this is the first act set forth within the tender bids process entrusted to the potential interested parties; consistent with this change, the following dates foreseen in the calendar of the Bidding Rules were also modified.

The Institute Plenary adopted this decision insofar that the issuance of the regulatory law derived from the decree to reform the Constitution in Telecommunications and Broadcasting matters is pending, there is no certainty on some aspects that may have an impact in the business plan of the interested parties, which could become a disincentive to investment, both for potential participants and for the obtainment of financing.

With this decision, the IFT Plenary allows the participation of potential interested parties in the invitation to free-to-air television frequencies tender bids may have greater certainty on the regulating framework that will govern the concessions thereof, which may have an impact in their will to participate, or in their bids. The foregoing is consistent with the instruction to assure the maximum competition in competitive bids regarding radio spectrum concessions, set forth in Article 28 of the Constitution, which purpose in the particular case is a greater competition in free-to-air television.

The IFT confirms its commitment to the public interest to promote greater offers of services in the different markets it regulates, to the benefit of the Mexican people.

The IFT Plenary identifies the relevant audiovisual contents, of which, the Preponderant Economic Agents in the broadcasting and telecommunications sectors will not be able to obtain exclusive transmission rights

• The resolution is based on the analysis of a universe of 220, 724 audiovisual contents issued between April 1^st, 2010 and April 30^th, 2014
• Contents determination was based on their reproducibility and the high regional or national audience level expected

According to the Resolutions through which the Preponderant Economic Agents of the telecommunications and broadcasting sectors were determined, The Federal Telecommunications Institute (Instituto Federal de Telecomunicaciones, IFT) stated that these Agents shall not be able to acquire exclusive transmission rights for any location within the national territory of Relevant Audiovisual Contents, nor carry out similar actions.

The definition of these contents is extremely important, since by being exclusively engaged by the Preponderant Economic Agents, they help them strengthen their position before the audiences and limits other participants of the market to compete effectively.

Therefore, in order to have enough technical elements, the Radio and TV Systems Unit of the Institute (USRTV) made an analysis of a universe of 220,724 audiovisual contents of broadcasted TV transmitted through restricted or broadcasted TV during the historical period between April 1^st, 2010 and April 30^th, 2014, according to its non-reproducibility nature and its high national or regional audience expected level, based on the data provided by Nielsen IBOPE Mexico.

Such analysis is based on the rating or audience level, since it allows identifying which are the contents that attract more interest in a segment of the population during a certain period of time, and therefore, have more audience.

Therefore, in compliance with the provisions of the Third transitory article of Appendix 1 of the Resolution through which the Preponderant Economic Agent was determined in the broadcasting sector, as well as in the Second transitory article of Appendix 4 of the Resolution through which the Main Economic Agent was determined in the telecommunications sector, the IFT Plenary, during an extraordinary session held yesterday, identified such Relevant Audiovisual Contents for their non-reproducibility nature and their high national or regional rating expected based on the historical records of similar events, as follows:

a) Mexico National Soccer Team games (top male category)

b) The opening and closing ceremonies of the Summer Olympic Games organized by the International Olympic Committee

c) The opening and closing ceremonies, as well as the inaugural, quarterfinals, semifinals and final games of the Federation of International Football Associations (FIFA) World Cup, celebrated every four years and commonly known as the “World Cup”

d) The finals of the first division league tournament, organized by the Mexican Football Federation, known as the MX League.

This is how the provisions for the Preponderant Economic Agents of the telecommunications and broadcasting sectors are fulfilled as requested.

The IFT Plenary establishes the technical committees for the Local Network Electronic Systems for Management and Unbundling

• IFT issues operational rules for these committees and appoints the Commissioners who will govern them
• IFT approves the Call for the registration of representatives of concessionaires and virtual mobile operators interested in participating in these Technical Committees
• IFT resolves to grant extensions to 34 concession titles to install, operate and exploit a public telecommunications network with coverage in various locations in the country
• IFT approves sanctions and declares the loss of equipment in benefit of the Nation of three broadcasting stations in different bands of the radio spectrum that do not have the concession or required permission.

