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CFE Telecom and the temptation of government interventionism

Mexico. Today connectivity is a constitutionally consigned right for all Mexicans, in recognition of their essential role in working, studying, communicating, appropriating cultural content, among many other activities.

The big question is how to achieve a scenario of full connectivity between the population. It is clear that it is not only a matter of infrastructure coverage, but of purchasing power, access to devices, digital skills and usage preferences.

Approximately one third of the population is disconnected due to lack of economic resources, since only 50.6% of households have a computer. Of the households that do have a PC, 85.5% have connectivity, according to the National Survey on Availability and Use of Information Technologies in Homes (ENDUTIH, 2018, INEGI). 

This is precisely the most important barrier to overcome to democratize connectivity.

- Publicidad -

Since the previous administration, the creation of sectoral programs and actions was arranged to bring connectivity closer to precisely those individuals who, due to their socioeconomic conditions, cannot be considered regular Internet users. Thus, the Mexico Conectado program, the Shared Public Network and the Backbone Network (still without definition of its developer) were created.

Recently President López announced the authorization to create a subsidiary company of the Federal Electricity Commission (CFE) that will be called "CFE Telecommunications and Internet for All" whose aspiration is to start operations in 2020 providing Internet to those disconnected localities, all non-profit, of course. This, from using the dark fiber optic infrastructure deployed by the company throughout the territory and via the establishment of service integration centers (about 10 thousand) that will connect with an antenna a designated public area and will support existing telecommunications operators.

In the case of Mexico, the government's experience in the provision of communications services resulted in two bankruptcy processes of the satellite company Satmex, an operation of a public monopoly (Telmex) without the ability to invest and extend its services that resulted in a black market for the installation of lines, a nineteenth-century administration of Telecommunications of Mexico (Telecomm), as well as poor service from Correos de México.

Historical and international lessons suggest that governments have left behind the temptation to be entrepreneurs to focus on seeking to be good governments and good regulators, in the form of mechanisms to stimulate the dynamics and generation of incentives for investment in telecommunications infrastructure.

Additionally, although the CFE has fiber optics does not mean that it is ready to provide telecommunications services, it is required to be "illuminated" and network elements that it does not yet have to transmit voice, data and video and the deployment of the 'last mile' to effectively reach a point of connectivity. This implies a complexity and technical and economic efforts to start operating.

Although there is a clearly social intention of this project, the consensus derived from the international historical experience is that the path of strategic collaboration of the government with private agents is the optimal one in infrastructure development projects to achieve the expected objectives. So to achieve its mission, the government could effectively undertake and rely on existing connectivity projects, namely: the Shared Public Network and the Backbone Network, both in collaboration with private actors.

We would hope that the government will not fall into that temptation. 

- Publicidad -

If it falls, unless it undertakes it on a design and articulation of optimal efforts to ensure compliance with its operation, with quality of service and efficiency in the use of technical and economic resources employed.

Text written by Ernesto Piedras of The Competitive Intelligence Unit, CIU.

Richard Santa, RAVT
Author: Richard Santa, RAVT
Editor
Periodista de la Universidad de Antioquia (2010), con experiencia en temas sobre tecnología y economía. Editor de las revistas TVyVideo+Radio y AVI Latinoamérica. Coordinador académico de TecnoTelevisión&Radio.

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