Along with important Mexican and international voices, CIDAC has insisted in recent years that a better State’s regulatory role over the economy is based on strong market regulation agencies in which there are no existing conditions of effective competition, markets in which for known historical reasons, the “invisible hand” does not lead to competitive markets but to inefficiencies and undue incomes, contrary to the public interest. These regulators have enough legal tools to fight monopolies. They also have a proper institutional framework to avoid excesses and abuses from other regulators. A proposal designed by CIDAC brings forward an institutional arrangement in which Mexican economic regulators cease to be decentralized bodies, as part of State Secretaries, to possess the same hierarchy as the aforementioned public agencies (both within the realm of Executive Power). During the past legislature, the Special Commission for Competitiveness at the Chamber of Deputies enjoyed a broad consensus on that regard but could not materialize itself into a reform. In 2013, Mexican political consensus has gone even further.
Last week, Mexican Senate sent a proposal for a constitutional reform on telecommunications, broadcasting and competition to the Chamber of Deputies. After receiving the newly improved Pact for Mexico, the Senate decided to cool down the consensus furor, by playing its role in the Mexican Constitutional scenario. Though some specific and important amendments were made, there are still two regulatory agencies with Constitutional autonomy, outside of the State Powers’ influence, and which possess great strength. Among other reasons, they will be powerful agencies because of the constitutional provision of its budgetary and organizational independence, even though they will still be held accountable to the Executive Power and Congress, throughout annual programs and quarterly reports. They will be strong because broad faculties of removing barriers to competition, deconcentration, asset stripping and network regulation regarding the IFETEL case will be ensured. The latter will particularly be strong since none of its rules or acts can be suspended by an amparo trial, which gives constitutional status to a similar provision that created a lot of talk in the recent discussion of the new Amparo Law. The Constitution’s reform bodies are already assuming that telecommunications and radio-broadcasting imply the exploitation of a public domain good and also constitute a public service of general interest. At this point, the Senate decided to give the competition authority a different treatment regarding their most intrusive acts (fines and asset stripping), by assuming that they can have irreparable consequences. This way, they only can be executed when there’s a firm sentence that would deny an amparo to an affected company. For all practical purposes, they will be suspended until the trial is finished, to which the Senate assumed that there would never be a high public interest at stake. Even though there is evident progress in the initiative, it is nonetheless surprising that telecommunications competence matters are an exclusively IFETEL business, creating an unnecessary complication due to the several overlapping in the competition matter and that would undoubtedly create large inefficiencies. The final solution is going to the extreme of leaving no room to judicial discretion.
Despite the aforementioned issue and some others that will require a thoughtful analysis for its legal instrumentation, Mexico could congratulate itself by publishing this constitutional reform in the Official Journey of the Federation. It remains to be seen if a similar treatment for regulatory agencies such as the ones received by the Regulatory Energy Commission or the National Commission on Hydrocarbons, particularly important due to the fact that they are State monopolies that don’t stop having negative effects on their respective markets just because they are State-owned.
CIDAC
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