Can you hear me now? Mexico proposes new telecom laws
The reform would open the Mexican telecommunications market to greater foreign investment.
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The top phone and television companies are “known for their excellent law firms,” says Alexander Elbittar, economist and telecommunications expert at CIDE, a public university in Mexico City. “They’re dedicated to protecting themselves with the amparo,” a legal shelter or injunction.Skip to next paragraph
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The reform sets up a new regulatory agency that would ostensibly have sharper teeth, including the ability to levy sanctions, impose additional regulations on dominant players, and limit market concentration nationally and regionally. New specialized courts would be led by judges with expertise in competition and telecommunications law.
“If you are going to create the potential for liberalized industry, you have to have somebody to enforce the provisions,” says Eric Farnsworth, vice president Council of Americas in Washington DC. “The regulator has to be impartial and insulated from political pressures to the extent possible.”
Mexicans may not immediately see more options in areas like landline phone service, where growth is slow and potential competitors may still be wary to take on Telmex, Mr. Farnsworth says. But the reform may well open the door to “new services that we take for granted in the US – broadband, clearly,” Fransworth says.
'Bring on the competition'
In Mexico, where the digital divide is especially wide; better, cheaper access to broadband Internet could be one important benefit to consumers. The reform would even declare broadband access as a basic constitutional right. Many Mexicans would also welcome additional competition in phone service; although prices have come down somewhat in recent years, because companies offer benefits for "in-network" calling, Telcel's wide grip on the market makes it difficult, and expensive, to switch to competitors.
América Móvil told Bloomberg in a statement that it supports the sector’s opening up to foreign investment. (Mexican law currently only allows 49 percent ownership by a foreign company of phone or cable assets.)
“We compete in 18 countries where we benefit from this type of policy of openness to investment, and we’ve always supported such openness,” an América Móvil spokesperson said by email.
Televisa’s Mr. Azcarraga appeared similarly open minded. The billionaire tweeted, “The #ReformaTelecomunicaciones has been presented. Time for big challenges and also opportunities. Bring on the competition.”
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