Mexico’s Congress has approved the constitutional reform for the elimination of the Federal Institute of Telecommunications (IFT) and the Federal Competition Commission (Cofece) as autonomous constitutional bodies. The reform establishes that the IFT’s regulatory powers on telecommunications would be exercised by the entity in charge of telecommunications and broadcasting policies, the recently approved Agency of Digital Transformation and Telecommunications (ATDT). This will form part of the Executive Branch.
A new and single competition authority
The bill was modified from its original proposal to create a new Authority of Free Competition and Concurrence, which merges the competition faculties of Cofece and the IFT. It was also modified to establish that Promtel, a public partner of the Red Compartida, will be part of the Ministry of Infrastructure, Communications and Transports (SICT), rather than being at the Agency of Digital Transformation and Telecommunications (ADTT), as was previously considered.
The new authority will have a legal personality and its own assets and be endowed with technical and operational independence in its decisions, organisation, and operation. Separation between the authority that investigates and the one that resolves the procedures will also be guaranteed. Its proponents underscore that these changes are consistent with the USMCA.
Entry into force within 180 days
The legislative branch will have 180 days to make the legal modifications that this constitutional reform requires, including the operational characteristics of the new entities required for its implementation. The administrative extinction of the IFT and Cofece will occur when the president publishes the corresponding extinction decrees. Therefore, the IFT and Cofece will continue working with the same Commissioners and organisation until the above-mentioned changes take place.
The bill needs the approval of the Senate to be published by the president. Since this is a constitutional reform, it also requires the approval of at least half plus one of the local congresses of Mexico. No issues are anticipated during this process.
Future challenges
This constitutional reform has been called organic simplification and was originally proposed by former president López Obrador. As a result, the regulatory and competition tasks that were previously carried out autonomously and independently of the Executive Branch will now be carried out by the Executive Branch itself.
The modifications to the original bill fostered by President Sheinbaum are positive under the USMCA framework. However, concerns about changes to a regulatory framework that was previously functional and known may only be resolved when the secondary legislation is completed and implemented.
The Legislative Branch has 180 days to make any necessary legal changes. These should include mechanisms that ensure transparency and predictability, as well as the independence and impartiality of the new entities. One of the main issues to consider is preserving the human resources capabilities generated by the IFT and Cofece, especially when the merger of competition capabilities for the new Authority of Free Competition and Concurrence is carried out.
Meanwhile, a slowdown in activity could occur at the IFT and Cofece. However, if regulated companies need to sort out issues that can be resolved in less than 180 days, it is worth working with the IFT and Cofece to conclude them positively. This is important, as the learning curve of the new entities will take time.
Navigating the future of regulation in Mexico
With Congress approving a constitutional reform to eliminate the IFT and Cofece as autonomous constitutional bodies, the landscape of regulatory and competition oversight in Mexico is shifting dramatically.
As these functions transition to the newly created ADTT and the Authority of Free Competition and Concurrence, stakeholders face both challenges and opportunities. The next 180 days are critical for shaping the legal and operational framework of these new entities and ensuring a transparent, predictable, and independent regulatory environment.
What you can do
Act now on pending matters: Regulated companies should work with the IFT and Cofece to resolve ongoing issues before their extinction. This proactive approach can mitigate potential disruptions as the new entities develop their capabilities.
Engage in shaping secondary legislation: Participate in discussions to advocate for mechanisms that ensure transparency, predictability, and the retention of key human resources within the new regulatory bodies.
Monitor implementation closely: Stay informed about developments in the transition to the ADTT and the new competition authority and prepare for possible operational delays during this period.
How we can help
As the leading tech policy firm, Access Partnership can guide you through this transformative period. Our expertise in regulatory advocacy and market strategies ensures that your organisation is prepared to adapt to these transformations.
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].
