The Television Association of Programmers in Latin America
is raising grave concerns over a much-touted merger in Chile that would effectively unite
the cable industry into one large MSO.
A letter sent by the TAP to a Santiago, Chile-based lawyer
made it clear that the organization -- which includes several U.S.-based networks
targeting Latin America -- was unhappy about the proposed merger between the two national
telcos: VTR S.A. and Compañía de Telecomunicacónes de Chile. The two companies include
investments from such U.S.-based companies as Tele-Communications International Inc.
(TINTA), SBC Communications Inc. and United International Holdings Inc., and they own MSOs
VTR Cablexpress and Metrópolis-Intercom. Combined, the telcos would control almost 100
percent of Chile's cable subscribers.
The letter raised concerns about VTR and Metrópolis
conducting their program-network negotiations in tandem. According to some sources, the
two MSOs have already begun coordinating their negotiation efforts in an attempt to drive
down programming costs.
'As you can imagine, any kind of concerted business
practices of these two systems can greatly impact the operations of our member companies,
and they can surely have the effect of impending or restraining free competition, possibly
creating a prejudice to the consumers,' the letter stated.
It continued, 'We would also ask you to gather any
further information that may be relevant to us in deciding whether [the] TAP or its
members may ... take any action that would impede the corporate combination or impose
limits on the types of concerted actions that these systems may make.'
TAP president Charlotte Leonard shrugged off notions that
the letter was in any way unusual. Leonard, who is also senior vice president and general
manager at Turner Broadcasting Latin America, said the TAP is constantly carrying out
research in markets where its members operate.
'The kinds of questions [asked in the letter] come up
all of the time. What's going on in Chile ... what businesses are doing there has
been a major concern,' she explained.
'We have to find out what it means for us, and [to do
that], you need someone who's on the ground locally. It's easier to have your
own attorneys,' she added.
Whether VTR and CTC will actually merge remains to be seen.
Talks between the two sides broke off late last year, after they failed to reach an
agreement, confirmed Ivan Siguel, a member of the Chilean Anti Monopoly Commission's
advisory board.
'The present situation is that these are two separate
companies, competing independently in the market,' he said.
However, he did not rule out the possibility that merger
talks, which have been taking place on-and-off over the last year, could be renewed in the
future. Even if the merger was approved, the cable aspect to the deal might still be
prohibited by the government.
