Mexico. During the last administration, it was provided in the Mexican Constitution to create a Backbone Network that would enable internet access in disconnected areas and communities through the efficient and full use of fiber optic wires owned by the Federal Electricity Commission (CFE). The Backbone Network would operate in collaboration with private agents, based on the formation of a Public-Private Partnership (PPP) with a self-financing modality for its developer.
For this purpose, a concession was granted to install, operate and operate a public telecommunications network to Telecomunicaciones de México (Telecomm) and a transfer of infrastructure resources was made.
However, several years have passed since this fact and we still do not enjoy the coverage, quality, addition of capital, efficiency, competition and other benefits that this project would have promised.
The next steps of the project took place in the first half of 2017, the same year in which it was projected to have the prebases for its tender towards its closure, to start this process in January 2018 and have a ruling in June of that year. However, it was not until April 2018 when the prebases were published, to have a definitive version of these in June 2018.
In these, October of last year was defined as the deadline for the presentation of proposals for subsequent ruling and award in November. But the outgoing administration decided to postpone the filing date to February 1, 2019. During this period, uncertainty regarding politics and economic development generated a climate of mistrust and indecision among potential bidders. The new administration decided to suspend the bidding process to start from scratch.
In January 2019, the bidding rules were modified, establishing that the receipt of proposals would have a deadline of April 22 of this year, with the exception that the winning company would have the obligation to give free internet in public spaces, a condition that would put at risk the profitability of the project.
Given the new panorama, conditions and postponements, there were no expressions of interest in the tender, so the government of Mexico decided to postpone, again, the bidding process for August 22 of this year, to have a ruling on September 6.
President López Obrador has said that if the tenders fail, the State will provide the necessary connectivity to achieve its mission. In this regard, last Tuesday the president held a video call with the creator and CEO of Facebook, Mark Zuckerberg, in which the lack of connectivity in some regions and communities of the country was addressed, so he would seek to form a partnership with the technology company to provide internet and mobile phone coverage to the entire country.
The Mexican government and institutions have failed to undertake the Backbone Network project, which together with the Shared Network and "Internet for All" seek to be a catalyst in economic growth and development, based on universal access to the Internet. The lack of a clear guideline, certainty in the process and a government that is increasingly opposed to projects of this magnitude, have made the Backbone Network what it is today: a frustrated project.
The consensus derived from international historical experience is that the government's strategic collaboration with private agents is optimal in infrastructure development projects to achieve the expected objectives. Never has a developed society had a government acting as an active operating agent.
Let us hope that this well-intentioned project will resume a design and execution in which the role of the State is that of an entity of collaboration and supervision of the operation. The shortcomings and uncertainty of the bidding process are also remedied.
Text written by Ernesto Piedras of The Competitive Intelligence Unit.
