Mexico. The plenary session of the Federal Institute of Telecommunications, IFT, approved submitting to Public Consultation the criteria and thresholds of the parameters to determine the tariff freedom of the Preponderant Economic Agent in Telecommunications (AEP-T) in certain geographical areas of the country. This amendment would allow the AEP-T to freely determine the rates for the indirect access service to the local loop.
The Federal Law on Telecommunications and Broadcasting (LFTyR) stipulates and defines in its Article 262: "... the predominant economic operator, by reason of its national participation in the provision of broadcasting or telecommunications services, shall be considered to be anyone who has, directly or indirectly, a national share greater than fifty per cent, measured by the number of users, subscribers, audience, traffic on its networks or the capacity used thereof."
It is worth analyzing the previous paragraph precisely, since it seems that even the IFT itself does not understand the legal figure. In the first place, the law speaks of national participation, it never speaks of a possible fragmentation of this figure according to geographical areas.
Secondly, it speaks of a direct or indirect participation, in that sense Telmex and Telcel are closely related, despite the functional separation. In other words, as long as there is no structural separation of Telmex and Telcel, the preponderance of one necessarily implies the preponderance of the other, since both companies are mutually and closely related.
The AEP-T continues to account for 56.6% of the revenues of the entire telecommunications sector nationwide during 2020; 54.4% of fixed lines; 61.7% of mobile lines and 44.8% of fixed broadband accesses. It is inexplicable that, given the ineffectiveness of asymmetric measures, the IFT dares to propose going in a direction totally contrary to ensuring economic competition in the telecommunications markets for the benefit of Mexicans.
Therefore, the mere fact of proposing this Public Consultation goes against the direction of the LFTyR; it is even alarming because it seems to be an agenda driven in favor of certain private interests. This agenda is so clear that even managers of the company that would benefit and "analysts" related to the AEP-T already celebrate the decision they know the IFT will take after the consultation.
That the SAME IFT and "analysts" believe that this regulation is necessary and efficient only because of the existence of more competition or greater penetration of broadband services in certain municipalities of the country is to have no notion about how the telecommunications markets work and to carry out simplistic and uninformed analyses about the sector.
Additionally, the IFT lays the groundwork for a possible violation of the Constitution and the LFTyR does not pay in the public discussion of the potential absorption of its functions by any secretariat of the Federal Executive.
Text written by Gonzalo Rojon of The Competitive Intelligence Unit, CIU.
