The Senate approved the new Telecommunications Law, as well as the reforms to the Federal Economic Competition Law, during an extraordinary session at the end of June.
In the telecommunications sector, the process that began at the end of April and was enriched by the discussions (conversatorios) led by Senator Javier Corral Jurado is concluding.
Below, we highlight four key elements of this new law.
New telecommunications regulator: Commission for the Regulation of Telecommunications (Comisión Reguladora de Telecomunicaciones, CRT).
The Commission for the Regulation of Telecommunications (Comisión Reguladora de Telecomunicaciones, CRT) will replace the Federal Telecommunications Institute (Instituto Federal de Telecomunicaciones, IFT) and will be a decentralised body (órgano desconcentrado) of the Agency of Digital Transformation and Telecommunications (ATDT).
The CRT will have technical, operational, and management independence and must act impartially in issuing its resolutions. This Commission will be composed of five commissioners, who will be appointed by the President and must be ratified by a majority of the Senate. The President will appoint the CRT Chairperson from among the ratified Commissioners.
It is important to note that for the new Law to enter into force, the first appointments must be made so that the CRT is fully integrated to serve as the new telecommunications regulator.
The CRT will have the same legal faculties as the IFT and some additional ones, such as working directly with the Ministry of Foreign Affairs to establish Mexico’s position on telecommunications matters. The ATDT will have public policy powers focused on the country’s connectivity and internet access, including the management of Mexico’s satellite capacity.
However, some opposition senators have expressed concern that the legal status chosen for the CRT (órgano desconcentrado) does not grant it its own legal personality, which could lead to its general decisions being challenged before the court for their legality. It has also been pointed out that the Senate does not have the faculty to ratify the CRT commissioners, so a constitutional reform is needed to address this situation. This situation could be solved by the current legislative majority that has passed the law.
A new competitor in the market: the Mexican government
The government has expressed its concern about ensuring that everyone has affordable internet access. The new law establishes a dual role for the government, which will be directly executed by the Federal Commission of Electricity (Comisión Federal de Electricidad, CFE). CFE is a major stakeholder (49%) of Altán Redes who operates the Wholesale Access Network, Red Compartida.
The first role of CFE is to expand telecommunications coverage in unserved areas and facilitate free internet access in public areas. As a public service, CFE could gain direct access to a public spectrum licence without cost.
The novel responsibility for the Mexican government is that CFE will participate directly in the commercial telecommunications market, which must be done under the principle of competitive neutrality. This principle has been reincorporated into the new law to ensure that the State does not have privileges over other market competitors, in order to avoid market distortion. Competitive neutrality is fundamental to complying with the provisions of the United States-Mexico-Canada Agreement (USMCA).
In this sense, CFE must participate in spectrum auctions to gain access for spectrum for commercial use, just as companies like Telcel and AT&T currently do.
Spectrum licences and a new scheme to facilitate innovation
The current scheme requiring a public auction for commercial use of spectrum is maintained. The new law also preserves that only a single licence (Concesión Única) is required to provide all the services that are technically feasible.
Seeking to address concerns about the high cost of spectrum in Mexico, the new law will allow companies to grant discounts on their annual spectrum payments in exchange for coverage obligations in geographic areas, highways, or roads. To date, it is unknown what these discounts will be and how they might be obtained; notwithstanding this, they could be established in the Federal Rights Law (Ley Federal de Derechos) published annually, as well as in CRT directives.
Furthermore, the new law establishes that there will be no payment for spectrum when the spectrum licence is granted for public or social use, such as for amateur radio or community networks. It also establishes that there will be discounts or payment exemptions for small telecommunications operators, which typically focus on populations far from large markets.
In terms of innovation, authorisation mechanisms are established for spectrum allocation, including shared-use schemes, experimental authorisations, high-altitude platform stations (HAPS), regulatory sandboxes, and smart radiocommunication networks for industrial purposes. The new law establishes the general framework for these authorisations, which will be further specified in the regulations issued by the CRT.
Digital Platforms
One element that shaped the discussions during the roundtables at the Senate (conversatorios) was the measures proposed in the original bill in April, which critics claimed could be used for prior censorship of communications, as well as for the blockage of digital platforms. All articles related to this discussion were eliminated from the new law.
The only measure established by the new law is that digital platforms whose content is available within the country cannot market advertising space for propaganda, or any information from foreign governments, other than that for cultural, tourism, or sports purposes.
Notwithstanding the above, during the discussions on the new law, the importance of drafting a specific law for digital platforms was highlighted. This could be in the form of a separate bill proposed by the Senate in the future.
What’s next
The new Law of Telecommunications and Broadcasting (Ley en Materia de Telecomunicaciones y Radiodifusión) will enter into force the day after the CRT is integrated, effectively dissolving the IFT and the previous Federal Law of Telecommunications and Broadcasting (Ley Federal de Telecomunicaciones y Radiodifusión). This will usher in a new era of regulation and a market with greater government intervention to foster internet access for the entire population.
Lastly, reforms to the Federal Law of Economic Competition (Ley Federal de Competencia Económica) were approved. In this regard, it is worth noting that a new competition authority, the National Antitrust Commission (Comisión Nacional Antimonopolio, CNA), will be created as a decentralised body of the Executive Power, with full legal personality (órgano descentralizado). The CNA will take the place of the Federal Economic Competition Commission (Comisión Federal de Competencia Económica, Cofece) and will absorb the competition faculties previously held by the IFT in telecommunications and broadcasting matters, including preponderance.
As experts in regulatory and policy advocacy, Access Partnership participated in the reform process, leveraging our local expertise and global experience to provide detailed recommendations and data-driven proposals, which fed directly into the bill’s changes.
As the leading tech policy firm, we can guide you through this transformative period. To learn how your organisation can navigate the implications of Mexico’s regulatory reforms and leverage opportunities in this evolving landscape, please contact Geusseppe Gonzalez at [email protected] and Fernando Borjón at [email protected].
