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Telecommunications Reform in Mexico: Competition, Neutrality and Protest
This summer the Mexican government will put the final touches to the long process of overhauling its legal framework for telecommunications, which is widely acknowledged as the most significant reform the sector has seen in almost two decades.
That the Mexican telecommunications sector is in need of a shakeup is undeniable. In every segment there is currently one vast company dominating the landscape, the best-known example being Carlos Slim’s behemoth America Movil, which has an eye-watering 70% share of the country’s mobile phone networks and 80% of fixed line telephony. It is no coincidence that customers in Mexico pay higher tariffs for these services than in any other OECD member country, nor that Carlos Slim is the world’s second richest man.
The reform, passed just over a year ago, has the potential to bring major benefits for Mexico, from big business down to the individual customer, though this potential will only start to be felt when the bylaws have been passed. There is, however, currently a major question mark over just how soon that can happen, given that the bill was only presented in Congress in March and was subsequently rejected in April, following disagreement between the main parties.
The disagreement was over some of the content of the bill, something that is also worrying much of the public and led to large-scale protests in Mexico City in April. One complaint is that, while the reform serves a major blow to Slim’s empire, it still favours big telecommunications companies and does not serve to open up the market sufficiently. Another, still more serious complaint is that the current bill introduces provisions that the opposition says were not agreed on in the initial reform package and which threaten citizens’ access to information and freedom of expression. Particularly controversial is the proposal that the authorities be given several additional powers: to switch off mobile networks when public security is deemed to be at stake; to track users’ geolocation in real time; and to authorize the blocking of internet content. Critics say that all this calls into question the concept of internet neutrality.
To many Mexicans the idea of President Enrique Peña Nieto’s administration being able to switch off networks at ‘critical times’ in the name of public or national security is particularly alarming. On the day of the President’s inauguration in December 2012, hundreds of Mexicans, predominantly under the banner of the youth movement #YoSoy132, took to the streets to protest over the return to power of a party (the Institutional Revolutionary Party – PRI) that until 2000 had enjoyed 71 years of uninterrupted rule characterized by nepotism, corruption and an overall disregard for democratic values. While the protests involved some clashes with police, my first-hand experience was of a peaceful protest, despite an over-the-top riot police presence that prevented many people from reaching the main protest assembly points.
Mexico’s Human Rights Commission reported the arbitrary detention of at least 22 people by the police that day, but many of the participants say that far more people were arrested and that some remain imprisoned until today. Events that day call into question the extent of real democracy in Mexico: the media persisted in portraying the protesters as a trouble-making minority, rather than the general public – and quite a large section of the public — using democratic channels to express its views; and the government’s harsh response has left deep scars, with many Mexicans now believing that protest is, at best, futile and, at worst, dangerous.
This makes the recent protests all the more poignant. On 26 April, civil society organizations, journalists and citizens organized a human chain to stretch five kilometres from the headquarters of Televisa, one of Mexico’s biggest television networks, to Los Pinos, the President’s official residence. Although the area around Los Pinos was cordoned off, the protest otherwise went ahead as planned. And it bore fruit: on the very day that it took place, the PRI announced a postponement until June of negotiations on the bylaws, aware that, given the number of objections, it could not pass the bill in its present form and would have to negotiate further changes. The main opposition, formed of the leftist Party of the Democratic Revolution (PRD) as well as parts of the centre-right National Action Party (PAN) stated that they could not approve the bill unamended, but the protests also were undoubtedly a factor in the government’s decision.
The shape of the final reform and its overall impact on Mexico will depend heavily on the extent to which the bill is amended by the government and how the subsequent round of discussions on the bylaws progresses in June. With the OECD estimating that the shortcomings of Mexico’s telecommunications sector cost the economy 2% of its GDP annually, the Peña Nieto administration’s desire to resolve the current impasse without making significant changes is likely to meet resistance if the PRD in particular stands its ground. This may give the political left greater bargaining power in negotiating a bill that brings greater benefits for the Mexican public, as well as for the economy.
* Lucy Fisher is a free-lance researcher and editor based in Mexico City