RESTRICTED
GENERAL AGREEMENT S/NGBT/W/3/Add.4
3October 1994
ONTRADE INSERVICES
(94-1987)
Negotiating Group onBasic Telecommunications Original: Spanish
COMMUNICATION FROM MEXICO
Response toQuestionnaire onBasic Telecommunications
TheattachedcommunicationiscirculatedattherequestofMexicotoMembersoftheNegotiating
Group onBasic Telecommunications.S/NGBT/W/3/Add.4
Page2
MEXICO
PartI
1. According totherelevant regulations inMexico, basic telecommunications services arethose
ofstrategic importance fornational development, andinclude basicpublic telephone services, telegraph,
national satellite communications, andtheinstallation, establishment, operation andrunning ofpublic
telecommunications networks onnational territory.
Broadly speaking, ourregulatory regime canbedescribed ascompetition-based because the
onlyservices operating under monopoly conditions aretelegraph andsatellite transmission services,
asdescribed below, andtelephone services. Other telecommunications services such ascellular
telephones, specialized fleetmobile radiocommunications, paging, datatransmission, cable TVand
value-added services, forexample, havealways beenopen tocompetition. With regard tosatellite
communications, despite thefactthattheyoperate asaState monopoly, regulations inforce provide
forthedelivery ofpublic services using national satellites, asinthecaseofteleports anddatanetworks
using VSAT earth stations.
Telecommunications services andnetworks which donotcome under thedescription given
inparagraph 1arenotconsidered tobebasic telecommunications. They include value-added
telecommunications services andsystems which interface withfacilities obtained orleased from any
public telecommunications network authorized bytheGovernment ofMexico.
2. Theregulations inforce distinguish between networks andtelecommunication services even
when thenetworks andservices areclosely related. Thisapplies toconventional telephone andcellular
telephone services, forexample.
Theregulations clearly define atelecommunications network, aprivate telecommunications
network, apublic telecommunications network andalocalsupplementary telecommunications network,
with reference totheinstallations, infrastructure orfacilities included inthenetworks.
Telecommunications services aredefined asthose offered tothirdparties orthegeneral public, whereby
ausermayestablish communication within thetelecommunications network oroutside it.
3. Inouropinion, thedefinitions ofnetwork andservice inMexican regulations correspond to
those intheGATS Annex onTelecommunications.
4. Theprovision ofpublic telegraph services, thesetting upofsatellite systems, theiroperation
andsupervision,satellitetransmissiondeliveredbythepublicservice,andearthstationswithinternational
linksforsatellite communications arereserved totheFederal Government ordecentralized bodies duly
established forthispurpose.
Furthermore,basicpublicnationalandinternationallong-distancetelephoneservicesarereserved
tothecompany Teléfonos deMéxico S.A.deC.V.until10August 1996. Atthemoment, preparations
arebeingmadetoinformthepublicoftheconditionsunderwhichpubliclong-distancetelephoneservices
willbeopened uptocompetition asoftheabove-mentioned date.
5. Public telegraph services andthose related totheestablishment ofsatellites andsatellite
transmission referred tointhereply toquestion 4,areprovided nationally bythedecentralized Federal
Government entity known as"Telecomunicaciones deMéxico" (Telecomm).S/NG BT/W/3/Add.4
Page3
Public telephone services arealsosupplied nation-wide byatotally private enterprise whose
monopoly willendinAugust 1996 asmentioned above.
6. Under theLawonForeign Investment, foreigners mayhold49percentofshares inbasic
telecommunications networks andservices, or100percentofshares invalue-added telecommunications
services.
7. Notapplicable, astheregime permits competition.
8. Mexico hassigned bilateral agreements relating tothesupply ofsomebasictelecommunications
services withtheUnited States ofAmerica. These include, forexample, cellular mobile telephone
services andspecialized fleetradiocommunication services. Themainaimoftheagreements istoshare
radio frequency bands intheborder areas between ourcountries.
Similarly, theStatehassigned arange ofagreements withthegovernments ofother countries
oninterconnecting ourbasic telecommunications networks.
PART II
Competition
Subsectors
Voice telephone services
(i) Thebasicvoice telephone service isprivatized andatpresent licensed totwoenterprises,
oneoperating atthenational levelandtheother asasubsidiary attheregional level.
Itmust bepointed outthatthedelivery ofthisservice isopen tocompetition,
andapplicationsfromenterprisesinterestedinprovidingitarecurrentlybeingconsidered.
