Home Latin America I 1997 The Federal Telecommunications Commission,A New Regulatory Agency

The Federal Telecommunications Commission,A New Regulatory Agency

by david.nunes
Carlos CasasusIssue:Latin America I 1997
Article no.:4
Topic:The Federal Telecommunications Commission,A New Regulatory Agency
Author:Carlos Casasus
Organisation:Federal Telecommunications Commission, Mexico
PDF size:32KB

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Article abstract

Mexico has been at the forefront of the liberalisation process. The Commission marks another step towards creating a transparent regulatory framework necessary to participate in the international market. In the words of the Commission, “Mexico has positioned itself at the top of the world’s rhythm of liberalisation”.

Full Article

In the past six years, the Mexican Telecommunication sector has undergone structural changes that are reflected in, and were the main driving force that gave birth to, the new Federal Telecommunications Law published in June 1995. The purpose of this new law was to establish a transparent regulatory framework that would permit a non-discretionary process for licensing, and the promotion nation-wide of different services at competitive prices. For these reasons the Federal Telecommunications Commission was created as an independent (technically and economically) regulatory agency whose main objectives are: Ÿ create and administrate fundamental technical plans; Ÿ advise on the granting of new licenses and concessions, and supervise the performance of the concessionaires; Ÿ auction and administrate spectrum frequencies; Ÿ promote and supervise the efficient interconnection of new entrants to the incumbents local network; and Ÿ register tariffs for different telecommunications services. This new agency is divided into three general areas: Legal, Engineering and Technology, and Economic Analysis. The heads of these divisions, together with the president, form the Pleno, which is a four-member decision body. This kind of organisation allows more transparency and plurality in the policy making process. Two additional areas, International Affairs and Telecommunication Services and Verification, who report directly to the Presidency, constitute the trust of the Commission’s body. Since it’s creation, the Federal Telecommunications Commission has published several guidelines in order to create a regulatory framework that would guarantee full competition in the sector. Regarding telephone services, the numbering, signalling and pre-subscription plans published during 1996, were issued to create the necessary technical support for competition. These new rules will facilitate the interconnection of new entrants to the Telmex local network. Additionally, the rules for providing long distance service published in June 1996, included two ways to access the long distance carriers in a competitive market, the pre-subscription and dialling modalities. Furthermore, these rules set a date for the opening of the competition process. While private line services were opened to competition in August 1996, interconnection to the Telmex network began, as laid down in the Long Distance Rules, on January 1 1997, in Queretaro City. The rest of the cities in the country will be periodically opened to competition. So far, 22 cities have been opened to competition, which means that 38 cities will be opened in the coming months, in order to complete the introduction of a competitive long distance service in 60 cities by the end of 1997. At the present time, there are 10 competitors in the long distance market, a market that is expected to grow significantly over the next several years. Some estimates suggest the value of domestic and long-distance services will double by the year 2000. Another important area covered by the new Telecommunications law, and therefore supervised by the Federal Telecommunications Commission, is the Satellite Communications Services. The Mexican satellite system will be opened to private investment by the end of this year. Licenses for orbital slots will be granted through public auctions that will be held by this regulatory agency. With regard to the Wireless Telecommunications Networks, the new law establishes a competitive bidding process for the allocation of radio frequencies for Satellite services. This procedure started in July 1996, when the Commission held a simultaneous ascending auction for nine national and 27 regional paging frequencies. The auction ended on October 31 1996 with concessions granted to 15 corporations. Today the highest policy priority is to begin the Local Wireless Access Service allowing competition to expand telephone penetration: there are hardly 10 telephones per 100 inhabitants. Therefore, the Commission is presently defining the local wireless service band plan. Personal Communication System auctions are also planned for the third quarter of 1997. Foreign investors will be able to participate in the Mexican spectrum auctions in partnership with Mexican companies investing, but as laid down in the law, no more than 49% of foreign direct capital is to be invested. Together with the Ministry of Communications and Transport, the Commission has been actively representing Mexico in several international telecommunications forums. In February of this year, Mexico successfully negotiated basic telecommunication services at the WTO in Geneva. During the first week of March, Mexico hosted the 15th APEC Working Group on Telecommunications (TEL) meeting, which contributed to further liberalisation of the telecommunications market in the Asia Pacific Region. Other important organisations of which Mexico is an active ‘member, such as NAFTA, ITU, CITEL and OCDE, are the main forums for the exchange of experiences and co-operation that will contribute to the successful development and liberalisation of our telecommunication infrastructure and services. With this global perspective, the modernisation of the Mexican sector is on its way. The Commission will be continually working with the industry to create the transparent regulatory framework necessary to participate in the international market. Conclusion Mexico has positioned itself at the top of the world’s rhythm of liberalisation. Its continuous work to move towards a complete opening of the telecommunications sector will lead to direct benefits for the end user.

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