Background on Canieti and its Relevance
Canieti, the National Chamber of the Electronic Industry, Telecommunications, and Information Technologies, is a prominent organization in Mexico. Comprising leading tech companies such as AT&T, Axtel, Cisco, Huawei, IBM, Intel, Microsoft, Motorola, Nokia, Qualcomm, and SAP Mexico, along with thousands of regional technology firms, Canieti plays a crucial role in shaping Mexico’s telecommunications sector.
Canieti’s Stance on Government Participation in Telecom Market
Canieti asserts that the Mexican government should not engage in direct commercial activities or compete in the retail telecom market. The organization bases its argument on constitutional principles, such as neutral competition and regulatory criteria that recognize the potential distortion of market dynamics when public resources are used for commercial purposes.
Constitutional Principles and Regulatory Criteria
According to Canieti, the Mexican Constitution and regulatory criteria emphasize neutral competition. These principles aim to prevent the government from using public resources for commercial gain, which could create market distortions. Consequently, the government’s role in telecommunications should be limited to non-profit schemes ensuring access where market forces have fallen short.
Current Telecommunications Law and Government Involvement
The existing Telecommunications and Broadcasting Law restricts government involvement in commercial activities to wholesale networks. These networks are designed to commercialize capacity for other networks, promoting connectivity rather than directly serving end-users.
Canieti’s Concerns Regarding Proposed Legislative Changes
Canieti warns that allowing the government to compete in the retail telecom market would violate international agreements and investment protection treaties. The organization identifies five key concerns:
- Disruption of Competition Regime: Government participation would grant preferential conditions due to its status as a governmental entity.
- Unfair Advantage in Spectrum Usage Fees: The government would enjoy advantages over other telecom service providers regarding the 700 MHz spectrum band usage fees, which are currently ten times higher.
- Alteration of Shared Network Nature: The proposed changes would modify the nature of shared networks.
- Violation of Investment Treaty Standards: The proposed changes would contravene investment protection treaties with over 30 countries, including the T-MEC and TPP.
- Undermining Government’s Essential Role: The government’s primary role is to ensure connectivity in regions with insufficient or no access.
Potential Impact on Telecommunications Industry
Canieti highlights that urban telecommunications penetration is already high, with lower tariffs compared to other countries due to investments and competition. Allowing public commercial exploitation would compel the private sector to make additional, larger investments without corresponding returns in a distorted competitive environment.
Call to Action: Canieti’s Recommendations
Canieti urges the Mexican Senate to incorporate sector suggestions into the Telecommunications and Broadcasting Law’s legislative process. These recommendations stem from industry experience shared during analysis and proposal discussions for the law’s draft.
The sector’s future hinges on the legislative outcome, as investments, coverage, and industry development depend on the chosen model.
Key Questions and Answers
- What is Canieti? Canieti, or the National Chamber of the Electronic Industry, Telecommunications, and Information Technologies, is a prominent organization in Mexico representing leading tech companies and regional technology firms.
- Why is Canieti concerned about government involvement in the telecom market? Canieti argues that direct government participation in commercial activities or retail telecom markets would distort competition, create market distortions, and violate international agreements and investment protection treaties.
- What are the key concerns identified by Canieti? Canieti identifies five main concerns: disruption of the competition regime, unfair advantage in spectrum usage fees, alteration of shared network nature, violation of investment treaty standards, and undermining the government’s essential role in ensuring connectivity.
- What impact could allowing public commercial exploitation have on the telecom industry? Allowing public commercial exploitation would compel the private sector to make additional, larger investments without corresponding returns in a distorted competitive environment.
