Clarifying the Possibility of Extraordinary Congressional Sessions
There has been uncertainty regarding the possibility of extraordinary sessions in both chambers of Mexico’s Congress of the Union to discuss and vote on various legislative projects, including the Telecommunications and Broadcasting Law Initiative (“Telecom Initiative”) and the Economic Competition Federal Law Reform, Addition, and Abrogation Initiative (“Competition Initiative”). These will be debated and voted on in the Senate of the Republic as the chamber of origin.
Government Review and Adjustments to the Telecom Initiative
The federal government reviewed several aspects of the Telecom Initiative, sparking significant public debate. Adjustments are expected to correct the intent or scope of various provisions, including eliminating others that could impact Mexicans’ freedom of expression. The government aims to enhance telecommunications and radiodifusion infrastructure coverage through CFE Telecomunicaciones e Internet para Todos, in collaboration with Altán’s shared network.
- Key factors hindering infrastructure expansion, especially new-generation broadband, include:
- Lack of genuine effective competition
- High radioelectric spectrum prices
- Excessive and unequal local bureaucratic burdens for infrastructure deployment
- Excessive costs to extend infrastructure to remote, low-population areas
Price Trends and Regulatory Measures
The price per gigabyte, measured in dollars, significantly decreased in Mexico during the first three years following the 2013 constitutional reform. However, after the Telecommunications and Broadcasting Federal Law took effect, price reductions became less pronounced, with a slight increase observed from 2021 to 2023.
This performance can be attributed to measures introduced by Congress in 2014, such as the “zero-rate” policy. This policy mandated that dominant operators apply an implicit zero-peso rate for calls between users within their network. This led to a significant price war, affecting broadband services.
The Supreme Court later removed the “zero-rate” concept from the law, and IFT measures lost effectiveness over time. Consequently, Mexico’s price per gigabyte has not decreased as expected compared to other Latin American countries, primarily due to the disappearance of factors promoting effective telecommunications sector competition.
The Path Forward: More Competition, Less Government Intervention
The author, an economist, emphasizes that the primary reason for Mexico’s unfavorable comparison in broadband access speeds and prices lies in the evaporation of factors that once fostered effective telecommunications sector competition. The solution, therefore, lies in promoting more competition rather than increased government intervention.
Key Questions and Answers
- What are the legislative projects to be discussed in extraordinary congressional sessions? The Telecommunications and Broadcasting Law Initiative (Telecom Initiative) and the Economic Competition Federal Law Reform, Addition, and Abrogation Initiative (Competition Initiative).
- What issues prompted a government review of the Telecom Initiative? Concerns over aspects that sparked public debate, including potential impacts on Mexicans’ freedom of expression.
- What factors have hindered telecommunications infrastructure expansion in Mexico? Lack of genuine competition, high radioelectric spectrum prices, excessive local bureaucratic burdens, and high costs for extending infrastructure to remote areas.
- Why have prices per gigabyte not decreased as expected in Mexico? The disappearance of factors promoting effective telecommunications sector competition, including the loss of effectiveness for regulatory measures like the “zero-rate” policy.