As reported, the measures imposed on the preponderant economic agent in the telecommunications sector, the Federal Telecommunications Institute (Instituto Federal de Telecomunicaciones, IFT) imposed obligations in terms of effective unbundling of the local network and determined that it must implement electronic management systems, through which the Institute, applicants for concessions and virtual mobile operators can consult remotely, at any time, updated information of the public telecommunications network and perform operations associated with the wholesale fixed and mobile telecommunication services.

In light of this, during the ordinary session held today, IFT Plenary established the creation of the Technical Committee for the effective unbundling of the local network, and two Technical Committees for the definition of Electronic Management Systems; one for mobile telecommunications services, and the other for fixed services. This meets the obligation to establish such committees within a period not exceeding 90 calendar days from the notification of the measures imposed to the preponderant economic agent.

These committees will define various technical aspects regarding the effective unbundling of the local network, such as the implementation schedule, parameters of quality and technical standards that allow the adequate provision of services, not to mention the formats, interfaces, security and encryption mechanisms, database management and all matters related to Electronic Management Systems.

The agreements shall be adopted by unanimity and be formalized by the Institute; if not so, the regulatory body will resolve definitively.

The Plenary issued the Operational Rules for the Technical Committees and appointed the following IFT officers to conform them:

For all committees, the Unit Regulatory Policy holder will be the Deputy Chairman, and the General Director of Economic Regulation will be the Secretary.

The Technical Committees will also be formed by industry representatives, for which the Plenary approved the Call for the registration of public network representatives of the concessionaires of telecommunications and mobile virtual operators interested in participating in such groups, which will be published on the Institute website.

On another note, the IFT approved sanctions and declared the loss of equipment in benefit of the Nation of three broadcasting stations in different bands of the radio spectrum that did not have the concession or required permission.

Two of the stations operated in the AM band frequencies with 710 kHz, 1070 kHz in the city of San Luis Potosí, state of San Luis Potosí. In both cases, the frequencies were related to changes from the AM to FM band and had concluded the right to use the amplitude modulation. A third case refers to the station which operated with the 90.1 MHz frequency on the FM band in Atizapán de Zaragoza, State of Mexico. The resolutions of these issues put an end to the procedures derived from the assurance of goods intended for the operation of the broadcasting stations mentioned above.

On another note, the IFT Plenary decided to grant extensions to 34 concession titles to install operate and exploit a public telecommunications network with coverage in different areas of the country, for a period of 10 years.

The cases are listed below:

With the granting of these extensions, the continuity of the operations and delivery of services in the towns involved is guaranteed, provides legal certainty to the concessionaires which will allow them to plan their investments, and also advances in the relief of administrative records.

The IFT Plenary decides to modify the operating specifications of number portability to facilitate this process for users

• The text message whereby the confirmation PIN is submitted to the number to be ported will change, in order to offer greater certainty and clarity in the communication with the subscriber
• A numeral is added regarding the obligatory accountability of concessionaires to deliver the invoice of the services contracted at least 10 in advance to the payment deadline
• It approves the granting of 7 new concession certificates and 21 extensions of concession certificates to install, operate and exploit a public telecommunications network to individuals and corporations in different cities of the country

The Federal Telecommunications Institute (Instituto Federal de Telecomunicaciones, IFT) Plenary decided to modify the operating specifications to implement number portability, in order to this process to be more expedite and transparent for users.

Number portability is the right of subscribers to keep their telephone number, notwithstanding the concessionaire of public telecommunications network they may choose.

The modifications approved by the Plenary derive from the agreements unanimously reached in the Technical Portability Committee, the forum presided and coordinated by the IFT, and in which providers of telecommunication services participate, for whom the number has been assigned.

One of the essential requirements to carry out the number portability process in the case of subscribers of prepaid mobile telephone services is that the user requesting the change may have a Personal Identification Number (PIN) of confirmation. This number is generated by the Database Administrator (Administrador de la Base de Datos, DA or ABD) and sent through a text message to the number to be ported, by the telephone company request to the telephone company the user wants to change to.

