Telecommunications Reform in Mexico from a Comparative Perspective

Abstract

This paper examines the process of reform in the Mexican telecommunications sector and makes comparisons with similar processes in the United States, New Zealand, and Brazil. Differences in policy responses are explained by the structure of the political institutions and the policy context in any given country. The policy lessons to be drawn from the regulatory experiences examined are that the sequence and the pace of reform influence policy outcomes. The speed with which the Mexican reform was carried out led to a lack of the institutional and legal support necessary to create a level competitive playing field. The permanence of a vertically integrated firm in the Mexican market, moreover, introduced consequential costs to the regulation of the industry. The results of this paper support the theoretical argument that privatization, in itself, does not guarantee the development of the sector and point to the need to attain a more effective regulation of competition in telecommunications.