FOLLOW THE MONEY: MEXICAN GIVEAWAY OF MILLIONS OF FLAT SCREEN TV’S TO THE POOR RAISES QUESTIONS

Follow the money on this one…Mexico is spending over $1.6 billion dollars on flat screens for millions at a cost of $145.00 instead of just $40.00 for a decoder box. I’m sure if you dig deep enough you’ll find some sort of Carlos Slim corruption. He’s the Mexican billionaire who made tons of money on the “Obamaphone” he provided for America. Nice, huh? We’ll be checking into this one just to see if there’s any connection to American corruption. It just doesn’t pass the smell test…

MEXICO CITY – Cradling a flat-screen television set in her arms, Tomasa Lopez beamed at her good fortune: She’d just taken part in the world’s biggest distribution of free digital televisions.

Lopez, a domestic servant, was among thousands of people who’ve thronged a cavernous tent in the populous working-class Iztapalapa district, one of hundreds of venues across Mexico where the poor are receiving some of the 10 million digital television sets the government is giving away at no charge.

It’s a program costing the Mexican treasury $1.6 billion in a push to convert the nation from analog television signals to a digital format. The United States made the switch in 2009.

“I am happy,” Lopez said. “We’ve always wanted a digital television. We’ll see more channels. The kids will see cartoons.”

Other nations, such as Argentina, have given away digital television sets, but none on the scale of Mexico, and the program has proved controversial. Critics question why the government of President Enrique Pena Nieto is giving away 24-inch flat-screen televisions, each costing around $145, when decoder boxes that allow older analog televisions to remain in use – the U.S. solution – cost only about $40.

It’s not just the recipients of TVs who benefit. Television manufacturers clustered along Mexico’s northern border also profit, as do the two powerful media conglomerates that are moving quickly into digital services. The two companies will soon face competition from a third television network mandated into existence in 2013 with a constitutional reform to bring greater competition to the industry.

At the entrance to the delivery tent, a recipient of a television set, Jose Luis Rodriguez, reproached a government official for suggesting the sets were free.

“Stop using that word. It’s paid for with our taxes. It’s not free,” sputtered Rodriguez, who works for the federal social security institute.

Already, the government has given away 4.6 million televisions in a massive operation that requires fleets of trucks to deliver the sets, and masses of workers to check documents, take fingerprints and scan the bar codes of the sets to ensure that each family gets only one.

Recipients are all low-income Mexicans who take part in one of several government social service programs, including Prospera, which is the national crusade against hunger, and Liconsa, a subsidized milk program.

A sense of urgency pervades the program. The constitutional reform enacted in 2013 gives the government a deadline of Dec. 31 to convert the nation to digital television. In recent weeks, government teams have been handing out 30,000 to 40,000 sets a day, but will have to double that figure to meet the deadline.

Administrators for the program say it will have many benefits, among them raising the number of people with access to the Internet and cutting electricity usage.

“An analog television consumes 320 to 340 watts, and if you add a decoder then it’s another nine watts,” said Javier Lizarraga Galindo, an adviser behind the program at the Communications and Transport Secretariat. “An energy efficient digital TV like the ones we are giving out in Mexico consumes less than 40 watts.”

Gabriel Sosa Plata, a professor at the Autonomous Metropolitan University and frequent commentator on television issues, said he thinks energy consumption might actually go up. Although analog signals are supposed to end on Dec. 31, he thinks many people will buy decoder boxes and move the old sets into their children’s rooms.

“Instead of having just one television, they will have two, and that means more electricity consumption,” Sosa Plata said.

Skeptics also question whether the TVs really will make the Internet more accessible. The digital TVs offered by the state have USB and HDMI ports, but hooking them to the Internet would require additional hardware and, for now, a contract with a provider, though the government has pledged eventually to offer free wireless service.

Mexico already provides free Wi-Fi at or near public parks, squares and government buildings in most of the nation’s 2,400 municipalities and under the telecom reform is required to expand it to as many as 250,000 sites by 2018. Still only about 50 percent of Mexico’s 120 million citizens regularly access the Internet.

Criticism of the program also has centered on the bidding for the purchase of the television sets. Mexico is the world’s largest assembler of TVs, producing between 35 and 40 million a year. Seven different companies with plants in Mexico, mostly along the U.S. border, have taken part in supplying the program.

“The first stage was not as transparent as it should have been. We were all suspicious,” said Jorge Negrete Pacheco, executive director of Mediatelecom, a consultancy in Mexico City on telecommunications regulation. “It was inevitable to think like this because none of the winners (of bids) were known brands.”

Negrete said the South Korean manufacturer Samsung was disqualified “for offering a better product” than required under the bid conditions. The winner of one bid sold televisions sets under the brand Diamante, largely unknown.

The two television networks, Televisa and TV Azteca, are installing digital transmitters around the country. TV Azteca broadcasts on 180 channels while Televisa operates 220 channels. The two companies capture a majority of all advertising spent in the country for all media.

By next year, however, a third network will step into the fray. Grupo Imagen Media, owner of Cadenatres, will begin broadcasting, after winning a bid in March to occupy 123 channels spread across the country:

HERE’S WHAT WE FOUND ON THIS – CARLOS SLIM CONNECTION:
Mexican media company Grupo Imagen, which has just won one of two new national TV concessions, may look to move into the lucrative telecoms sector, the chief executive of the family-owned company said on Thursday.

Grupo Imagen was awarded the free-to-air TV concession on Wednesday after bidding 1.81 billion pesos ($116.8 million). The auction was part of a government overhaul of the hidebound phone and TV markets, which are controlled by billionaire Carlos Slim’s America Movil and broadcaster Televisa.

Grupo Imagen, the media arm of privately held banking, hotel, construction and hospital company Grupo Empresarial Angeles (GEA), is run by Olegario Vazquez Aldir, an up-and-coming Mexican mogul.

In an interview, Vazquez Aldir acknowledged the threat posed to free-to-air TV by new technologies including Netflix, and said the company might at some point follow in the footsteps of Televisa, by looking to move into the more lucrative telecoms market.

“I don’t rule out that in the future, we could strike alliances with telecoms companies,” he said. “We understand perfectly well the challenges posed by new technologies, and that the younger generations are consuming content through other digital platforms.”

Vazquez Aldir said he had not spoken with Slim or any other telecom companies. Slim’s America Movil is trying to offload assets to comply with new regulation resulting from the government’s telecom reform, which was finalized last year.

Grupo Imagen expects to invest 10 billion pesos in the new network over the next 36 months, Vazquez Aldir said. It aims to be broadcasting in Mexico’s main cities by January 2016 and to have the rest of the country covered within three years.

The money would mainly be spent on buying or renting land to install broadcast infrastructure, he said, adding that the company hoped to sell its content eventually in the United States, to capitalize on the growing Latino market there

Negrete said the advent of a third channel “is a democratic message because it will offer a new source of information, different newscasts. This seems very positive.”

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