Introduction to the Regulatory Body and Recent Announcement
Last Thursday, Mexico’s new telecommunications regulatory body, the Comisión Reguladora de Telecomunicaciones (CRT), issued a statement that surprised many. The announcement, titled “Cost of the radioelectric spectrum in Mexico is 7% below the international average,” came with a brief “methodological note” of just four pages. This article aims to provide context and clarify the implications of this decision.
Understanding the CRT’s Announcement
The CRT declared that the radioelectric spectrum bands allocated for mobile services in Mexico are 7% cheaper than the average price observed in a set of countries, as per data compiled by the former autonomous regulator, the IFT. The CRT’s methodological note, though brief, supports this conclusion.
The Controversy Surrounding the CRT’s Decision
What raises eyebrows is that the CRT attempts to downplay a finding reached by economists, valuation experts, companies, associations, multilateral organizations, and even authorities from other countries with a mere four-page note. The CRT seems to be avoiding a valuable public consultation on the spectrum’s value in Mexico, allowing for the swift implementation of discount policies based on coverage commitments from spectrum band concession holders negotiating with the Agency of Digital Transformation and Telecommunications.
Timeline for Consultation and Publication
The CRT claims to subject the legal provisions for these discounts to public consultation, with expectations of publication in the Federal Register this year. However, given the short timeframe for consultation and analysis of received comments, it appears unlikely that these provisions will be published in the Federal Register by the end of this year.
The CRT’s Primary Objective
The rush by the CRT appears to be promoting the idea that spectrum in Mexico is affordable, even cheaper than before, with further reductions expected through coverage-based discounts. This strategy seems more about publicity for implementing measures with limited or no real impact on assessing improvements in telecommunications infrastructure coverage.
Historical Context of Spectrum Pricing in Mexico
An essential aspect overlooked by the CRT’s methodological note is that the rights fees charged by the Mexican state for using 800 MHz and 1,900 MHz frequency bands—allocated for mobile services—largely reflect the pricing structure per megahertz per capita resulting from Mexico’s sole pure auctions for spectrum band concessions in 1997-1998, approximately 28 years ago.
This structure served as the basis for the Secretaría de Hacienda y Crédito Público (SHCP) to propose rights fees collection starting in 2003. Since then, both Cofetel and IFT had to navigate the challenge that rights fees undermined auction effectiveness, as spectrum pricing was largely predetermined by the Federal Radio Broadcasting Law.
The Unasked Question
An essential question the CRT should have addressed initially is whether the regional pricing structure embedded in rights fees, inherited from 1997-1998, remains valid under current national and regional conditions. Regrettably, the CRT did not even consider this question.
Key Questions and Answers
- What is the CRT’s recent announcement about? The CRT declared that the cost of radioelectric spectrum bands for mobile services in Mexico is 7% lower than the international average.
- Why is this announcement controversial? Critics argue that the CRT rushed to dismiss valuable insights from various stakeholders through a brief methodological note, potentially bypassing a crucial public consultation on spectrum pricing.
- What is the timeline for implementing these changes? The CRT plans to subject related legal provisions to public consultation, aiming for publication in the Federal Register this year. However, the short consultation period and analysis time may hinder timely publication.
- What is the historical context of spectrum pricing in Mexico? The current rights fees largely reflect the pricing structure from Mexico’s 1997-1998 spectrum auctions, which may not be suitable for today’s conditions.
- What question should the CRT have addressed? The CRT should have examined whether the regional pricing structure inherited from 1997-1998 remains valid under current national and regional circumstances.
