A PYMNTS Company

Concerns Mount as Mexico Moves Forward with Telecom Regulator Overhaul

By  |  December 1, 2024
Entersekt to Authenticate Plata’s Mexico Credit Card Offering

Mexico’s recent constitutional reform, which has eliminated the Federal Telecommunications Institute (IFT) and other key regulatory agencies, has sparked concerns about its potential to disrupt the country’s regulatory framework. According to the IFT, the reform could create uncertainty and hinder the effective application of regulations in critical sectors such as telecommunications and competition law.

    Get the Full Story

    Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.

    Subscribe to our daily newsletter, PYMNTS Today.

    By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions.

    The bill, which was passed by the Senate on Thursday with 86 votes in favor and 42 against, had already cleared the lower house of Congress. It now awaits approval from Mexico’s state legislatures. The reform, originally proposed by former President Andrés Manuel López Obrador, removes the IFT, along with six other regulatory bodies, including the energy (CRE) and hydrocarbons (CNH) regulators.

    We’d love to be your preferred source for news.

    Please add us to your preferred sources list so our news, data and interviews show up in your feed. Thanks!

    Add as Preferred Source

    In a statement, the IFT expressed its concerns, stating that the reform contradicts the proven benefits of institutional autonomy in regulating these vital sectors. “The evidence shows that the best institutional design for regulating these important sectors is constitutional autonomy,” the IFT remarked. It further argued that a single, convergent regulatory body overseeing both sectoral regulation and economic competition has enabled effective oversight and spurred significant transformation in Mexico’s telecommunications and broadcasting industries.

    The reform has also faced opposition from other groups, such as the Mexican Association for the Right to Information (Amedi). Amedi criticized the dissolution of the IFT, warning that the transfer of its responsibilities to the federal executive could undermine regulatory effectiveness. “The extinction of this body implies that its powers will be assumed by the federal executive through the agency in charge of telecommunications and broadcasting policies,” the association said earlier this month, pointing to the limited effectiveness of such agencies in past administrations.

    The IFT has raised alarms about the secondary legislation that will follow the constitutional reform. It stresses the importance of maintaining technical impartiality and budgetary independence, which it says are critical for effective decision-making and competition policy enforcement. The Institute also cautioned against fragmenting regulatory responsibilities, noting that this could lead to inefficiencies and inconsistent application of policies across the sector.

    The government has suggested that the IFT’s functions might be transferred to the Ministry of Infrastructure, Communications, and Transport, although there is also a possibility of creating a new decentralized agency under the Ministry of the Economy. The final structure will depend on the details outlined in secondary legislation.

    Critics also highlight a potential conflict with international trade obligations, specifically Mexico’s commitments under the US-Mexico-Canada Agreement (USMCA). The agreement requires an independent regulator for the telecommunications and broadcasting sectors, which may clash with the proposed changes.

    Source: BN Americas