For the first seven years Telmex held a monopoly on phone service, and it succeeded in imposing some of the highest prices anywhere in the world. (All bidders were offered a similar competition-free period.) The market opened to rivals in 1997, and Telmex tangled with competitors repeatedly over the high access fees it charged them.
He and his Morgan colleagues knew that the safest way to make money was to own a piece of the management company and thus share in the highfees that investors were charged.
Consumer advocates dispute the industry's case, arguing that lenders will be able to fall within the new triggers by reducing fees and interest charged to meet the high-cost thresholds.