On June 11, 2013 the Federal Official Gazette published the Executive Order Amending Articles 6, 7, 27, 28, 73, 78, 94, and 105 of the Mexican Federal Constitution in the Area of Telecommunications (the “Order”).

The Order amends various constitutional provisions with the intention of strengthening freedom of expression, access to telecommunications, and effective competition, as well as improving infrastructure and the efficient use of telecommunications for the benefit of consumers.

The Order establishes, among other things, the following:

Freedom of Expression and of the Press:

  • The only limits are public morality, privacy, third party rights, the commission of crimes, and causing a disturbance.
  • The state will guarantee access to information and communication technologies, as well as to broadband and Internet.
  • Telecommunications services must be provided under conditions of free competition, quality, plurality, universal coverage, interconnection, convergence, free access, and continuity.
  • The transmission of advertising or similar material as journalism or news is prohibited.
  • Prior censorship is prohibited.

Telecommunications:

  • The Federal Institute of Telecommunications (“IFETEL”) is created. Its objective will be to promote the efficient development of broadcasting and telecommunication, the regulation, promotion, and supervision of the use of the radio-electric spectrum and telecommunications, including providing these services, and the regulation of maximum periods for broadcast advertising.
  • The IFETEL will be made up of seven commissioners proposed by the President and ratified by the Senate. The appointments will be staggered and commissioners will remain in their posts for nine years. Candidates proposed by the President must be Mexican, older than 35 years, have carried out activities related to the post for at least three years, not have been a Secretary of a federal government department, Attorney General, senator, federal or state deputy, governor of a state, or head of the Federal District government for one year prior to their appointment, not have occupied any position in any of the companies holding concessions subject to regulation by the IFETEL, and demonstrate the technical knowledge necessary for the post.

Compliance with these requirements must be proven to a committee made up of the heads of the Bank of Mexico, the National Institute for the Evaluation of Education, and the National Statistics and Geography Institute. The committee will select at least three candidates for each position and will send them to the President who will select the candidate to be proposed to the Senate.

  • The regulation of competition in the area of telecommunications will be under the exclusive authority of the IFETEL.
  • The grant of broadcasting and telecommunications concessions will be under the exclusive authority of the IFETEL.
  • There must be a single law regulating the radio-electric spectrum, telecommunications networks, and broadcasting and telecommunications services.
  • A single type of concession is established to provide all types of services, including requirements to which economic agents declared preponderant by the IFETEL will have to submit.
  • Asymmetric regulation is established for preponderant economic agents, including their break up into essential parts and an accounting, functional, and structural separation of the same.
  • Free must carry/must offer service is required, with the exception of preponderant economic agents who may not benefit from this free-of-charge service. The service may not in any case result in an increase in costs to consumers until the market is freely competitive as declared by the IFETEL.

Economic Competition:

  • The Federal Economic Competition Commission is created at a constitutional level (the “FCC”) which will assume the work of the current Federal Competition Commission. The FCC will have the authority to eliminate barriers to competition, regulate access to essential raw materials, and order the disposal of assets.
  • The FCC will be made up of seven commissioners who will be named as provided for the IFETEL commissioners and must meet the same requirements, in addition to not having occupied any position in any of the companies that have been subject to any administrative proceedings before the FCC.

Means of Challenge:

  • The general rules, decisions, and omissions of the FCC and IFETEL may only be challenged by an amparo action without the possibility of a suspension of the decision being challenged, except in the case of the imposition of fines and orders for the disposition of assets.
  • An amparo action will not be permitted against procedural decisions made by the FCC and IFETEL.
  • Federal Circuit Courts and Federal District Courts specializing in broadcasting, telecommunications, and economic competition are to be created.

Authority of Congress:

  • The regulation of information, communication, broadcasting, and telecommunications, including broadband and the Internet, are included within the authority of Congress.

Legal Framework:

  • Within 180 days following the date the Order enters into force, the legal framework must be brought up-to-date, including the creation of special criminal offenses with respect to monopolistic practices and concentrations; the harmonization of permits and concessions; the right of reply; the prohibition against misleading or surreptitious advertising, and cross subsidies and preferential treatment; and the issuing by the IFETEL of authorizations for access and multi-programming.

National Television Channel Public Bidding:

  • Within 180 days following the appointment of commissioners to the IFETEL, at least two national television channels will be auctioned off, excluding concession holders who have 12 MHz in a particular region.

Universal Digital Inclusion Public Policy:

  • A shared public telecommunications network will be developed through public and private investment, as well as a broadband program in public areas until universal coverage is attained.
  • The President will develop programs for digital government, open government and information, promotion of tele-health, tele-medicine, and electronic clinics, and the development of applications, systems, and digital content.

The Order will enter into force on the day following its publication in the Federal Official Gazette.

The lawyers in the areas of economic competition and telecommunications of the firm would be pleased to provide further information about this subject.