Mexico is migrating towards a universal telecom license

Mexico is migrating towards a universal telecom license

Photo credit: Wataniya Telecom Antenna by Shafiu Hussain

According to the Mexican Telecom Reform, by December 10, the Congress will enact a law to uniform the current telecom concessions and permits, which could be commercial, public, private and social use. Furthermore, those concessions could be used for rendering any type of service (universal telecom license or “UTL”).

Currently, there is a mosaic of telecom concession titles, according to the date of granting. During last decade, Ministry of Communications (SCT) used renewals of titles for standarizing them into a uniform and convergent title. This UTL was originally pointed out by the 2012 OECD “Review of Telecommunication Policy and Regulation in Mexico”, to remove entry barriers.

As we speak, the Congress is working on the provisions of the Telecom Law to land the concept of the UTL. I hope that some of these questions arise on the Congress, as they arise everyday to the people of the industry.

1. Severability. It is customary in Mexican telecom market that operators have concessions for commercial use and permits for non-profit use. As early telecom law regulated technology, not services, many long-time operators have diverse type of licenses with diverse obligations. This landscape forces the Congress providing for severability on events of default and partial revocation, specially for companies who own licenses associated to spectrum.

2. Cross-ownership. As IFETEL inherited antitrust authority for telecom matters, regulation on cross-ownership becomes relevant tool, and provisions for a License Registry will be crucial. “Groups of interest” might not seem relevant issue for telecom law, but for antitrust telecom will be essential. Will IFETEL implement cross-default on affiliates? It makes sense considering the operation of converging technologies and the blind spot of the authority while verifying on-net breaches to law. Under antitrust logics, one of the relevant markets is broadcasting was advertising. Would this market be inherited to IFETEL for analysing concentrations?

3. Private Use Licenses. It comes to my attention that the Reform mentions that IFETEL will uniform licenses for private use. Will private networks be forced to apply for a license to operate as such? Why? There is no public interest in them if they are not available to the general public. This is an issue that needs to be followed-up on.

While these issues are quite challenging for the Congress and exceptionally challenging for IFETEL to implement, the biggest issue on the Mexican Telecom Reform remains this: Would Telmex get a UTL that includes CATV and/or broadcasting TV?

Mexican Telecom Reform: The Rise of the STEM Lawyers

Mexican Telecom Reform: The Rise of the STEM Lawyers

Photo credit: Dell Tech Camp 2013 by Dell Inc.

The Reform started effects on June 12, 2013. As from this moment, several deadlines were triggered that will define the new telecom and antitrust landscapes:

  • Since June 12, 2013, foreign companies and individuals can invest in telecom companies up to 100%, and 49% in TV/Radio companies (the latter subject to country reciprocity to Mexicans in those sectors).
  • Since June 12, 2013, the only recourse against acts of New Telecom Regulator (IFETEL) and the New Antitrust Regulator (CFCE) will be Indirect “Amparo” (constitutional writ), repealing administrative recourses. This “Amparo” does not grant injunctions against regulators anymore.
  • By August 10, 2013, the Federal Judicial Council (administrative officers of Judicial Branch) will set the telecom and the antitrust courts with exclusive jurisdiction on those matters.
  • By September 1, 2013, the process for selecting IFETEL and CFCE Commissioners will be finished.
  • By December 31, 2015, migration to digital TV will be completed. Before that date, IFETEL would start a tender process for 1 or 2 national Digital TV networks.

Last Tuesday, the Calling for Aspirants to Commissioners of IFETEL and CFCE was issued with requirements for being eligible. If you read between the lines of the Reform and Calling, you may conclude that:

  • Regulators will be autonomous from Government and their decisions will have real impact on telecom and other markets, including power for functional and technical separation, ability to declare essential facilities and dominant players, and grant telecom licenses (IFETEL), among others.
  • Mexico is leaving administrative review tradition set by Telecom Law (1995) and Antitrust Law (1992) for the newly reformed “Amparo” proceeding.
  • The profile and eligibility requirements for Commissioners favors telecom and antitrust lawyers, but are inclusive with economists and engineers.
  • Secondary regulation will create a legal turmoil of interpretation and integration. Expect landmark cases and battles.
  • Legal analysis and litigation will be on the rise. This represents a great opportunity for the global legal market that has suffered from liberalization of the profession and the world crisis.

