Mexico. The members of the Institute of Telecommunications Law, IDET, learned in greater detail about various aspects derived from the "Study of the Impact of Granting Tariff Freedom to the Preponderant Economic Agent in Telecommunications.
The study was conducted by Dr. Andrés Aradillas-López, Master in Economics from El Colegio de México, as well as Master in Statistics and Doctor of Economics from the University of California at Berkeley, who is currently Professor and researcher in Economics Pennsylvania State University.
In this study, formally submitted for consideration by the Federal Institute of Telecommunications (IFT) in the recent public consultation process on the criteria and thresholds of the parameters to allow tariff freedom to the Preponderant Economic Agent in Telecommunications (AEPT) in indirect access services to the loop (SAIB) in 63 municipalities, Dr. Aradillas-López carries out a solid analysis on the negative effects that the lightening of asymmetric measures would have on the telecommunications sector.
Before members of the IDET, he explained the methodology used in the preparation of the aforementioned study, which shows that there is evidence that an increase -even if it is modest- in the market share of the AEPT in some of the municipalities identified by the IFT, could generate an increase several times greater in the aggregate market share of said operator. Likewise, the alleged tariff freedom would also have negative effects on other telecommunications segments that do not directly involve the wholesale service that the IFT intends to deregulate.
The IDET members who participated in the meeting agreed that there are negative effects that would not have been identified by the IFT in its preliminary analysis, so it is necessary that they be evaluated as fully as possible by the regulatory body, in view of the decision to be taken in the coming dates regarding the aforementioned measure.
This is essential because to date there is no formal evidence, generated by the IFT, that proves that the specific obligations that have been imposed on the AEPT have not only been fully complied with in a timely manner, but have allowed to consolidate in a generalized way conditions of effective competition in the telecommunications sector of Mexico.
In this context, it is of central importance to remember that in the analysis of the regulation of markets that have characteristics that prevent effective competition from prevailing on its own, it has been identified that starting to dismantle the regulatory scaffolding or deregulate when this should not happen, is a widely studied error that, among other issues, it generates costs to the competition that can be irreversible.
Finally, for IDET it is clear that any type of deregulation of the AEPT in a sector that remains highly concentrated, will imply setbacks to the telecommunications reform, to the detriment of end users.
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