MARK STEVENSON
Associated Press

MEXICO CITY — Latin America’s richest man, Carlos Slim, owns so many companies that Mexico often seems like «Slim World» — and the magnate’s influence is so pervasive that it will probably endure, even as he gives up board positions and hands control of his companies to his sons.

Diners at one of Slim’s hundreds of chain restaurants can use a Slim wireless service to connect to Slim’s Internet provider to do online banking at Slim’s bank, or pay off credit cards for Slim’s department stores.

Outside in the street, vendors in jump suits bearing the name of Slim’s cell phone company — Mexico’s largest — sell prepaid phone cards to passers-by. Slim’s Telefonos de Mexico, or Telmex, also controls about 95 percent of fixed phone lines. Other street vendors sell Slim cigarette brands.

Some Mexico City shopping malls are also nearly one-man shows — many are anchored by his Sears de Mexico stores, and he recently bought out J. C. Penney operations here.

The malls are filled with Slim-owned record stores, sporting goods stores, drug stores, restaurants and bakeries. Even the ATM machines are linked to Slim’s banks.

«We would like a little more diversity, and not such a monopolistic atmosphere,» said Ricardo Benitez, a travel agent relaxing on his lunch hour in a 17th-century downtown courtyard in the shadow of a Slim-controlled office tower.

Slim himself reacts to the idea of himself as a monopolist with laconic humor. «What would that be like, a ’Slim World’? That would be nice,» he said at a 2003 press conference.

But Slim, 64, worth an estimated $14 billion, is gradually lowering his profile, at least technically. In June, he resigned from the board of Texas-based SBC Communications Inc. Earlier, he stepped down as chairman of the board of Telmex; sons and sons-in-law have assumed command of that and other businesses.

Analysts say those board changes are largely cosmetic, after financial markets reacted negatively to reports of Slim’s health problems a couple of years ago.

«It appears to be a strategic, preventative move to calm the markets, to show there will be an orderly transition in the management of his companies,» said Celso Garrido, an economics professor at the National Autonomous University of Mexico. «It’s hard to think of him retiring, and he appears to remain very active in the companies.»

Slim’s office said he wanted to «devote more time to his project for an infrastructure development fund in Latin America.» He says the fund would help revive local economies.

He has also purchased a stake in the huge construction firm Grupo ICA, which would probably get a share of projects in any infrastructure development; his bank is now positioning itself to do the same. So the development fund idea is thus pure Slim: philanthropy with an eye toward strengthening his businesses.

Slim also heads a private-government effort to restore the ancient downtown district and has snapped up dozens of properties there. Some of those who have worked on the project say Slim wants to go down in history as the man who saved the downtown district — and to populate it wall-to-wall with his stores.

Carlos Slim Helu — better known in Mexico as «Slim» — was listed No. 17 on Forbes magazine’s list of the world’s billionaires earlier this year. While making his fortune in Latin America, he has extended his empire to the United States, where he owns major stakes in companies including retailer CompUSA Inc. and networking company Global Crossing.

Like most Mexicans, travel agent Benitez has mixed feelings about life in Slim-world.

«It’s easier to pay bills now,» he said. That’s in part because so many Slim businesses accept payments for other Slim enterprises. «But at the same time, he’s got his finger in too many pies.»

The verdict on Slim’s legacy as a businessman is still out. Arturo Lomeli, who heads AMEDEC, a consumer-defense group, notes «Slim has improved service in some areas, but at a high cost to the consumers.»

Analysts say Slim has used lawyers and lobbying to defend hefty profit margins.

U.S. officials allege Slim’s Telmex was reaping improper profits by charging inflated connection charges for long-distance calls between the two countries, which may have cost consumers $1 billion per year.

The biggest cable television company, in which Slim long held a stake, has been slow to offer high-speed Internet access, which would compete with Slim’s telephone-based ISP.

Mexican regulators also have been slow to allow cable television companies to provide telephone service after Telmex complained about competition from them.