Atpresent, national andinternational long-distance services aresupplied exclusively
bythetwoauthorized enterprises operating voice services until1996, when theywill
beopened uptocompetition. TheFederal Government isanalysing thepolicies to
beimplemented inthisarea.
Inthissubsector, foreign enterprises withlegal personality andtheir owncapital
resources areallowed toparticipate asminority shareholders orholdshares withlimited
voting rights inauthorized companies provided theyundertake toconsider themselves
Mexican withregard totheshares theyacquire, donotrequest oraccept diplomatic
intervention bytheircountries oforigin orforeign countries, orbyanypublic and
private international body, onpainofforfeiting allthegoods andrights theymayhave
acquired totheMexican nation.
(ii) Themainrequirement ofthissubsector isthatcontrolling shares should beinMexican
hands.
(iv) Theposts ofmanager, director andboard members maybeoccupied byforeigners
provided theydonothavemajority control. Foreign ownership oflandorfacilities
isnotpermitted.S/NGBT/W/3/Add.4
Page4
(v) These kinds ofservices require alicence from theMinistry ofTransport and
Communications onbehalf oftheFederal Executive andcanonlybeissued toMexican
citizens orcompanies.
Themostimportant conditions tobemetbyanauthorized enterprise relate totariffs,
thequality andrange oftheservice andsocial commitments indisadvantaged areas.
Telegraph services
(i) Thisservice isreserved totheFederal Government.
Facsimile services
(i) Thesupply ofthisservice isopentocompetition andforeign suppliers mayparticipate
indelivery.
(ii) Competition forthisservice isopentoanunlimited number ofsuppliers.
(v) Apermit from theMinistry ofTransport andCommunications isrequired tosupply
these services.
National andinternational satellite services
(i) This service isreserved totheFederal Government through adecentralized
enterprise,with respect totheadministration, control andoperation ofcommunications
satellites andlongdistance international links. Thenational andforeign private sector
maycompete tosupply satellite communications services.
Cellular mobile services
(i) Thisservice isprivatized andopentocompetition. Atpresent, services aresupplied
bytenenterprises, oneatthenational levelandnineattheregional level.
Foreign capital mayparticipate inthissubsector: foreigners mayhold49percentof
thecapital stock ofcompanies providing theseservices andupto100percentofcapital
stock where thisisspecifically authorized.
(v) Licences must beobtained from theMinistry ofTransport andCommunications on
behalf oftheFederal Executive.
PART III
Regulatory Issues
1. Weunderstand thequestion tobeasfollows:
Dobasic telecommunications suppliers participate inanywayinthedefinition ofregulatory
issues?
TheMinistry ofTransport andCommunications, onbehalf oftheFederal Executive, is
responsible forformulating regulatory policy. Regulations andamendments thereto emerge fromlaws,
regulations, decrees, agreements andspecific individual authorizations issued forinterested parties.S/NG BT/W/3/Add.4
Page5
Withtheexception ofareaswhich come under lawswhich mustbeapproved bytheFederal Legislature
(Chamber ofDeputies), other regulatory instruments aredirectly within thecompetence oftheFederal
Executive.
Forgeneral instruments suchaslawsorregulations, basic telecommunications suppliers and
parties working intelecommunications areconsulted about howthecontent offirstdrafts mayaffect
theirinterests, ortogivethem anopportunity tosuggest howtoimprove theproposed measures.
Suppliers ofgoods andservices actively participate indrawing upandamending standards during
technical standard-setting processes through machinery provided forintheFederal LawonMetrology
andStandardization anditsregulations, which willshortly bepublished.
2. Theaforementioned Federal LawonMetrology andStandardization laysdown anddescribes
theclearly-structured organization ofmeasures concerning metrology andstandard-setting andrelated
arrangements. Inbrief, theMinistry ofTransport andCommunications isresponsible fordrawing
uppreliminary drafts ofMexican standards ontelecommunications andsubmitting themtotherelevant
nationalstandardizationcommitteeforconsideration.Iftherearenocommentsmade,orifthecomments
donotneedtobetaken intoaccount, theMinistry thenpublishes theMexican official standard in
question.
Thesuppliersofbasictelecommunicationsandtelecommunicationsgoodsandservicesingeneral
takepartintheaforementioned National Advisory Committee onStandardization when itdeals with
thetelecommunications field, andinworking groups when theinitial drafts arebeing drawn up.
