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Publication of the Provisions to allow Telecommunications Service Providers access to facilities and rights-of-way of the National Electric System.

On October 29, 2018, the General Administrative Provisions to allow Service Providers of the Telecommunications Industry access to facilities and rights-of-way of the National Electric System (“Provisions”) were published in the Official Gazette of the Federation.

The objective of these Provisions is that Telecommunications Service Providers (“TSPs”) have access to the more than 11 million poles of the Federal Electricity Commission (“CFE”) and rights of way of the National Electric System (“SEN”), which will stimulate competition, modernize and encourage the use of new technologies.

This will be possible because the CFE has a support infrastructure in urban and rural areas of the country, which reach 98% of the population. As a result, the coverage of telecommunications services will be extended through the CFE’s electric power distribution network (“Red”).

The area of opportunity of these Provisions consists of improving infrastructure sharing practices, since it reduces development costs and leads to a better price for end consumers.

In order to grant access to SEN facilities and rights-of-way, the Access Providers (“Provider”) shall process the requests in the order of priority with which they were received through the Electronic Management System (“SEG”), electronic platform developed by each Provider, in which it will receive, process, register and respond to the requests for access to SEN facilities and rights-of-way. In the event that there is insufficient access capacity for applicants, the Provider will provide alternatives such as building additional infrastructure or conducting an auction-type allocation mechanism. Therefore, these new provisions allow TSPs to enter into a contract directly with Suppliers and eliminate the current procedure based on the not very objective and functional guidelines developed by CFE. This implies that the requirements, rights and obligations are clearer and provide greater legal certainty to TSPs.

TSPs that have a contract in force at the date of entry into force of these Provisions and have infrastructure installed in the Network shall pay an annual economic remuneration to the Provider of $100.84 per pole, as long as the infrastructure used for the provision of the service exceeds the established weight limit corresponding to 250 kg/km. In addition, they may keep the additional weight for up to 10 years.

As for the calculation of the fair remuneration for the deployment of infrastructure and equipment under the TSP Provisions, this will be $6,544 pesos per kilogram. These calculations are based on mathematical formulas, in addition to which the cost of the access study must be paid, which will be $100.02 per pole for each PST and is charged on a one-time basis. This encourages companies to adopt lighter technologies, since the lighter the infrastructure, the less they will pay.

Pursuant to the provisions of the Fifth Agreement of the Provisions, the Provisions will become effective on January 1, 2019.

José Luis Mejía Estrada

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