«He has probably limited development in some fields with his market power,» Garrido noted. «He’s certainly not one of the big promoters of innovation, and perhaps we don’t have as good services as we could have.»

Slim and his spokesmen refused to comment on those issues.

But teacher Manuel Sanchez, gave a typical view of the inhabitants of Slim World, as he paid a credit card bill at Sears:

«We’re just making this man richer every day.»

LORAIN — Phone customers in Lorain County will soon be charged long distance rates for some calls to other numbers within the county.

CenturyTel, along with all long-distance providers nationwide, will be changing how calls to certain cellular phone numbers are billed beginning in March, said company spokeswoman Joanette Romero.

Romero said the new billing plan will charge customers for calls to cell phones outside their service area, a new policy that has been overlooked for several months.

Local service for CenturyTel customers includes the communities of Amherst, Avon, Avon Lake, Birmingham, Lorain, Sheffield Village, Sheffield Lake, South Amherst and Vermilion.

Under the new plan, calls from those communities to cell phone numbers that fall in the Elyria, North Ridgeville, LaGrange or Cuyahoga County service areas could now be considered long distance.

In November, the Federal Communications Commission changed billing procedures, and the Public Utilities Commission of Ohio passed new tariff regulations, and CenturyTel must comply with the new rules, Romero said.

Starting March 2, charges for calls placed to cell phones from business or residence lines, called land lines, may be subject to long-distance charges based on the area code and prefix, which is the first three digits of a phone number. The change will affect more than 150 prefixes in the 440, 216 and 330 area codes.

The change was made partly to help pay the expense of cell phone number portability, according to telecommunications officials.

The FCC recently approved local number portability, which allows people to keep their cell phone numbers even if they change wireless service providers. Before this option, cell phone users had to stay with one wireless provider to maintain a cell phone number.

Wireless companies in the past followed a reverse billing agreement, meaning they covered long distance charges for incoming calls to their cell phone customers. Because a customer no longer needs loyalty to one company in order to keep a number, the wireless providers decided to stop paying reverse charges. Therefore, someone needs to pick up the tab and that will soon include those calling cell phones from a land line.

Connie Ferrer, a mother of four teenagers in Lorain, said she got herself and two of her daughters cell phones for the main reason of avoiding long distance charges.

’’It just doesn’t seem right,’’ Ferrer said. ’’I don’t think people understand at all how this will be affecting us. How can they be allowed to do this?’’

’’I heard about this plan, and I immediately looked at my cell phone number, which will cost me long distance to call from home,’’ she said. ’’I just hope enough people complain to make them really take a look at this.’’

Audra DiLuciano, the services manager for a law firm in Avon, said the new plan is ’’outrageous.’’

DiLuciano said the cost of using the 22 wireless lines of the firm’s attorneys will skyrocket, but if she changes the numbers to a local connection, the firm would have to buy new stationery and business cards, which all bear the employees’ current wireless numbers.

’’I am really, really angry,’’ DiLuciano said. ’’This is reprehensible and will be an unnecessary and huge cost to individuals and businesses alike.’’

Customers can log on to CenturyTel’s Web site at [ >>> ] to see a listing of which numbers will be affected, Romero said.

’’The whole point we need to emphasize is that we want our customers aware so they don’t incur charges they don’t expect,’’ Romero said. ’’People just need to pay attention and see if there is a number that will change their billing rates.’’

Customers have the option to pay individually for long distance calls as they are made, or they can sign on for one of two flat rate plans. Callers can refer to pages 17 through 19 in the company phone book for details about the long distance rates and plans.

’’It is confusing, but we have to be in compliance with FCC and PUCO regulations,’’ Romero said. ’’Some people may have some additional charges, and we want to eliminate or reduce this. We are alerting customers that if they make wireless calls, they should check with their long distance carrier to ensure they are not being charged,’’ Romero said.

Individuals can file complaints on the FCC or PUCO Web sites.

In another CenturyTel matter, the company has filed with PUCO for elective alternative regulation, a program that freezes basic local service at current rates, but allows the company to increase the rates of features, such as call waiting, caller I.D. or call blocking.

