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Latino Daily News

Wednesday December 5, 2012

Carlos Slim Facing Increased Scrutiny of Telecommunications Monopoly, Rally Planned

Carlos Slim Facing Increased Scrutiny of Telecommunications Monopoly, Rally Planned

Photo: Carlos Slim Facing Increased Scrutiny of Telecommunications Monopoly, Rally Planned

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On Thursday, December 6, hundreds of Los Angeles Latino and community leaders are joining Two Countries One Voice in a rally against the world’s richest man, Carlos Slim, 72, and calling on the California Public Utilities Commission (CPUC) for a full investigation of a recent merger involving Slim’s TracFone.  Two Countries One Voice is dedicated to exposing the predatory, monopolistic practices of Carlos Slim, the richest man in the world.  Recently, Slim zeroed in on California when one of his telecommunications’ companies, TracFone, acquired California-based Simple Mobile without any public hearings or review by the California Public Utilities Commission (CPUC). Prepaid mobile providers like TracFone and Simple Mobile largely serve immigrant and working families.

The rally/protest follows a recent press conference of several state leaders including Los Angeles State Senator Kevin De Leon and State Senator Ricardo Lara for more government oversight on mergers that could harm millions of underserved Californians, which included new legislation that ensures the CPUC has the authority and discretion to review mergers involving pre-paid cell phone services when it’s in the best interest of the public.

Slim’s power and fortune is made up primarily from his monopoly on the Mexican telecommunications system, which has allegedly overcharged billions of dollars to the Mexican people, namely to the rural poor.  The welfare loss Mexico is believed to have endured is estimated at $129 billion.

According to the independent and highly respected The Organization for Economic Cooperation and Development (OECD), Slim’s company, America Movil, which controls nearly 80% of the total Mexican cell and landlines, charges exorbitant prices and provides inadequate services. OECD’s report also shows that Slim has price-gouged Mexican customers billions of dollars for basic telephone and Internet service.  They point out that those specifically and most profoundly affected by these business practices are rural and poor communities.

When Slim’s company, TracFone, purchased California-based Simple Mobile in June 2012, the CPUC did not require hearings or scrutiny of the acquisition.  The current law does not require the CPUC to hold hearings and is prescriptive as to when the CPUC may deem additional hearings necessary in the public interest.

In the United States, Slim has four million TracFone customers participating in government phone assistance programs.  Slim has collected $10 per phone he provides to these consumers, totaling a minimum of $38 million in U.S. federal subsidies this year alone. Yet, TracFone refuses to pay its share of the public services fee that funds California’s programs for the poor.  By some conservative estimates, TracFone may be liable for $13 million in unpaid fees and additional penalties to the CPUC.