On August 2, 2019, the “Resolution that creates CFE Telecommunications and Internet for Everyone” (Acuerdo por el que se crea CFE Telecomunicaciones e Internet para Todos) was published in the Official Gazette of the Federation. This new entity is a governmental entity of the Federal Electricity Commission (“CFE”) and will have legal autonomy and resources of its own.

The resolution that creates this new public entity is basically structured into two main parts: first, the authority that CFE Telecommunications and Internet for Everyone (“CFE Telecommunications”) will have, and second, the way in which such entity will be managed and organized. The main points regarding the creation of this new public entity are the following:

  1. The purpose of CFE Telecommunications will be to provide and develop non-for profit telecommunications services in order for the Mexican government to guarantee the human right of access to information technologies, including broadband and Internet services.
  2. The main duties regarding the operation of this new public entity will be to (i) develop a public non-for profit telecommunications network, with effective access for all the population of the country that  does not yet have access to such services; (ii) promote social and economic development through the provision of non-for profit telecommunications services; (iii) manage and obtain from the federal, state, municipal or from the Mexico City authorities any concession title, permit or authorization for the fulfillment of its purposes; (iv) maximize, in a coordinated and centralized manner, the infrastructure applicable to the telecommunications services, using the capabilities of the National Optical Fiber Network and the active and passive infrastructure owned by the CFE; and (v) carry out telecommunications activities as well as the necessary operations for the fulfillment of its purposes or those directly or indirectly related to such purposes.
  3. CFE Telecommunications will be managed by a Board of Directors that will be integrated by 7 members, six advisors from the Federal Government and one independent advisor; as well as one General Manager.
  4. The main responsibilities of the Board of Directors will be (a) to establish the guidelines for the operation of CFE Telecommunications; (b) to line up their activities to those carried out by CFE; (c) to track and test the operations of CFE Telecommunications; and (d) to conduct its operations based on the best corporate governance practices. The Board of Directors will ordinarily meet, preferably on a quarterly basis.
  5. The General Manager shall be appointed by the Chairman of the Board of Directors and removed by him or her by proposal of the Board of Directors. The General Manager will be appointed based on his/her experience, skills, and reputation and will have the attribution of the management, operation, direction and execution of CFE Telecommunications. 

The transitory clause of the resolution that creates CFE Telecommunications establishes that CFE Telecommunications will have until October 15, 2019 to formally install its Board of Directors as well as to appoint its General Manager. Until the Board of Directors is installed, the Director of CFE will be the representative of CFE Telecommunications and who will have the duty of performing any activities; including the filing of the applications before the Federal Telecommunications Institute for the concession title required in order to provide telecommunications services.