Latin America. A repeated concern in the development of the Information and Communication Technology (ICT) industry, especially in telecommunications, lies in the fact that the design and effective application of the regulatory framework is aligned with technological evolution and market conditions.
According to the latest report by The Competitive Intelligence Unit, regulatory implementation has often been far overtaken by market developments, causing barriers to adoption, investment, competitiveness and impeding the consequent benefits of market development.
Consistently, in the most recent episode of regulatory analysis of the Mexican audiovisual content market, we find a situation in which it is not only simulated to ignore and omit the prevailing market trends, but it is intended to regulate from anachronistic diagnoses.
This refers to the recent resolution on substantial market power in pay television in which its presence was determined in the period from January 2009 to August 2014. It is worth emphasizing the importance of devoting special attention to this temporality. It is from this that the initiation of a procedure was ordered to impose specific obligations on the economic operator with substantial power.
The question here is very simple, why does the regulator intend to define supposed measures from the inspection to technological conditions and competitive configuration of almost a triennium ago?
This context would be equivalent to analyzing the Smartphone market in the aforementioned period, finding that BlackBerry held a majority market share without facing a relevant competitive pressure from any other equipment manufacturer and from this establish today that it is necessary to establish regulatory mechanisms to balance the market towards its competitors. When in the fourth quarter of 2016, BlackBerry practically lost all market presence among smartphone providers in Mexico, having a holding between mobile lines of only 0.5%.
This shows the intrinsic dynamics of telecommunications, whereby in a period of time as short as three years technological development and market configuration can turn out to be completely different.
Clearly, common sense would point to the realization of a timely diagnosis with recent information on the new market conditions.
But this was not what the regulator resolved, but announced that it will proceed to the imposition of regulatory measures based on information and conditions already expired.
This situation is more incongruous, since the body itself generates and disseminates timely indicators of the performance of the pay-TV segment, in which a progressive development of competition and increasingly better offers in this market are identified.
All of the above will lead to another chapter of regulatory mismatch or lag, in which the design and implementation of measures for competition will not be congruent with technological and market circumstances. It can even trigger a setback in the generation of effective competition, in the deployment of infrastructure, and consequently, prevent the efficient development of this market.
Text written by Ernesto Piedras of The Competitive Intelligence Unit.
