Review of the Ex-Ante Regulatory Obligations in the Broadcasting Sector

Project executed on behalf of Mexican Instituto Federal de Telecomunicaciones (IFT)

Project Objective

The Instituto Federal de Telecomunicaciones (IFT), the Mexican Regulatory Authority, had imposed a set of ex ante regulatory remedies on the dominant service provider (DSP) in the broadcasting sector. Under the existing regulatory regime, the IFT had to update these ex ante remedies on a biennial basis.

Axon was commissioned by the IFT to help update these remedies in the light of the latest market developments, the existing situation in the wholesale market, and international best practice.

Project Description

Axon provided end-to-end support to the IFT throughout this process.

The first activity consisted of the analysis of the overall existing regulatory and legal regime, as well as the extensive comments about the existing regime, provided by more than 15 stakeholders. This analysis was complemented with an in-depth assessment of international best practice in the regulation of broadcasting markets, including the regulation and pricing of wholesale broadcasting services. Based on this information, we developed a set of recommendations to update the remedies that should be imposed to broadcasting Dominant Service Providers (DSP).

During the project, we also performed a Regulatory Impact Assessment (RIA) to understand the potential impact of the proposed new remedies, and assess if these were likely to meet the desired objectives.

Axon provided full support to the IFT during the administrative procedure of notification of the updated regulation to the DSP, including the review of its views and arguments, the elaboration of effective counterarguments and the finalisation of the remedies. Based on this, we produced the final resolution, which was submitted for the IFT Board’s approval.

As a result of Axon’s work, updated obligations were imposed on the DSP in the broadcasting sector, regarding the sharing of its infrastructure and the provision of wholesale services. Accordingly, the DSP must make its active infrastructure available to its competitors to carry out the transmission of wholesale signals in the event that there is no vacant capacity to share its passive infrastructure. Further, the DSP has been required to implement the accounting separation and an electronic management system with relevant information on its infrastructure, in addition to other obligations regarding advertising.

Key Takeaways

The outcomes of our work were instrumental in the elaboration of IFT’s formal decision (available here), fostering competition in the broadcasting sector.