US Broadband Providers’ Enthusiasm for New Tax Legislation
There’s a common thread among the leading broadband providers in the United States, both fixed and mobile. This enthusiasm stems from the approval of new tax legislation by the US Congress and its signing into law by President Donald Trump, known as the One Big Beautiful Bill (OBBB).
The new legislative package, which amends various laws or regulations, directs the regulatory body, the Federal Communications Commission (FCC), to identify frequency bands totaling 800 megahertz (MHz) within the range of 1.3 to 10.5 gigahertz (GHz) that can be auctioned off to generate $85 billion for federal coffers.
Intermediate Obligations and Spectrum Auctions
The legislation mandates intermediate steps, such as the FCC identifying and auctioning at least 300 MHz of spectrum within the first two years after the law’s enactment. Of these, 100 MHz must be allocated through competitive auctions.
Tax Incentives for Broadband Infrastructure
The new tax framework approved by the US Congress includes substantial tax incentives to accelerate investment in next-generation broadband infrastructure. For instance, AT&T plans to add one million broadband access points annually between 2025 and 2030, thanks to the new tax incentives. Comcast and Verizon also express enthusiasm for increased investment.
Anticipated Broadband Boom in the US
In the coming years, expect a resurgence in the US telecommunications industry with more infrastructure for next-generation mobile broadband services and higher-speed fixed broadband connections in more homes. Additionally, tax incentives for AI growth, such as data centers and server farms, will further boost the sector.
Mexico’s Broadband Landscape: A Different Path
In contrast, Mexico’s new telecommunications legal framework does not inspire investment in next-generation broadband infrastructure or establish a clear path for the volume of radiofrequency spectrum to be made available to the market.
Positive Aspects in Mexico’s Legal Framework
The only potentially positive aspect, in the author’s view, is Article 5 of the new Telecommunications and Broadcasting Law (LMTR), which prohibits states and municipalities from imposing specific contributions for infrastructure deployment. It encourages local authorities to collaborate with the new Telecommunications Regulatory Commission to facilitate infrastructure deployment.
Lack of Investment-Encouraging Measures
Beyond this explicit provision, there are no other measures that encourage investment. In a hasty move, without proper analysis of its necessity or benefits, the joint senate committee’s draft included a substantial change regarding contract adhesion obligations. This will stifle commercial dynamism in an industry known for innovation and excessively empower the Profeco with sanctioning authority.
Key Questions and Answers
- Q: What is driving enthusiasm among US broadband providers? A: The approval and signing of the One Big Beautiful Bill (OBBB) tax legislation, which mandates spectrum auctions to generate $85 billion for federal coffers.
- Q: What tax incentives are included in the new US tax framework? A: Substantial tax incentives to accelerate investment in next-generation broadband infrastructure, such as plans by AT&T to add one million broadband access points annually between 2025 and 2030.
- Q: How does Mexico’s broadband landscape compare to the US? A: Mexico’s new telecommunications legal framework does not inspire investment in next-generation broadband infrastructure or establish a clear path for spectrum availability.
- Q: What positive aspects are there in Mexico’s legal framework? A: Article 5 of the new Telecommunications and Broadcasting Law (LMTR) prohibits states and municipalities from imposing specific contributions for infrastructure deployment, encouraging collaboration with local authorities.
- Q: What criticisms exist regarding Mexico’s legal framework? A: The lack of investment-encouraging measures and the hasty inclusion of substantial changes regarding contract adhesion obligations, which may stifle commercial dynamism and excessively empower the Profeco with sanctioning authority.
