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Zero Tariff: Issue to be resolved at the Supreme Court of Justice

In the coming weeks, the Second Chamber of the Supreme Court of Justice of the Nation (“SCJN”) will analyze, discuss and rule on the various appeals filed by América Móvil against the prohibition to charge other telecommunications service providers for terminating calls on its network, also known as “tarifa cero”.

The zero tariff is regulated by Article 131(a) of the Federal Telecommunications and Broadcasting Law (“LFTR”), which establishes the following:

Article 131. When the Institute considers that there are conditions of effective competition in the telecommunications sector, it will determine the criteria according to which fixed and mobile public telecommunications network concessionaires will enter into mandatory reciprocal traffic compensation agreements, without any charge for termination, including calls and short messages.

During the period in which there is a preponderant economic agent in the telecommunications sector or an economic agent that directly or indirectly has a national participation of more than fifty percent in the telecommunications sector, measured either by the number of users, subscribers, by the traffic in its networks or by the used capacity of the same according to the data available to the Institute, the termination rates for fixed and mobile traffic, including calls and short messages, will be asymmetric in accordance with the following:

a) The agents referred to in the preceding paragraph shall not charge other officers for traffic terminating in their network; and


In this case, América Móvil, as a preponderant economic agent, may not charge concessionaires that provide similar services for using its infrastructure to terminate traffic on its network.

One of the main objectives of the amparo lawsuits filed is to obtain a declaration of the unconstitutionality of the aforementioned provision, since América Móvil believes that the Mexican Congress invaded the powers of the Federal Telecommunications Institute (“IFT”) to regulate the rates of telecommunications services.

This issue is of utmost importance in light of the constitutional reform on telecommunications, since if Article 131(a) of the LFTR is declared unconstitutional, América Móvil will be able, among other things, to request payment of what it ceased to receive as a result of such prohibition and be able to charge in the future for the termination of traffic in its network.

There are opinions that consider a resolution in this sense as a hard blow against the telecommunications reform and its effects, having serious consequences for competitors and users, reversing the reduction of prices in telecommunications services and the possibility for the preponderant economic agent to increase its power in the market by displacing other telecommunications service concessionaires.

Other stakeholders consider that the telecommunications market would not be affected, since it opens the possibility for competitors to invest in the development of telecommunications infrastructure, and also consider that the IFT would regain power in its constitutional autonomy, being the one who should impose the zero tariff to such economic agent and not the Congress of the Union through the LFTR.

Some legislators who participated in the implementation of the constitutional telecommunications reform have come to the defense of such reform arguing that the Mexican Congress acted within its powers to enact laws on general means of communication, information and communication technologies, broadcasting, telecommunications, including broadband and Internet, in other terms, in terms of section XVII of Article 73 of the Mexican Constitution, including broadband and Internet, among others, in terms of section XVII of Article 73 of the Mexican Constitution. It has even been argued that such zero tariff does not have the nature of a tariff to be imposed by the IFT, but is an express prohibition in the LFTR as part of a public policy in the telecommunications sector.

Acedo Santamarina

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