Mexico’s Telecommunications Law: Bolstering Access or Curtailing Competition?

On April 23, 2025, Mexican President Claudia Sheinbaum submitted an initiative for a new telecommunications law to the Senate. This initiative seemed to catch many off guard, as did the speed with which it was unveiled and initially advanced. After advancing quickly, Sheinbaum has slowed the legislation due to public outcry. The legislation is expected to advance, with a final vote expected to occur by the end of May 2025.

Q1: What is the current telecom and broadcasting law being debated in Mexico’s Congress, and why does it matter?

A1: The proposal introduces substantial changes to the legal framework around Mexico’s information and communication technology (ICT) sector following a constitutional amendment passed last year that dissolved the country’s ICT regulator. Some of these changes may violate the Mexican constitution, the United States–Mexico–Canada Agreement (USMCA), and various other international treaties (addressed below). Furthermore, many of the changes appear to jeopardize Mexico’s compliance with international agreements, potentially exposing the country to legal and reputational challenges. Lastly, the proposed law faced widespread criticism promoted by digital platforms and citizen groups concerned with freedom of expression. Indeed, the criticism ley censura (censorship law) circulated widely after the draft law was unveiled, referring to elements of the legislation that appeared to put at risk free expression.

Q2: The law has generated substantial controversy and pushback—what are the main areas of concern?

A2: The legislation has generated concerns about government interference in the marketplace, free donations of spectrum in an anticompetitive manner, commercial license exemptions for government operators, the potential blockage of digital platforms, and the prohibition of foreign advertising on media platforms. These concerns are summarized in turn:

Granting commercial licenses to government entities for retail market competition: Under current law, commercial licenses held by the government are limited to wholesale shared networks. The law would allow the government to provide services to end-users directly for commercial purposes (something the 2013 telecommunications reform expressly forbid). Current law limits commercial licenses to wholesale shared networks, which are intended to build capacity in other networks and cover users uncovered by their services.

The government’s ability to compete in retail markets with public funding and state resources generates potential unfair advantages and could drive out competition in the ICT space. In this sense, Mexico risks violating constitutional provisions (Article 28) on commercial exploitation of spectrum without public bidding and potential breach of USMCA for anticompetitive practices and preferential treatment for publicly owned telecommunications providers.

Free donations of spectrum licenses without compensation: The legislation would permit the government to give spectrum away without competitive bidding and compensation. Past CSIS research has shown how uncompetitive spectrum pricing—Mexico has some of the highest spectrum prices in the world—and state subsidies for government-supported telecommunications companies have deleteriously impacted Mexico’s ability to grow its digital sector. Such practices also put Mexico at odds with articles of the USMCA (Article 18.21.4) that demand public bidding processes for spectrum, transparent processes for promoting competition, and the principle of neutrality.

Commercial license exemptions for government operators: Aspects of the proposed legislation exempt government commercial license holders from regulatory obligations applicable to the private sector. In Chapter 18 of the USMCA, various articles speak to the requirement of neutrality for government-owned telecom providers. Furthermore, past CSIS research has demonstrated how government support for providers such as Altán Redes has placed private sector companies at a competitive disadvantage.

Digital platforms: In the days following the legislation’s introduction, critics cited its ability to curtail speech and expression on digital platforms for noncompliance with “applicable regulations.” Following this criticism, President Sheinbaum stated that she was ambivalent to these aspects of the law and would still push for its passage if these articles were to be extricated. Notably, this is one of the few instances where Mexico’s opposition has pushed Morena’s supermajorities to concede on certain legislative points.

Prohibition on foreign government advertisements: Arguably, one of the catalysts for the current legislation was advertisements sponsored by the Trump administration, which dissuaded would-be-migrants from attempting to cross the southern border. Sheinbaum has harnessed criticism of these advertisements to push for the entire piece of legislation, while permitting exceptions only for cultural and tourism-related purposes.

Q3: How does the proposed law intersect with the USMCA at a time of heightened uncertainty?

A3: As discussed previously, the proposed legislation likely runs afoul of Chapter 18 of USMCA, which pertains to telecommunications and requires signatories to maintain a regulatory body that is “separate from, and not accountable to, a supplier of public telecommunications services.” Mexico initially opened itself up to this challenge when Congress voted in late 2024 to eliminate the Federal Telecommunications Institute (IFT), along with a raft of other independent regulatory agencies. The proposed legislation, however, goes a step further, not only firmly ensconcing the IFT’s replacement Digital Transformation and Telecommunications Agency (ATDT) in law, but also expanding the government’s powers to intervene in the ICT sector. The ATDT would be empowered to regulate public and private telecommunications firms separately, opening the door for the government to privilege its own ICT projects at the expense of private firms and the health of the market.

