Colombia Makes Advances in Cable Licensing Effort

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Bogotá, Colombia — In a move that will help to bring
"informal" cable operations to an end in this country, Colombia's top
regulator late last month awarded regional cable licenses.

The National Television Commission (CNTV) doled out 103
local or municipal cable licenses for small and medium-sized cities last month. Most of
the winners had been family-owned informal cable systems.

The number of licenses issued was relatively low, however.
The CNTV could have granted licenses for as many as 164 localities.

The licensing process is designed to bring
"informal" operators — whose businesses are not entirely legal because they
began operating when Colombia had few pay TV laws — into a legal framework. Informals
represent between 3 million and 4 million pay TV homes, far larger than the existing
formal, or licensed, sector.

More than 60 local business proposals were rejected, either
because backers did not meet CNTV requirements, or because they were beaten by a rival
bidder.

In Bogotá, the municipal license was given to Superview
S.A. Satelcaribe S.A. and Cablevista S.A. won licenses for Northern Colombia. In Western
Colombia, a total of four companies obtained licenses including EPM-TV, a unit of one of
South America's largest utility companies.

EPM provides electricity, water, gas, long-distance
telephony services and Internet access throughout northwestern Colombia. It is now
expanding its fiber-optic network in the industrial heartland of Aburrá valley, in the
Medellín region.

In Central Colombia, the highest bidder was Cablecentro
S.A. Venezuela-based Supercable S.A. also obtained a license in this region covering the
capital of Bogotá, home to 8 million residents.

One surprise result was the award of a license to the
partnership of state broadcaster Inravisión and state-owned phone company Telecom
Colombia. Both companies had failed to obtain licenses in an ill-fated tender that came to
an abrupt halt last December.

For this reason, CNTV's announcement last week was a
milestone in an industry that has been grappling with how to deal with its unregulated
sector for more than a decade.

Now that the CNTV has made its decisions, most of the new
regional licensees are likely to begin buying out informals that either did not
participate or were rejected in the tender, said a senior executive at informal operator
Cablecentro who requested anonymity.

Cablecentro will expand its operations from Bogotá
throughout the entire central region. "What we have done until the moment, and
we've done a great deal, is absolutely nothing compared with what lays ahead,"
the executive said. "Now the real work and the big challenges begin."

New cable licensees have three weeks to sign contacts with
the CNTV and six months to start operations.

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