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Martin Cave, Alexander Elbittar, Ernesto Flores-Roux, Elisa Mariscal, Feb 26, 2014
The new telecommunications regulator in Mexico, Instituto Federal de Telecomunicaciones, recently issued a public consultation on its draft regulation for must carry and must offer conditions in the broadcasting sector. This, together with the recent Constitutional reforms on Telecommunications and Broadcasting, represents an unprecedented opportunity to instill the sector with much needed competition.
For instance, in broadcasting, free-to-air TV is dominated by two main operators, Televisa and TV Azteca, each holding approximately 65 and 25 percent audience share, respectively. Both enjoy also a high level of concentration in infrastructure, audience, and publicity. Something similar occurs in telecommunications, where there is a high level of concentration: Telmex, the incumbent fixed-line operator, has close to 80 percent share of the fixed-line market, and Telcel, the incumbent’s mobile affiliate, accounts for almost 70 percent of mobile subscribers.
The new regulatory effort in Mexico’s telecom sector also allows for a comparison of the current state of regulation relative to other economies. We take the cases of Argentina, Australia, Brazil, Canada, Chile, the European Union (Ireland and the United Kingdom), India, Peru, and the United States, as illustrative of the different factors that lead to the decision to design and apply MCMO regulation.
This article proceeds as follows. We begin with a brief review of the need to regulate the telecom and broadcasting sector and discuss the circumstances that lead to regulation. Next, we summarize the main issues that the IFT is seeking to clarify, based on the Constitutional amendment of last June 2013, through secondary regulation and its likely effects in the sector. Among those effects is a requirement to protect the audience’s right to programming content, while preserving and promoting competition in various broadcasting outlets. Although not specifically stated, these rights also include the rights of advertisers to have access to local audiences and the need to continue copyright protection.
Next, we review similar regulation in different economies and derive common elements and mechanisms used by different agencies to pursue regulatory objectives in broadcasting. We conclude with an attempt at deriving best practices in the application and enforcement of MCMO regulation worldwide that may be useful to consider in Mexico.