With the change approved today by the Plenary, the text message must state: “The change of your mobile telephone company has commenced. Deliver the code to the new company only if you wish to make the change. Your portability PIN is XXXX” (Está iniciando su cambio de empresa de telefonía móvil, entregue la clave de la nueva empresa solo si desea cambiarse, su NIP de portabilidad es XXXX).

Thus, greater clarity, certainty and transparency will be offered in the message sent to the subscriber of local and mobile services in the prepaid scheme, and the risk of deceiving practices is diminished.

Likewise, the IFT Plenary decided to add number 2.3 ter of the operating specifications, regarding the mandatory nature for telecommunication services providers to provide, through any mean agreed by the parties, the pertinent invoice to the subscriber numbers, with the amount chargeable to such subscriber at least 10 calendar days in advance to the payment deadline of the telecommunications services contracted.

This measure is destined to offer users the elements to make easier the process for their telephone number portability whenever they decide so, and to reduce the obstacles that could exist to conduct the pertinent process.

Conversely, the Plenary decided to grant 7 certificate concessions to install, operate and exploit a public telecommunications network to an equal number of individuals or corporations in different locations of the country, listed herein below:

Likewise, it decided to grant 21 extensions of concession certificates to install, operate and exploit a public telecommunications network to an equal number of individuals or corporations in different locations of the country, listed herein below:

Finally, the IFT agreed to issue a permit certificate to install and operate Channel 49 of digital television in favor of the Government of the State of Morelos.

The IFT Plenary issues general guidelines for the authorization of additional services to broadcasting, telecommunications, and telephony concessionaires

• The Institute complies with the constitutional mandate of establishing general provisions so that concessionaires are authorized to offer additional services to the ones included in their current concession title
• The IFT will be able to set the requirements that broadcasting, telecommunications, and telephony concessionaires must meet to move to the sole concession model only when Congress issues the secondary legislation

In accordance with the provisions of Fourth Transitional Article of the Decree of constitutional reform in the telecommunications field, in extraordinary session, the Plenary of the Federal

Telecommunications Institute (Instituto Federal de Telecomunicaciones, IFT) approved, by means of agreement P/IFT/EXT/060514/102, the "General guidelines that establish the requirements, terms and conditions that the current concessionaires of broadcasting, telecommunications and telephony must comply in order to authorize them with additional services that are subject of their concession".

It is important to point out that at this time the Institute is only able to determine the requirements, terms and conditions which the current concessionaires who intend to request additional services to those authorized in the respective titles of concession must comply, given that to date it does not have the elements needed to define the requirements that broadcasting, telecommunications and telephony concessionaires must meet to move to the sole concession model due to the scope of such concessions being reserved to what the regulatory act determines which, in turn, will be issued by the Congress of the Union.

In this regard, the Guidelines approved today for the approval of additional services include the establishment of specific and general requirements applicable to all types of broadcasting, telecommunications and telephony services concessions, whether they are: (i) radio spectrum frequency bands concessions; (ii) public telecommunications networks concessionaires ; (iii) concessionaires with express prohibition or restriction to provide certain services, or, (iv) concessions whose holders have been declared as part of the interest groups that conform to preponderant economic agents, in accordance with the constitutional mandate.

The Guidelines that include the authorization which the Institute may issue with respect to requests for additional services will be without prejudice to the obligation to continue the provision of the services referred to in the concession in question.

These provisions will be published in the Official Gazette of the Federation in the next few days, for the purpose of their entry into force.

