Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Monday, June 11, 2007

WSJ on Mexican Competition

Posted by D. Daniel Sokol

Over at the WSJ, one of my favorite columnists Mary O'Grady discusses the importance of competition in Mexico generally with the recent Mexican Supreme Court decision on media competition.  While I think that O'Grady generally gets it right about the importance of competition to Mexico's economic development, she ignores entirely the role that the Comisión Federal de Competencia (CFC) plays in antitrust enforcement in creating a pro-competitive environment in Mexico.  This oversight is not warranted.  The CFC has been one of Latin America's antitrust success stories and under its Chairman Eduardo Perez Motta it increasingly is focusing its enforcement and competition advocacy in regulated industries-- those that have had significant state ownership and/or heavy state regulation.

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The telecommunication regulation issues in Mexico are complex because the inertia in the regulatory approach. In the recent WSJ article by Mary Anastasia O'Grady she point out the easy way to President Calderon, reappoint two former Mr. Fox appointed commissioners to the telecommunication regulator authority, both later were refused by the Senate, the supreme court ruled against such refusal this month. The easy way may be the wrong way, there is a policy opportunity from the technological change in telecommunications, the opportunity to reframe the regulation to the dominant carrier, TELMEX, and reframe the Telecommunications Law in order to give a clear mandate to regulate dominant operators and speed up entry. The current law have many mandates in conflicts each other like regulation, incumbent protection and social service goals. The telecommunication and competition commission are institutions which need to refocus in regulated sectors and promoted entry with new technologies before try to solve everything whith cost based regulation. The only expect outcome from try again a policy based in appointees will be the typical long litigation without any progress to the competition in the sector while the entry barriers remains to new competitiors and technologies.

Posted by: Prof. Ramiro Tovar Landa | Jun 14, 2007 6:57:01 PM

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