Cablevision: What is Telefónica's claim to the government and what judicial way it analyzes to stop the merger

The telecommunications market "is on fire" and this is not for nothing, because behind the decisions taken by the government – or those that will be taken – there is a dispute of [plusieurs milliers de dollars].

For the time being, Telefónica has already filed a claim following the official approval, with limitations, granted to the merger between T elecom and Cablevisión

After this presentation, doubts arose in the market as to the position the government was going to take. A few days later, it was learned that the claim had been categorically rejected by the national authorities.

Why? Officials say it is a fait accompli and that all necessary limitations have already been established to avoid market concentration and thereby protect competition.

In its application, Telefónica accuses the Ministry of Commerce (SdC) of allowing a merger involving a "discriminatory" agreement with the rest of the country's telecommunications operators.

According to the company, the union of Telecom and Cablevisión companies led to a ] concentration of nearly 60% of the fixed broadband market at the national level and up to 90% in some cities.

They also dispute the decision of the official body to consider that it does not promote competition and that It will harm the users, "who will have serious difficulties in many areas of the country to freely choose the type of connectivity they want and the price to pay for it. "

or, from high official sources consulted by iProfesional who participated in the process that led to the approval of the agreement, specified that it was not necessary to there is no possibility of that be reversed.

They rejected Telefonica's proposals and recommended that their leaders "carefully read the decision of the Ministry of Commerce", since every criticism of the European operator is answered.

opinion that takes care of the competition In the disinvestment bonds Telefonica meets its demands, for which there will be no possibility to review the merger ", they say the government.

anyway, they explain that the logical process and established in the Law of Defense of the Competition allows the company to resort to the Civil, Commercial and Federal Justice.

"If they are dissatisfied, the way is to resort to judicial jurisdiction

For example, they refer to the fine recently imposed on SADAIC by the Ministry of Commerce ($ 42 million), for having figured out that it "excessive price" in copyright tariffs that pay hotels and other establishments that offer accommodation.

"SADAIC does not agree with the sanction and will appeal to Justice", they support the sources, for which Phone should follow if it considers itself aggrieved by the merger Telecom-Cablevisión.

"What she can not do, is to challenge a government decision because does not fit since they were not caught in the file ", add officials.

Second round at ICSID?
From another public body related to the sector said iProfesional that to allow the judicial route Telefonica should obtain the approval of the Trade Secretariat .

"This entity must allow the appeal and only then can it submit a proposal in court," says one of its members.

In addition, he refers to Article 53 of Law 25,156 on the defense of the that the appeal is to be formed under 10 working days of the notified resolution.

In the case of Telefónica, it would not have been included in the public record to study the scope of the merger of its competitors, therefore the Secretary of Commerce could not grant him a call some experts understand it.

"It had to be accepted previously as a party to obtain the grant of the resource by the agency to the Telefónica who called," they add.

However, in his claim, the Spanish operator claimed to have initiated the corresponding lawsuits in the national courts as a result of a decision considering njusta and discriminatory.

But, moreover, he hinted that he was badyzing " all the international tools at his disposal for the defense of his rights."

In this last paragraph, without admitting it openly, leaves open the possibility of recourse to recourse to ICSID a body of the World Bank entrusted with receiving complaints from companies against national States .

In fact, in this jurisdiction Argentina has 11 pending cases the majority initiated by large international groups under the Kirchner government.

However, for the current government the proposal of Telefónica can not be compared to any of the causes against the country they are dealing with at the ICSID

Understand that it contains none of the condiments used by the companies that turned to this international entity because the merger was approved under the framework

In addition, they are encouraged to consider that behind the protests of Telefónica are d & # 39; other objectives related, in one way or another, to respond to the lack of investment in Argentina or to support to negotiate profits as part of the process of opening telecommunications sector.

"They warn that they will not invest in the country because of this merger in other markets such as Brazil Colombia and Mexico announced heavy disbursements to compete, "the sources said.

In this sense, the operator has announced in Brazil, where it is present with the brand Vivo, new digital video services in their fiber optic Internet plans. To this end, will allocate 7.4 billion US dollars until 2020.

In the case of Colombia, Movistar has invested more than 3.1 million US dollars in its network of fiber in the capital of this country.

"Must have other interests in Argentina, since the merger is completely legal and can not be considered a case for ICSID, all rights of competitors have been respected, no law It was modified They emphasize near Casa Rosada.

In response to iProfesional request from local offices of Telefónica, they simply explained that the judicial strategy will be established by the company mother in Spain

On the side of the company Claro, they preferred not to comment on the proposal of Telefónica, although they warned: "We want clear rules for the three operators of the market."

Telecom-Cablevisión comment to understand that it is a "We can not comment because it does not correspond to us," they add in the company's fund Fintech , by Mexican businessman David Martínez

Answers from the government, angry Telefónica
In the case of the Ministry of Commerce, his spokesmen considered that the majority of Telefónica's complaints were answered in the approval report of the operation.

" There is no dominant position or concentration The boundaries of the merger have been clearly established to defend the users," the agency says.

It happens that in the document of the National Commission for the defense of competition (CNDC) that the of 200 pages, certain limitations and disinvestments are imposed, because Telecom will have to restore 80 MHz spectrum in order to compete in the mobile phone sector.

affect broadband users in 28 localities, approximately 143,464 customers in Córdoba, Buenos Aires, Entre Rios, Misiones and Santa Fe (billing $ 500 million).

In addition, the report makes recommendations on disinvestment commercial offers, network availability and spectrum.

To "avoid the benefits" of being the first operator to offer the service of quadruple play, forced Telec om-Cablevisión not to offer packages of its services for a period of six to 12 months depending on the region.

For its part, Telefónica understands that the notice will not limit the anti-competitive impact of the merger, "since the merged company will for a long time be the only company that will to offer integrated packages in Argentina. "

It does not impose either – still according to Telefónica – measures of It also ensures that it does not establish conditions permitting to prevent Telecom to have an access preferential content relevant to competition in the Argentine territory and that it has also not established rules for its use. marketing without discrimination for all competitors.

" Does not solve the clear competitive advantage that Telecom has in the spectrum provide mobile services (80 MHz more than its competitors), but simply recommend to Enacom to prevent the merged entity from using that spectrum until it executes its return, "he says.

The complaints also relate to the market monopoly processes that occurred in member countries of the Organization for Economic Co-operation and Development (OECD), arguing that the level of concentration that resolution allows, without guarantee an environment of effective competition, is unprecedented in all the countries that compose

At this stage, the government reminds Telefonica that Argentina is part of the OECD for which respects the limits scope and measures that are adopted in this entity.

Thus, things, the conflict between the Spanish operator and the government by the merger Telecom-Cablevisión goes way to judicializar although It remains to be seen whether Telefónica's parent company will open a new international legal body against the country.

If this occurs, it will be the first case raised in ICSID by a foreign group during the administration ] Macri .