The Federal Telecommunications Institute Plenary decides to amend the policy of transition to Digital Terrestrial Television, DTT

(TELEVISIÓN DIGITAL TERRESTRE, TDT)

• Decides to adjust the date to conclude the analogue broadcasting of free-to-air television in the cities of Monterrey, Reynosa, Matamoros, Nuevo Laredo and Ciudad Juárez from May 29th of 2014 to November 26th of the current year.
• The resolution is based on the survey results carried out in such cities, which evidence that, currently, the TDT (Televisión Digital Terrestre) has no more than 90% of penetration in the services of broadcasted TV.
• At the same meeting, it was decided to impose fines and declare the forfeiture of the assets involved of two FM radio stations that operated without any permit or concession in the benefit of the nation

On July 31st of 2013, an amendatory ruling of the Policy of Transition to Digital Terrestrial Television DTT (Televisión Digital Terrestre, TDT) was published in the Official Gazette of the Federation (Diario Oficial de la Federación, DOF) which fixes May 29th of 2014 as the date when broadcasted analogue transmissions will conclude in the cities of Monterrey, Nuevo León; Nuevo Laredo, Reynosa an d Matamoros, Tamaulipas, and Ciudad Juárez, Chihuahua. Mentioned cities were considered as part of the pilot tests of the DTT Policy during the year of 2014.

According to the provisions of the DTT Policy, if one month before the month when the analogue switch-off must be conducted in a certain locality, the level of penetration of 90% of TDT has not been achieved, the date must be adjusted to carry out the conclusion of analogue transmissions in that city.

To this effect, and in order to have reliable information on the DTT adoption in five cities in the northern region of the country where the analogue switch-off was fixed for May 29th of 2014, the Federal Telecommunications Institute (Instituto Federal de Telecomunicaciones, IFT), through the Radio and Television Systems Office (Unidad de Sistemas de Radio y Televisión, USRTV), hired a company services to obtain information on the type of television received in such localities, in order to be aware about the DTT penetration levels.

On April 28^th, in an extraordinary session, the USRTV submitted a report to the IFT Plenary on the status of DTT penetration in the cities of Monterrey, Ciudad Juárez, Reynosa, Matamoros and Nuevo Laredo, with the following results:

• 8,786 surveys were conducted in these 5 cities
• The homes that have a television set, between 54 and 77 p e r c e n t depend on free-to-air television
• There is no equal penetration of DTT in these 5 cities or higher than 90% in homes that depend on free-to-air-television

Thus, since the condition of not having DTT penetration is equal or higher than 90% in the cities foreseen to carry out the analogue switch-off, the IFT Plenary decided to amend the Ruling whereby the Digital Terrestrial Television technological standard is adopted and the Policy for the Transition to Digital Terrestrial Television in Mexico established, published on June 2nd of 2004, amended, in turn, on May 4th of 2012, April 4th, June 1st and July 31st of 2013.

With this amendment, the date to conclude the analogue transmissions of broadcasted television in the cited five cities of the northern region of the country is adjusted; according to the general calendar set forth for 2014 in the DTT Policy is November 26th of 2014. The foregoing, without prejudice that the Institute may be able to review the dates set forth in the DTT Policy, once the work schedule mentioned by the Seventeenth Transitory Article, subsection IV, of the Decree of Constitutional Reform in telecommunications matters has been informed, considering the performance of pilot tests according to the best international practices.

Conversely, in the session held yesterday, the IFT Plenary was decided to impose several fines and declare the forfeiture in benefit of the nation, of the assets destined to operate two FM radio stations that broadcasted in the cities of Reynosa, Tamaulipas and Zacatecas, Zacatecas that did not have any permit or concession.

As part of the supervision actions conducted by the Institute to survey the radio spectrum, the pertinent proceedings and administrative procedures were conducted, outcome of which was the verification of the absence of concession certificates or permits that would evidence the legal operation of these stations. The IFT conducted the seizure of the assets destined to the operation of radio stations mentioned above, in order to prevent them from continuing their transmissions.

Thus, the IFT Plenary established, based on Articles 101, subsection XXIII, 103, 104 bis and 106 of the Federal Radio and Television Law, to impose penalties and declare the forfeiture of the assets destined to the operation of stations in the following frequencies and localities to the benefit of the Nation:

According to its responsibilities, the IFT will continue to conduct actions of surveillance so that broadcasting in Mexico is provided according to the terms set forth in the Law.