By Anthony Harrup 

MEXICO CITY--U.S. television studios are worried that a new telecommunications and broadcast law in Mexico could cost them millions of dollars in lost revenue under a draft proposal that would transfer half of their available advertising time to distributors such as cable and satellite television companies.

The measure, if confirmed, would affect planned investments in programming for the Mexican market and lead to higher subscription rates for Mexican viewers, said Gustavo Pupo-Mayo, chairman of the Television Association of Programmers Latin America, a Miami-based trade group that represents content producers such as Time Warner, Walt Disney Co. and 21st Century Fox.

An article in a draft version of a new telecommunications and broadcast law that President Enrique Peña Nieto is expected to submit soon to Congress requires that half the available advertising time on pay television systems be allotted to the system operators.

The draft isn't final and could undergo changes.

Mr. Pupo-Mayo said the trade association considers the measure to be confiscatory and a violation of several provisions of the North American Free Trade Agreement relating to equal treatment and intellectual property rights. Providers of pay-television content rely on both subscription fees and advertising revenue to maintain the quality of their offerings, he said.

Already, pay-television systems in Mexico have less available time for commercials than broadcast channels, and are restricted to 144 minutes of commercials for 24 hours of programming. Typically, the channels provide their own advertising for those slots. Commercials on free-to-air broadcast channels can cover 18% of transmission time.

The measure could potentially cost U.S. content producers around $950 million in lost revenue across Latin America in the five years through 2018, the Latin American Multichannel Advertising Council estimates. Pay television accounts for 12% of Mexico's roughly $3.1 billion in annual television advertising revenue, according to the council.

Mr. Pupo-Mayo said the Television Association of Programmers, whose members provide content through 120 channels in Latin America, was hopeful the article would be eliminated from the final version of the bill.

A spokesman for Mexico's communications ministry said late last week that there was no set date for the bill to be sent to Congress.

Mexico's cable industry association, Canitec, wasn't available for comment.

The new telecommunications and broadcast legislation follows constitutional changes made last year that shake up the industries with the aim of increasing competition and expanding coverage of broadband and pay-TV services through lower end prices for consumers.

Pay television is among the fastest-growing of the telecommunications services in Mexico, after mobile broadband. The number of subscribers to cable and satellite TV grew 13% last year to 14.6 million, according to regulators.

Fox and parent 21st Century Fox Inc. until last year were part of the same company as The Wall Street Journal.

Write to Anthony Harrup at anthony.harrup@wsj.com

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