Introduction to Regulatory Changes
In the coming months, new laws on economic competition and telecommunications will be enacted, leading to the creation of new regulatory agencies. As a result, competition powers in telecommunications and broadcasting sectors will revert to the competition authority, while regulatory measures will be implemented by the Digital Transformation and Telecommunications Agency (ATDT). This setup mirrors the situation before the 2013 constitutional reform, which split the competition policy application into two autonomous bodies: Cofece and IFT.
Expected Benefits and Potential Issues
These changes aim to enhance consistency and specialization in applying competition policy tools. However, there’s a risk of returning to the excessive litigation prevalent before 2013’s reform, as separating the evaluation of competitive conditions from regulatory application may create a dual-track system that economic groups could exploit to delay or prevent regulatory measures.
Technological Advancements and Regulatory Challenges
The regulatory landscape could become more complex due to recent technological advancements, which have led to the emergence and consolidation of new digital business models. Authorities will attempt to apply corrective measures to address barriers to competition and free market access, as well as regulate essential input access.
Conceptual and Operational Changes in Legal Tools
Although no conceptual changes are expected in these legal tools, operational adjustments will occur due to the new interaction between regulatory bodies. Cofece will evaluate competitive conditions, while ATDT will implement regulations.
Key Questions and Answers
- Analytical aspect: How will the new regulatory setup preserve and develop technical capacity in both regulators to understand complex industry operations?
- Coordination aspect: How will increased litigation possibilities by private groups impact the regulatory process?
- Institutional design aspect: How will the new structure affect Mexico’s obligations under the USMCA?
- Organizational structure aspect: How will the competition authority and ATDT differ, with the former being a collegiate body and the latter having a single head?
USMCA and Regulatory Structure
The USMCA requires its members to have independent and impartial telecommunications regulatory bodies. Various digital businesses, such as content download services, have been under IFT’s regulatory scope. This might lead to the interpretation that ATDT should implement competition authority-derived regulatory measures.
Uncertainties and Potential Trade Negotiation Complications
The proposed structure’s acceptability by trade partners remains uncertain, as it will alter the current collegiate body setup and may raise concerns about policy application. Given that most significant digital economy companies are from the US, potential worries could complicate upcoming trade negotiations and spark discussions on preserving a collegiate structure for digital market and telecommunications regulation.