In December 2001, PUCO adopted rules to allow all of Ohio’s 42 local telephone companies to apply for the elective regulation feature. ’’The whole focus of the program is to get services to customers much quicker,’’ Romero said. ’’It makes the installation process for services much less cumbersome.’’

Romero said the plan has three main benefits to the customer. It sets local service fees; it makes high speed Internet access available to all customers; and it creates an enhanced lifeline assistance program, which assists low income families with phone bill costs.

The Ohio Commissioners’ Counsel, which acts as an advocate for the public, yesterday asked that PUCO not approve CenturyTel for the program. The plan will limit local service charges, but as a result, rates for features like long distance, extra lines or directory assistance can be raised, said Carah Brody, an OCC public information specialist.

’’These rules were intended to be allowed for companies who had competitive services,’’ Brody said. ’’CenturyTel has no competition in their area. If a customer doesn’t have a choice, it isn’t fair to continue raising rates for features.’’

Romero said any charge for a feature must be approved through PUCO, so the company does not have free reign to increase charges.

The plan was developed after PUCO held hearings through the state to determine what phone customers were looking for in their service plans, Romero said.

’’The OCC has stated these same arguments at every hearing,’’ Romero said. ’’But PUCO still went forward with the plan because they thought it was best for the consumer.’’

’’We are out for fair pricing and reasonable services for customers,’’ Brody said. ’’We think customers should have alternative choices.’’

KRISTA SCHULTZ

By DAVID ROYSE
Associated Press Writer

State phone regulators refused Wednesday to throw out a request by the state’s three main local phone companies to raise basic rates by a record amount, beginning at least two days of arguments over the merits of the proposal.

Attorney General Charlie Crist wanted proposals by BellSouth, Sprint and Verizon thrown out for lack of evidence that the requested rate hikes were in line with a new law requiring that consumers see benefits that make up for higher phone bills.

Basic local rates would go up by $3 to $6.86 a month, depending on the customer’s local phone company under the proposals. If the increases are approved, long distance companies are supposed to see corresponding savings from certain charges that they pass on to consumers, meaning higher local rates could be offset by lower long distance bills.

The Public Service Commission rejected Crist’s motion to deny the requests outright, saying it didn’t meet the high burden for throwing out a rate case without hearing arguments.

«If it’s going to be dismissed, at the end of the day I’d much rather dismiss it on the merits,» said Commission Chairwoman Lila Jaber.

A skeptical Commissioner Terry Deason cautioned that by going forward with the case, it didn’t mean the phone companies could assume they had a good argument, even suggesting the companies might want to withdraw their requests.

The Public Counsel’s office, which is opposing the rate hikes, argues household customers won’t see corresponding benefits, predicting the savings the long distance companies get will be passed on to businesses.

«Residential customers will not benefit if you grant these petitions, instead they will be harmed,» said Charlie Beck, of the Public Counsel’s office.

Long distance companies have filed numbers for what kind of long distance breaks customers might see, but they are sealed for competitive reasons.

AARP, the senior citizens’ lobby, also is against the increase, and was supporting Crist’s motion to have the rate hike thrown out before hearings were even held.

Any decrease from long distance rates that residential customers might see will be «smaller than a breadbox,» said AARP lawyer Mike Twomey. «It’s crumbs.»

Local phone companies argue that residential customers will benefit from competition in the local phone market, which should drive down prices and increase offerings of various types of services. They often point to the cell phone industry, which has unregulated competition, rather than each company having a geographic monopoly.

The companies also argue that commissioners should consider the benefits of competition in and of itself, regardless of what it does to rates. The Legislature determined that competition was a goal when it passed the bill allowing companies to seek higher local rates.

The industry argues that low limits on local charges are barriers to other companies getting into the market.

George Meros, a lawyer for a company called Knology, said his company would get into the local phone market if the rates were enough to offset the company’s cost.

