An Economics-Based Approach to ‘Effective Competition’ in Mexico’s Telecommunications Sector

Our paper seeks to define the term effective competition as used in Mexico’s telecommunications sector and implemented through two main regulatory tools: the determination of preponderance and the subsequent imposition of asymmetric measures. To lift, modify or deepen these measures, we argue, it will be necessary to determine the existence (or absence) of agents with substantial market power in telecommunications markets as well as to consider the relationship between the static and dynamic components of efficiency and effective competition. We use the European experience as a benchmark for the implementation and measurement of effective competition, including the definition of relevant markets where substantial market power or lack of effective competition can be found. In doing so, we offer suggestions on possible methodologies that could be used in Mexico to determine said markets and review both markets and the effectiveness of asymmetric policies aimed at more efficient telecommunication markets. In light of this analysis we offer recommendations and thoughts on the use and analysis of effective competition