Now, the real question is: Would courts and lawyers be able to argument with STEM knowledge (science, technology, engineering and mathematics) and apply it to law? That is quite a challenge and yes, some will succeed.

Mexican Telecom Reform has passed … What´s next?

Mexican Telecom Reform has passed … What´s next?

Photo credit: Cut down to size by Adrian Nier

Last April 30, Mexican Congress finally approved the Constitutional Reform on telecom (and anti-trust). Now it is time for the 31 State Congresses to review and approve. If any 16 Congresses approve the Reform, it will become a finished Reform. State of Mexico was first. Jalisco and Querétaro are on their way.

Then, what is next? The secondary regulation, meaning discussing/approving amendments to Telecom Law, Radio and TV Law, CATV Regulations, Satellite Regulations, Regulations to Telecom Law and many other. As has been discussed in the fora, making a uniform Telecom legislative body comprising and putting together all segments of the market. Yes, this is because every telecom service is convergent and data-driven, and yes, law is for regulating these trends.

Some of my next posts will address the hottest topics on secondary regulation. I will write on topics that media or specialists have not discussed enough or at all.

Can´t wait? Want to suggest something? Let me know … #TelecomReformMX

Don´t Panic: The First-Mover Guide to the New Mexican Telecom Bill

Don´t Panic: The First-Mover Guide to the New Mexican Telecom Bill

Photo credit: Firefox Mobile by Johan Larsson

It happened Sunday just before midnight. Politicians from The Pact for Mexico, this is, an alliance made by major political parties for debating amendments to structural laws in Mexico, agreed on a Telecom Bill to be presented to the Mexican Congress.

Yesterday, at noon, The Pact for Mexico and the Federal Government made a press event to officially present the Telecom Bill to society.  This means that this Bill has already received pre-approval from majority of congressmen, and most likely will pass in essence.

As wrote in my Post: “How I Learned to Stop Worrying about Telecom and Love the Pact” the Telecom Bill was imminent with no way back. Increasing growth of telecom and IT services, would eventually make politicians to reach agreements to set things right in the telecom industry.

Certainly, this Bill will boost telecom business at mid and long-term, taking many industries with them. For first-movers, time is of the essence. Here are some highlights to understand the range of this Amendment:

1.There is a constitutional right to access broadband and access to information. Infomercials disguised as news are forbidden.

2. State will transform current COFETEL (telecom agency) and COFECO (antitrust agency) from subordinated government bodies to the Ministries of Communications and Economy, respectively, into two autonomous agencies with enough power to coordinate telecom industry and commercial markets (other than telecom).

3. Licenses and spectrum will be reorganised to allow converging telecom services. Meaning that companies may render converging services under one license, rather than having several permits, authorisations and concessions. New telecom agency will grant and revoke licenses, rather than the Ministry of Communications, as happened in the past.

3.Two new free-to-air networks will be placed under tender. Major players with 6 MHz are not invited.

4. Must-carry and must-offer obligations are included. Free-to-air TV has to offer broadcasted content and CATVs must carry those signals, both for free. There is an exception to “major” players, that would pay for them.

4. Foreign investment will be allowed at 100% in fixed and mobile services, and up to 49% in free-to-air TV and radio.

5. Local bundle for telecom, radio and TV networks of “major” players must be shared.

6. Government will grow its telecom network allowing private-public projects.

7. Bands of 700 MHz and 2.5 GHz will be reorganised, and a part used for wholesale.

It is important to notice that this Bill is to the Mexican constitution, and would require to have federal laws to detail all these aspects. However, the business expectations are great.

