President Sheinbaum’s Telecommunications Recipe

The countdown has come to an end. Last week, the Mexican Congress approved the reform that eliminates several of the so-called autonomous constitutional bodies. The damage is done.

The origin and history of these bodies go hand in hand with Mexico's complex democratic transition. But, in general terms, they are institutions that break with the traditional idea of division of powers -executive, legislative, and judicial- to perform technical functions under the regulatory state model, whose autonomy is anchored to the constitutional text to ensure that their decisions do not depend on political whims and, in that sense, their legitimacy does not depend on political-electoral cycles.   

Hence, these bodies can be explained as a response to the autocratic power of the figure of the President of the Republic and have implied taking away the President's power to limit his incidence in democratic life and the economy, whether to protect the value of money, organize electoral processes, make public information transparent, ensure economic competition or regulate the telecommunications and broadcasting market, among other tasks. 

This last case, entrusted to the Federal Telecommunications Institute (IFT), is particularly interesting because it was the institution in charge of implementing perhaps the most successful reform of then President Peña Nieto. This reform soon gave structural results by declaring Carlos Slim's cell phone company a preponderant economic telecommunications agent. In turn, it reduced the onerous prices of mobile communication services, mainly benefiting the most disadvantaged social sectors. Likewise, since its creation, the IFT has promoted advanced public policies in both telecommunications and digital markets, resulting in better regulation of these sectors and generating economic resources for the Mexican State. This clearly justified its permanence and, instead, a reflection of its improvement and strengthening.  

What does this reform imply once it is finalized? First of all, Mexico will open one more issue with the United States and, in this way, will arrive with another weak flank to the review of the United States-Mexico-Canada Agreement (USMCA) in 2026. Although it is always open to discussion what is meant by “autonomous from the executive,” the truth is that, when this treaty was agreed upon, the image of autonomy was precisely that of the IFT. This was the idea held by the three countries when it was expressly established, in chapter 18 of this international instrument, that for Mexico, the telecommunications regulatory body should be autonomous from the Executive Branch and independent in its decisions and operation.

With the disappearance, however, of the IFT, many of its powers to promote competition will go to a new body, whose membership is not yet clear, with specific technical independence, it is true, but dependent on the Secretary of Economy of the Executive Branch. Even worse, other powers will probably go directly to the Agency for Digital Transformation and Telecommunications, a new Secretary of State in the process of creation, with a wide range of powers in several areas ranging from digitizing procedures of the federal public administration to operating telecommunications services, managing public databases and manufacturing government software.   

This is the second problem of this reform: the enormous power granted to this new Agency -to the extent that it is not clear whether it will have the dual role of judge and party, by assuming the responsibility of regulator but also being an operator in telecommunications and internet. This can only be explained by the confidence that President Sheinbaum has in its future head. It is not a design that seeks to build state capacities, resulting from a public policy rationale or an institutional design but rests on personal trust. And, beyond the capabilities of this individual and his good work in Mexico City, when powers are added to an institution, they are strengthened until a point is reached where the accumulation of powers is such that it leads to the hindrance and paralysis of the institution in question. The big question is whether this ambitious agency can ensure adequate regulation of the telecommunications market, promote relevant public policies on digital platforms, and outline a proper commercial strategy vis-à-vis Canada and the United States. On the contrary, it will simply be inoperative in the face of these and many other responsibilities.   

The third problem with this reform is its inferior legislative technique. The new majority in power still does not understand that democratic legitimacy is insufficient to implement adequate public policies. It is also indispensable to have well-designed and better-implemented legislation. As with judicial reform, the reform that eliminates a good part of the autonomous constitutional bodies is an unprecedented legal mess, even to the detriment of its objectives. The uncertainty caused by its poor legal design ensures litigation on issues ranging from labor rights to constitutional rights and, of course, the USMCA. 

It is worrying that the government of President Sheinbaum, in one of the most relevant sectors for the development of countries, is debuting with new unpromising legislation, which, instead of offering a clear path in this sector, is already creating uncertainty, and that among other consequences will be unnecessary litigation. Faced with the challenges and opportunities provided by digital platforms and artificial intelligence, telecommunications, and, of course, the complex return of Donald Trump to the presidency of the United States, Mexico, instead of strengthening and improving its state capacities, responds with a recipe based on three ingredients: loyalty, ideology, and lousy legal technique.