«The granting of these petitions will enhance that competition to the benefit of residential customers,» Meros said.

The commission began hearing testimony and arguments over the proposals later Wednesday and was scheduled to finish Friday or Saturday. A decision has to be made by the end of the year.

SAO PAULO, Brazil, Dec 8 (Reuters) — Telos, the pension fund of Brazil’s long-distance phone company Embratel Participacoes, is studying the possibility of making an offer to buy control of the company from U.S. parent MCI , sources said on Monday.

Sources at Telos, formally known as Fundacao Embratel de Seguridade Social, and at Embratel (nyse: EMT — news — people) said the fund was sending the phone company’s workers a note indicating that it intended to analyze the acquisition at the request of some investors.

«We understand the economic scenario favors the operation,» the note said, adding that the acquisition could increase returns of the fund.

Embratel workers will receive more information about how to take part in the acquisition through Telos’ in-house television station, the note said.

Both Telos and Embratel declined comment.

MCI, the bankrupt No. 2 U.S. long-distance telephone and data services provider, said in mid-November that it had started to look for a buyer for its Brazilian unit.

The U. S. company, whose legal name is WorldCom Inc., filed for bankruptcy protection last year after becoming embroiled in an accounting scandal.

Analysts had bet that Mexican giant Telefonos de Mexico (nyse: TMX — news — people) would be the most likely candidate to buy Embratel.

Telos had a total of 2.1 billion reais ($713 million) in investments in its portfolio in October, 85.7 percent of which was invested in fixed income securities.

Embratel stock, which has soared since MCI put the company up for sale, was 2.7 percent weaker at 10.56 reais in early trade. ($1 = 2.946 reais)

Copyright 2003, Reuters News Service

Move boosts competition in Arizona

After a 20-year hiatus, the local phone company in Arizona is back in the long-distance business, and the move could lead to lower rates and more competition.

Qwest Communications International received unanimous approval from the Federal Communications Commission on Wednesday to offer long-distance services in Arizona. It was the last state in Qwest’s 14-state region to win such approval.

A study paid for by Qwest suggests Arizona consumers and businesses will save $198 million annually as a result of Qwest’s long-distance market entrance.

But regulators in other states where Qwest is already selling the service say the impact has not been dramatic.

«They’ve pretty much just matched the rates everybody else was charging,» said John Harvey, a telecommunications specialist with the Utah Public Service Commission.

Barbara Fernandez, spokeswoman for the Colorado Public Utilities Commission, agreed, but said a plus is that customers now have another choice.

«That’s been positive,» she said, noting that there have been few complaints about the service. Qwest has been offering long-distance in Colorado and Utah for about a year.

The Arizona Corporation Commission will meet in a special session today to grant a license to Qwest Long Distance, which expects to formally begin offering the service Dec. 15. Rates being offered in other states range from 5 cents to 15 cents a minute.

«Today marks another strategic milestone for Qwest,» said Richard C. Notebaert, Qwest chairman and chief executive officer. «Arizonans join millions of other Qwest customers who are enjoying the benefits of real long-distance competition.»

The decision marked the end of a three-year struggle for Qwest that included financial woes, allegations of misdeeds by former officers, abusive marketing and sweetheart deals with competitors.

Analysts predict long-distance will add $1 billion a year in revenue in Qwest’s region and enable it to better compete against companies such as AT&T, MCI, Sprint and Cox Communications, which also offer local service. Many of those companies are now offering traditional phone service in addition to long-distance. But more importantly, by adding long-distance to a bundle of services, such as local telephone and Internet access, Qwest makes its customers «sticky» or less likely to jump to a competitor.

Since the first of the year, more than 1.7 million customers have signed up for Qwest’s long-distance service in the states where it is available. Qwest has about 25 million local-service customers.

Baby Bells such as Qwest were barred from selling long-distance services when they were spun out of AT&T in 1984. The Telecommunications Act of 1996 offered long-distance as a carrot to get the Bells to open their markets to competition in local service.

Max Jarman
The Arizona Republic