Telecom Law: All control over the government?

In telecommunications, Mexico is moving from a model of competitive markets to one where the federal government seeks to be the operator, regulator, and authority all at the same time.

If the Initiative, including the draft decree issuing the Telecommunications and Broadcasting Law, is approved, it will discourage future investment, may violate international treaties to which Mexico is a party, and would leave the industry with less protection than even black market companies.

This bill clearly lacks ordinary means of defense for the industry, which would only have indirect protection, without suspension, against violations of acts of authority and sanctions indexed to the operators' annual gross income.

The aggravating factor is that everything would be subject to the decision of a single person, the one who heads the Digital Transformation and Telecommunications Agency (ATDT), which would open up space for discretionary power depending on political circumstances.

The ATDT would be the sole federal authority for infrastructure deployment, and this would create legal uncertainty for concessionaires regarding contributions and compensation.

This is, in general terms, the diagnosis made by the National Chamber of the Electronics and Information Technology Industry (Canieti) after reviewing the proposed law, which is still under discussion.

The organization maintains that far from correcting the excesses contained in the legislation still in force, it increases them.

Lists the main points of concern for the telecommunications industry:

It contemplates an institutional arrangement based on a single person who reports directly to the Federal Executive.

It provides for the granting of commercial concessions to the Federal Executive to compete directly in the retail market and proposes that the government provide services to end users for commercial purposes, either directly or through a public-private partnership.

It also establishes the direct allocation of radio spectrum concessions for commercial use to executive agencies and entities, without compensation.

It eliminates the definition of competitive neutrality, which implies an exclusionary regime for the State when it operates as a commercial concessionaire.

It also grants the ATDT very broad regulatory and de facto legislative powers, which could affect the autonomy of the competition authority.

It empowers the ATDT to grant authorizations for the use of radio spectrum without public bidding, through authorizations for intelligent radiocommunication networks and for commercial and industrial areas.

These, among many other provisions of the bill, are of concern to Canieti, who urges the parties to work together to create legislation that benefits both the industry and users.

The truth is that the bill contains many elements that denote a setback in the Mexican telecommunications market, which has enjoyed significant growth, precisely due to competition. At the same time.

Pemex, the shadow of suspicion

The bad news is that suspicions of corruption at Pemex led the Norwegian investment fund Norway Wealth Fund to sell all its fixed-income investments in the Mexican company.

The fund's ethics committee maintains that its investigations reveal that Pemex could be linked to multiple accusations or suspicions of corruption during the period 2004-2023. It is the world's largest sovereign wealth fund.

What effect will this have on the oil company's debt profile? What will be the reaction of other Pemex debt holders? Added to Pemex's delicate financial condition is corruption, regardless of how long it has existed. The consequences are being felt now. It is doubly worrying because Pemex's fate is now directly tied to that of the Mexican government, due to the absolute financial support it provides. Time and again.