Mexico's CFC competition agency imposed a fine of 91.5 million pesos ($7.8 million) on Mexican fixed-line giant Telmex for refusing to connect the local subsidiary of Spain's Telefonica to its vast network.

By not providing a connection to fixed-line rival GTM for a period of seven months in 2007 and 2008, Telmex substantially impeded that company's access to the Mexican market, the CFC said in a statement.

Telmex has been guilty of similar monopolistic practices on other occasions, the regulator added.

Because only one operator was affected and for a limited period of time, the fine is much lower than the law permits in cases of repeat violations of anti-trust law, the CFC said.

Telmex, which is owned by billionaire Carlos Slim, has a dominant position in the market and its "behavior was aimed at, or had the effect of, substantially impeding" a competitor's access, the CFC said.

The agency said interconnection is "necessary to ensure competition in the telephone market."

CFC commissioners voted 4-1 in favor of imposing the fine. Telmex has 30 working days to lodge an appeal.

In late April, the CFC imposed a fine of 11.99 billion pesos ($1.03 billion) on another Slim company - Telcel, the Mexican subsidiary of regional wireless giant America Movil - for charging competitors exorbitant rates to connect to its network.

Telcel is the largest wireless operator in Mexico, while Telefonica's wireless subsidiary is a distant second.

The Mexican government last Friday denied Telmex's bid to offer pay-TV services, saying the company had not met certain requirements such as allowing competitors to connect to its network on "non-discriminatory" terms.

The decision stymied Telmex's plans to offer a "triple-play" package of phone, Internet and television in Mexico.