Telmex filed the injunction after a serious and detailed analysis because many of the tariff regulations go against the public interest that COFETEL is responsible for advancing. Far from protecting consumers, the regulations protect Telmex’s US-based competitors.
For example, one of the new requirements states, Telmex cannot reduce the rates for its services unless its competitors have previously established lower rates, which could result in a significant loss of Telmex’s market share beyond what is considered normal in international experience. These regulations require Telmex to establish a price floor, which limits the company’s ability to pass on savings and will result in higher prices for consumers. The only objective appears to be that Telmex’s competitors will realize higher profit margins through an unjustified market advantage, harming Mexican consumers.
The regulations also benefit Telmex’s competitors via additional subsidies and require the company to offer services to its competitors below its costs. The regulations state that the tariffs associated with, among others, billing and collection, emergency calls, operator calls, directory inquiries, directory listings, collect calls and installation and leasing of long-distance circuits, including local connections, must be provided by Telmex to other license holders, and Telmex is limited only to recovering its direct costs including the cost of capital. This is without incorporating the related costs necessary to provide these services.
As a result, these rules eliminate incentives for carriers to invest in extending their networks and in creating jobs as well as in offering services to high-cost areas and improving the service quality to low-income consumers throughout the nation. This will severely limit the development and expansion of the telecommunications industry in Mexico.
Telmex is willing to help develop policies that truly benefit consumers while ensuring equal opportunity for all carriers. The company does not believe that these principles are reflected in COFETEL’s regulations and, in fact, run counter to them. This is why the company felt the need to file the legal complaint and seek protection from the federal justice.
Telmex reaffirms its commitment to continue improving the quality and diversity of its services and introducing new technologies that maintain the company’s telecommunications leadership, and bring the benefits of competition to more Mexicans.
