June 12, 2020 | 5:00 am
Senator Ricardo Monreal’s proposal to concentrate the Federal Telecommunications Institute, the Federal Competition Commission and the Energy Regulatory Commission in a single body, in addition to generating uncertainty, also represents a setback to the agreements reached in the field of telecommunications in the Mexico, United States and Canada treaty, the T-MEC.
The initiative of the Morena legislator not only “ruins” the achievements of each of the specialized autonomous bodies, but also violates some aspects of Chapter 18 of the trade agreement.
This chapter states that each of the parties must have a body responsible for the regulation of telecommunications, which breaks with the Monreal initiative.
This, given that the concentration of three different authorities in a single organism inhibits the ability of each specialized entity to operate and regulate independently by being part of a multidisciplinary Institute, a figure not covered in the chapter.
In the section of the agreement, this flexibility should be discussed in the changes that the member states take in order to be able to take decisions that modify the agreement.
said Sandra Rodríguez, a lawyer specialized in Telecommunications.
The specialist questioned that, given the proposal of a multidisciplinary body, there is no defined structure for the proposed Institute, nor the degree of specialization that the commissioners will have or the issues on which they have management.
Chapter 18 establishes two articles of its 27 that are essential and that take for granted the existence of the Federal Telecommunications Institute as an autonomous and independent regulator.
On the one hand, in reference to the creation of a Telecommunications Committee, which will be made up of government representatives from each party, which analysts would expect to be specialized in the matter.
Among the main functions of the Committee are:
Review and monitor the implementation and operation of this Chapter, with a view to ensuring the effective implementation of the Chapter by enabling the response capacity to technological and regulatory advances in the field of telecommunications to ensure the continued relevance of this Chapter to the Parties, service providers and end users.
Among the obligations of this chapter for each of the parties is the settlement of disputes, which in the case of appeals states that:
Companies may appeal to the Party’s telecommunications regulatory body to resolve disputes with a public telecommunications service provider related to the party’s measures related to different established matters related to obligations of telecommunications providers.
And the investments?
Although the T-MEC is a kind of greater safeguard for foreign investment, particularly from the United States and Canada, it could be affected by the proposal of the Morenoite legislator.
If something seeks to implement an international treaty in commercial matters, it is to give certainty; but if something is to be discarded, it generates uncertainty
commented Michel Hernández, specialist in the telecommunications sector.
As stated by the National Institute of Markets and Competition for Well-Being (Inmecob), which eliminates the requirement of the knowledge test, it weighs the scales on politicians on the technical, added the specialist.
For Hernández, the T-MEC is a tool that many investors can use in Mexico to combat this initiative.
In the country, private investment in the telecommunications sector has had “ups and downs”, although one of the years with the highest record of investment in infrastructure was in 2016:
To guarantee investment certainty, it is necessary to have mechanisms such as the autonomy of regulators. However, after seven years of reform, changes continue to be questioned, despite the fact that there is already a framework that could guarantee such autonomy, Hernández added.
Monreal’s initiative to create the Imecob foresees an annual saving of 600 million pesos, which in its calculations is equivalent to 22% of budget spending.
However, for the specialist lawyer, this saving does not include the costs that the country would drag in the absence of investments, harm to consumers and even a possible consolidation of a monopoly.
The obligations of the T-MEC
The T-MEC includes specific obligations for Mexico in relation to the maintenance of law and adequate institutions to prevent economic agents in its territory from carrying out anti-competitive practices, said Lucía Ojeda, a specialist in Economic Competition at CIDE.
Any sign implying that Mexico will relax the path towards effective competition policy application could constitute a threat to the commitments adopted by Mexico in the context of the T-MEC
Ojeda pointed out.
Although the initiative would not affect the formation of the Committee proposed in the T-MEC, in his opinion it could generate concern and doubt about the technical strength of the new regulator to comply with the commitments adopted.
The T-MEC comes into effect on July 1, while the discussion of the bill is scheduled to take place during the ordinary period, which begins on September 1.