Such maneuvers come at a moment when the stakes for Mexico are at historic highs. The Trump administration has signaled its dissatisfaction with the status quo of trade in North America and a desire to not only accelerate the timeline for the planned 2026 joint review of USMCA but to use this as an opportunity to renegotiate the deal as a whole. While to date the Sheinbaum administration has been able to navigate the minefield of Trump’s tariff threats, this has delayed the eventual trade reckoning, not resolved it. For Mexico to enter this process by slanting the playing field in the digital sector to privilege government entities and domestic incumbents at the expense of U.S. firms seems to be treading a dangerous path. Indeed, in the coming weeks, Mexico will not only need to contend with the fallout from this proposed law but also judicial elections scheduled for June 1, which have raised serious concerns for the future of legal stability in the country.

Q4: What other challenges does Mexico face in its ICT sector?

A4: While Mexico boasts a robust and mature domestic telecommunications sector, serious impediments remain to realizing its full potential in this space. For one, the Mexican ICT sector remains overwhelmingly concentrated in the hands of a single firm, América Móvil, which holds approximately 70 percent of the market. This market share has proven stubbornly difficult to bring down, despite the company’s designation as a preponderant economic actor in 2014 by the IFT and the entry of a number of new ICT firms. During President Andrés Manuel López Obrador’s term, the billionaire owner of América Móvil enjoyed a close relationship with the government, despite the former’s frequent criticism and early efforts to dissolve the IFT for failing to promote a more level playing field in telecommunications. (Notably, América Móvil subsidiaries Telcel and Telmex also oppose the new telecommunications law on the grounds that it undermines competition.)

América Móvil’s dominant position in the market is aided in part by Mexico’s notoriously high spectrum fees, among the largest in the region. This advantages well-entrenched incumbents who are able to pay a premium for spectrum, while newcomers to Mexico’s ICT space are often priced out. Indeed, Mexico’s first 5G spectrum tender received a tepid reaction from the private sector, despite the immense potential 5G deployment could unlock for the country. By permitting the government to remand spectrum for itself without compensating original owners, the proposed law risks exacerbating this very challenge, making it even more risky for ICT providers to invest in new spectrum. Though further clarification of the law may reduce these risks, it may also ultimately disadvantage those communities on the opposite side of the digital divide in Mexico, as the law positions the Mexican government as the primary provider of telecommunications for rural and underserved communities, in doing so, spoiling incentives for private firms to invest in these areas.

A final challenge Mexico faces in the ICT sector concerns the role of Huawei infrastructure. Huawei has been present in Mexico since at least 2001, with a marked advance when it partnered with América Móvil subsidiary Telcel in 2012 to modernize the company’s network. More recently, Huawei was selected, along with Nokia, as a vendor for Mexico’s Red Compartida, a public-private partnership intended to build out a wholesale 4.5G network covering rural and underserviced areas. While the deal reportedly would allocate Huawei equipment only in southern Mexico, away from the U.S.-Mexico border, not only have reports found Huawei towers installed in border states, but the nature of digital communications also means a geographic buffer offers little in the way of security assurances. Meanwhile, Huawei’s cloud datacenter buildout in Mexico raises concerns for not just telecommunications, but emerging technology and artificial intelligence as well.

Q5: What is the importance of Mexico’s telecommunications policy to its economic growth, dynamism, and foreign direct investment?

A5: As Mexico faces a period of profound uncertainty, increasing ICT sector competitiveness represents a well of untapped potential. Bridging the digital divide would help bring new economic opportunities to millions of Mexican citizens, connecting them to new opportunities for education and employment. As the United States pursues bold initiatives aimed at cementing its edge with artificial intelligence, semiconductor design, and other emerging technologies, ensuring Mexico has the technical infrastructure and know-how to complement this will be essential. There are promising signs that the Sheinbaum administration recognizes the critical role ICT will play. In response to the protests against perceived censorship, Sheinbaum has signaled she is willing to renegotiate elements of the law. Any such review should also be an opportunity to ensure the bill’s framework aligns incentives for public and private sector competitiveness in ICT. Areas of focus in this regard could include clarifying the process through which the government could request spectrum and establishing a process through which to reduce spectrum fees and potential incentives for companies investing in rural areas.

The Mexican government should also seek to more clearly enumerate the ATDT’s role, as well as procedures to deconflict it with government-sponsored telecommunications programs like the Red Compartida. While the elimination of the IFT as an independent agency represents a step back for competition in Mexico’s ICT space, the Sheinbaum government should take steps to ensure that the replacement ATDT adheres to strict standards of independence and impartiality within the framework of a federal agency. On May 14, the Sheinbaum administration announced that the ATDT will exercise “technical independence” on matters of telecommunications policy, an early indication that the government has taken such matters to heart, though implementation will be a key area to watch as the law continues to work its way through to Sheinbaum’s desk.

Ryan C. Berg is director of the Americas Program and head of the Future of Venezuela Initiative at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Henry Ziemer is an associate fellow with the Americas Program at CSIS.