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Telecom Law: The Battle between Society, the Government and the Monopolies

Raúl Trejo Delarbre. * Mexico, May 2014

Versión en español | Versão em Português

In the spring of 2013, the Mexican government expressed its support for the constitutional reform that established one of the most advanced pieces of legislation in Latin America in the area of broadcasting and telecommunications regulation.

One year later, the same administration proposed a regulatory law that stands in opposition to several key elements of the reform.

Since June 2013, the Mexican Constitution has included a provision establishing a regulatory body with extensive powers over rules pertaining to strong companies like Telmex and Televisa, which carry the majority of the telephone and television markets, respectively. The legislation also includes regulations designed to promote competition in these sectors. Guarantees for the development of public and community media were created, and support for independent audiovisual production was announced. In addition, the government indicated that there would be an organized effort to create a national broadband network that would include non-commercial criteria.

In order to carry out these mandates, which were written into the Constitution, particularly Articles 6 and 28, there is need for a regulatory law. However, the draft Federal Law on Telecommunications and Broadcasting submitted to Congress by President Enrique Peña Nieto at the end of March contradicts the main contents of the constitutional reform.

The new Federal Telecommunications Institute (IFT) loses some of its powers in areas such as radio content regulation. Rules put in place to determine dominance in the telecommunications market are strict, but they end up being very lax with regards to radio broadcasting. (While the Constitution defines as “Preponderant Economic Agents” those that carry more than half of the users, subscribers, audience, or traffic over networks, the President’s proposal states that preponderance would be measured only on the basis of audience in radio and television).

By contrast, the measures that are to be used to determine the telephone monopoly are so strict that a zero rate for interconnection costs is set for smaller companies when using the dominant consortium’s infrastructure. Thus, telephone networks that compete with Carlos Slim’s enterprises will not pay a penny to send their calls and messages through the magnate’s wireless networks.

Under Peña Nieto’s initiative, the new public broadcasting body created by the 2013 reform is attached to the government. This goes against the autonomous nature of that agency that is set out in the Constitution. Community and indigenous media are prohibited from selling advertising space and are subjected to tortuous and expensive administrative procedures. The measures fail to favor independent production and do not provide funding for quality television and radio programming.

Instead of decisions that help Internet service to grow through the establishment of lower prices, higher speeds, and increased capacities, the government suggested that the country adopt rules that would allow for the censorship of online contents as well as access to telephone network databases to locate people and tap phone calls and other communications without a court order.

In other words, the meaningful progress achieved through the 2013 constitutional reform would be blocked by the 2014 secondary legislation reform. Last year’s decision to deal with communication consortia through strict regulations that could produce new competitors is adequate in regard to the rules on telephone services but insufficient in the area of television regulation, especially with regards to Televisa.

What happened in less than nine months to change the Mexican government’s perspective on regulatory issues to this degree? One of the reasons was the break-up of the Pact for Mexico, a coalition formed by the government and the three national parties that allowed for the development of this and other reforms.

During a period lasting just under one year, this alliance significantly changed the rules for the assessment of basic education, the organization of elections, and telecommunications and media. But the Pact stopped working when the Democratic Revolutionary Party (PRD) left over a disagreement regarding the constitutional reforms that allow for intervention in the oil and electricity sectors. The PRD, which is a left-wing party, was the most active promoter of the telecommunications constitutional reform.

Without the counterbalance offered by the PRD and at times by the National Action Party (PAN) at the negotiating table, the regulatory law on telecommunications and broadcasting was written by the government with a greater focus on Televisa’s interests rather than constitutional guidelines. The Senate received this bill during the last week of March. One month later, the President of the Communications Commission, Senator Javier Lozano (PAN), submitted a controversial draft report supporting President Peña Nieto’s initiative with only a few changes.

Concern over possible Internet censorship spread in sociodigital networks. There was a certain degree of exaggeration in this response because the Presidential initiative would not result in an immediate censorship of the network, though it was designed to allow for government intervention.

Street protests came in addition to an online campaign refuting the presidential proposal because it benefitted Televisa. Widespread criticism of Peña Nieto’s project was on the verge of creating a dilemma between the battle for media and telecommunications diversity and openness and the defense of corporate interests.

The rejection of the government’s initiative reflected societal discontent over the communications and political influence achieved by Televisa. But even though the protestors did not want to work in favor of Telmex’s interests, they did because the draft law and other regulations affect the consortium’s business, especially the zero interconnection rates.

This convergence of interests, which were unwanted by the majority of the citizens who questioned the presidential proposal, was clear on the morning of April 26, when the groups that opposed the initiative organized a “human chain” stretching from the President’s residence to Televisa’s offices. The chain included hundreds of Telmex workers in full dress uniform who expressed concern that the government’s initiative would affect Carlos Slim’s business, thus decreasing their benefits.

These protests and the telephone monopoly’s disagreement led the Senate to postpone the approval of the Telecommunications Law until June. The regulatory law that is passed should reflect the contents of the Constitution, set limits on monopolies, and reclaim public and social media… although Televisa and Telmex may not like it.

* Researcher at the Institute for Social Research, Universidad Nacional Autónoma de México (UNAM).

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