"If we have to reach the government, we are going to repeal the media law," the now Secretary of the Presidency of Uruguay, Álvaro Delgado, had advanced in June 2019. In fact, on March 1, 2020, Luis Lacalle Pou assumed command of the country, and two months later, the draft Law on Audiovisual Content Dissemination Services was sent to Parliament, to modify the current Law on Audiovisual Communication Services (SCA, number 19.307), approved in 2014 during the government of José Mujica.

The Uruguayan president's intention was to approve the regulations quickly, but at the end of 2020 and in view of the many controversies that appeared, the Industry Commission decided to postpone the vote until this year. At the end of the day, as of last December, consensus had not been reached on some articles, and remained to receive delegations with requests for audience in the Deputies' Industry Commission. Now, with the 2021 legislative sessions formally started on February 15, the issue leads the agenda of priorities of the pro-government parliamentarians. And it is very likely that the new law will be approved before the end of the first semester.

In the original project, dated April 2020, the current regulations are branded as extensive, as it contains 202 articles, in addition to “hyper-regulatory, interventionist, discretionary and limiting of freedoms (…) unbalanced because it places the Executive Power in a position of supremacy in front of licensees”. In effect, the modification proposal triples the amount of media that the same person or company can accumulate, going from 3 to 8 licenses; it also exempts from the accumulation limits those who have less than 30% of share capital in each media; and endorses a foreign ownership of pay TV companies.

In short, it is a body of provisions almost "tailored" to the interests of the three large television channels in Montevideo –Channel 4, 10 and 12-, which in turn own the main pay TV operators in the capital. Article 34 of the proposed modification also establishes the automatic renewal of the current radio, broadcast TV and subscriber TV licensees. And it eliminates the CHASCA (Honorary Advisory Commission for Audiovisual Communication Services) and the holding of public hearings for the assignment of frequencies. As the National Human Rights Institution and the Ombudsman's Office warned, “the project only controls accumulation in natural and legal persons but it erases the notion of economic group, with which the demands of anti-concentration disappear because through family or business ties can control many more stations than the limit establishes”.

Towards convergence. The text presented by the ruling party in April 2020 considers the law approved during the Mujica government as "old, because it freezes in its provisions the proper convergence with technology." This refers to the inability of cable companies to provide broadband, a service that is restricted to the state-owned Antel. Thus, article 48 enables holders of television licenses for subscribers who operate via cable to request licenses "to simultaneously provide broadband services and Internet access through the use of their own networks or of resources that they contract with third parties.”

From the CUTA (Uruguayan Chamber of Television by Subscribers), its president Washington Melo praised the measure, since it ends years of limitation for cable operators, especially for the smallest. Although he acknowledged that this does not necessarily put an end to the agreements that many of these actors have with Antel, because the fiber laying faced by the state company already reaches 85% of Uruguayan households and would not make practical or economic sense to install parallel networks.

In the case of larger cable companies, such as TCC, the modification of the law may mean an important change in the nature of the relationship with Antel. Its CEO Javier Ruete explained in a talk with Convergencialatina: "We sell combined cable and broadband plans with Antel, but we always end up depending on the conditions formulated by Antel." An eventual data license for an actor like TCC would be “late” to compete with its own infrastructure against what is already deployed by Antel, but it would contribute to improving business conditions.

Regarding the local pay TV ecosystem, Ruete recalled that current regulations generated inconsistencies and ended up harming national companies: in particular due to the explosion of DirecTV in the Interior and Cablevisión's satellite license, which allowed it to achieve coverage of a large part of the territory.

Once these and other points under discussion have been settled, the correlation of forces in the Uruguayan Congress poses a favorable scenario for the approval of the law during the first semester: the opposition, essentially the Broad Front (Frente Amplio, in Spanish), has 40% of the benches, while the five factions that support the government of Lacalle Pau add 60%. Fabián Werner, president of the Cainfo (Center for Access to Information), anticipated that the suggestions for change raised from civil society organizations will hardly be accepted. "The project responds by 100% to commercial interests, the three main channels are the promoters of the reform and they will not have too many problems to obtain approval," he summarized.

An ideal setting for Telecom

The conditions established by the law promoted by Lacalle Pou create an ideal setting for an eventual expansion of Telecom in Uruguay. The situation also helps, taking into account that Telefónica is preparing its exit from Latin America with its spin-off plan announced in November 2019, and in the course of 2021 there could be spaces for regional or global players.

From the Broad Front, deputy Daniel Caggiani revealed to Convergencialatina his concern about a foreignization of TV channels under subscription in Uruguay from the proposal to modify the current law. In addition to the authorization of data licenses, the Argentine operator could find in Uruguay a development platform for its businesses outside of Argentina. Last December it was known that representatives of Telecom and Grupo Clarín traveled to the neighboring country and in an interview with the Uruguayan president they promised to expand investments.