3. Under Mexican law,general channels ofcommunication fallexclusively within thepurview
ofthefederal authorities. TheFederal Executive exercises itspowers through theMinistry of
CommunicationandTransport,whichinturnoverseesadepartmentofcommunicationsandtechnological
development.
Under theSub-Secretariat therearethreegeneral directorates dealing withtheregulatory issues
oftelecommunications: theGeneral Directorate ofCommunications Policies andStandards, theGeneral
Directorate ofBroadcasting Systems andtheGeneral Directorate fortheDevelopment of
Telecommunications andInformatics. Thefirsttwodirectorates areresponsible forregulating
telecommunications networks andservices, andthethirdisresponsible interaliafortheadministration
andsupervision oftheradio frequency spectrum.
Under theLawonGeneral Channels ofCommunication disputes concerning theinterpretation
ofandcompliance withprovisions ontelecommunications aresettled onthebasis of:
(i) Theterms oflicences andcontracts themselves;
(ii) TheLawonGeneral Channels ofCommunication, itsregulations andother special
laws;
(iii) Incases notprovided forintheLaw, theprovisions oftheTrade Code;
(iv) Failing that,therules oftheCivil Code oftheFederal District andFederal Code of
Civil Procedure; and
(v) Failing that,theneeds ofthepublic service inquestion.
4. TheMinistry ofTransport andCommunications, onthebasisoftheprovisions ofChapter VIII
oftheTelecommunications Regulation, isresponsible forestablishing theadministrative provisions
andtechnical standards foroperating radio communication systems. Authorization fromtheMinistry,S/NGBT/W/3/Add.4
Page6
subject tocompliance withtherequirements governing licences andpermits, isneeded tousetheradio
frequence spectrum. OnthebasisoftheNational Frequency Allocation Schedule andtheavailability
offrequencies, theMinistry decides onapplications forpermits andlicences.
5. There isnodifferential treatment forforeign telecommunications suppliers ascompared to
national suppliers. Once thenecessary requirements forapermit orlicence todeliver aspecific service
havebeenmet,there isnodifference intreatment withregard totheallocation andauthorization of
frequencies.
6. Therequirements fornumbering codes inpublic services arebased ontheMexican Official
Standard onNumbering Codes which iscurrently being drafted. Network identification codes are
assigned onlytoservice suppliers authorized bytheMinistry ofTransport andCommunications and
onthebasis ofregistration andsupervision bytheMinistry.
7. Anynational orforeign supplier inpossession ofapermit orlicence from theMinistry of
Transport andCommunications authorizing thedelivery oftelecommunications services, inaccordance
withthetechnical andadministrative requirements andprovisions governing foreign investment,
invariably receive thesame treatment.
8. Under Mexican legislation mandatory standards arethoseknown asMexican Official Standards.
Onthebasis ofprocedures under theFederal Law onMetrology andStandardization, the
telecommunication standards aregoing through theratification process. Inthemeantime, 22Mexican
Official Standards ontelecommunications, dealing withthetechnical parameters oftelecommunications
equipment, interfaces andappliances, willshortly bepublished.
9. Theblueprints forMexican Official Standards, subject toapproval, havebeensubmitted to
theNational Advisory Committee onStandardization forconsideration and,ifnecessary, proposals
foramendment. Representatives ofnational andforeign bodies from thepublic andprivate sectors
working intelecommunications inthecountry arerepresented ontheCommittee without distinction.
Theprivate sector isinvolved indrafting standards asdescribed inthereply toquestion 2,PartIII,
ofthisquestionnaire.
10. Nationally andforeign produced telecommunications equipment which isconnected tooruses
ageneral communication channel formarketing oroperational purposes mustbeauthorized bymeans
ofacertificate oftypeapproval. Laboratory testsandother aspects ofequipment approval areprovided
forinthecountry 'slegal instruments. Specific procedures andmutual recognition agreements are
intheprocess ofbeing drawn upandconcluded.
11. Under Mexican regulations, telecommunications terminal equipment mayfreely beattached
toauthorized networks provided thenecessary certificate oftypeapproval hasbeenobtained. The
suppliers ofservices maynotmake delivery conditional uponthepurchase ofspecific equipment from
them oranyother enterprise, which means thatusers mayfreely choose thesupplier andequipment
bestsuited totheirneeds.
12. There arenorestrictions stating thatbasictelecommunications suppliers which alsomanufacture
telecommunications equipment must usetheirownswitches. However, basic telecommunications
suppliers cannot make unjustified andexclusive supply acondition ofpurchase.