I can hardly find some time to discuss all aspects that come to my mind at this moment, of write “deep thoughts” of each topic. However, some topics come to my mind:

  • Mexican telecom operators, no matter size or network size, have just increased market value.
  • Content will be required to fill-in air time and CATVs.
  • Big data analytic will play a big role in the expansion of the services, as well as in the market defence.
  • The internet of things could have found broadband access, but also an emerging market that loves gadgets.
  •  Videocasting, internet-TV and VOD could explode during next years. Internet radio could find a niche too.
  • Advertising must find other lucrative niches other than infomercial news. Maybe migrate to the internet.
  • Telemedicine, electronic files and other e-health business will be pushed by this Bill.
  • Local governments will be more likely to implement e-government policies with better and cheaper internet access.
  • Digital products will find a bigger market.

Telecom Bill appears to have a “Do Business in Mexico” all over it, and will attract many players into the market share. Now, it is the time of Mexico embracing this historic transformation.

I will find some time to write on several topics of the Bill, and some other that are not covered by it. Meanwhile, so long, and thanks for all the first-movers …

How I Learned to Stop Worrying about Telecom and Love the Pact

How I Learned to Stop Worrying about Telecom and Love the Pact

Photo credit: Internet café by Jared Tarbell

This post is far from being a black humor political satire. In case you missed it, on December 3, 2012 members from 3 leading political parties signed the Pact for Mexico.

This Pact is a pre-agreement on backbone amendments to promote Mexico´s growing. In telecom, we find very interesting public policies that could boost that and other industries:

1. Anti-trust Agency (COFECO) will have authority for structural and functional separation of trusts.
2. Creation of special telecom and anti-trust courts.
3. Constitutional access to broadband.
4. New rules for challenging resolutions from Federal Telecom Agency (COFETEL) and COFECO.
5. COFETEL will be autonomous.
6. Comision Federal de Electricidad (CFE)´s Telecom Network will grow.
7. The Bands of 700 MHz and 2.5 GHz will be reorganized. 90 MHz of the 700 MHz Band will be used for wholesale.
8. There will be free internet acess in public spots and buildings.
9. Promotion of public and private investment in apps for telehealth, telemedicine and electronic patient records.
10. New policies for e-government, open government and open government data.
11. A bidding for new free-to-air TV will be launched with obligations of free must-carry and must-offer for CATVs.
12. Dominant firms of telephony and data will be subject to assimetric regulation for tariffs, combo offering and M&As.
13. Telecom Law will be updated and reorganized in one single estatute.
14. New policies for TV, radio, telephone and data will be implemented in parallel.
15. Most of these policies will be implemented as early as first quarter of 2013 and finishing implementation on 2015 or 2018.

The fact that all political parties pre-agree on amendments forsee a majority on the Congress and of course, a coordination with Peña Nieto´s Administration for implementing them. The new Administration also has shown pre-consent from Telmex and Televisa, biggest telecom and media companies in Mexico. No Supreme Court support has been shown yet, though.

Take it with a grain of salt, but there are some rumors about an amendment on current foreign investment limitations to fixed telephony and free-to-air TV to boost competition.

If you google telecom bills and policies, sure will find most of these items. The difference goes beyond the manifest majority of the Congress to promote competition in telecom, but the State declaring that will lead the telecom growing during next 6 years.

However, there are other pledges hidden for the untrained eye. Sales of Mexican telecom industry growing at a 15.1% pace and mobile broadband at 56.4% during third quarter of 2012, shows consumer is demanding the coming of big data.

In parallel, official information from Ministry of Economy shows that IT Industry has 32 clusters nationwide with 1340 companies. During last 10 years, the industry has grown 12.9% and the jobs 12% As such, there are 115,000 IT professionals graduated annually.

Have you stopped to think on the potential of this combo growing?

The Pact is in fact pushed and guaranteed by data consumer, who actually creates the IT and telecom jobs by paying for higher end services, but also by new era technologies that make hard for firms to keep market share without competing and innovating.

As Muhammad Ali once said “Impossible is temporary”. Today we are thinking on mobile broadband, while some are starting to foresee a hardware-less future based on the cloud with big data crossing across converging networks.

Mexico is paving the road for this. If you are smart enough you can grab a bit of business. If you are smarter, you will prepare yourself for a terabit. Just do not be foolished by technology, a business plan still will be required covering financial, tax, legal, IP, marketing and other traditional aspects of doing business. The Devil is in the details.

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