Mexico Wants Digital Platforms to Fund Telecom Infrastructure

Mexico's Digital Transformation and Telecommunications Agency (ATDT) has proposed regulating digital platforms such as Netflix, Amazon, Google, and YouTube, requiring them to earmark a percentage of their revenues for the creation of a solidarity fund for social coverage of telecommunications networks. This measure, which is part of a draft of secondary laws for the telecommunications sector, could lead to blockages to companies that do not comply with the new regulations.

José Antonio Merino, Head, ATDT, argues that the regulation seeks for large platforms to contribute to the maintenance of the telecommunications infrastructure, considering the increase in internet traffic driven by the use of these platforms. This "fair share" model is also supported by industry leaders such as Carlos Slim, who has pointed out that telecommunications provide free services to companies such as YouTube. However, the project establishes that the funds collected would not go directly to the operators, but would be destined to a fund managed by the ATDT, which has generated doubts about its effectiveness and transparency.

"We give free service to YouTube, to all of them. That is wrong," says Slim to El Cronista, highlighting that consumers assume the total cost of connectivity while big companies take advantage of the infrastructure to provide their services. "It is curious that a customer pays for broadband and those that bring the trillions, Netflix, everyone, everything that goes through the network is free."

The ATDT's proposal is part of a global debate about the responsibility of digital platforms in maintaining the infrastructure they use. In Mexico, internet traffic has increased by 25% in the last year, driven by key events such as the Buen Fin, the 2024 Elections, and international sports competitions, surpassing the global average of 17.2%. However, telecom operators have not seen an equivalent increase in their revenues, which has generated pressure on governments to find equitable solutions. The proposed regulation, as reported by Expansión, aims to balance this gap, forcing platforms to contribute to the development of more inclusive networks and reduce the digital divide.

The draft regulation establishes that digital platforms will have to contribute a percentage of their revenues, although the exact amount is not specified in the draft document. This contribution would be part of a solidarity fund, which would be destined to the development of infrastructure in remote areas of Mexico, supporting the social coverage of telecommunications networks.

According to a first draft of the proposal, shared by ConsumoTIC, this solidarity fund would be administered by the ATDT, and the contribution would apply even to foreign platforms. In addition, sanctions are contemplated in case of non-compliance, including the possibility of blocking access to platforms that do not comply with the regulations.

However, several experts warn that the measure could lead to possible corruption in the management of the fund. Radamés Camargo, Analyst, The Ciu, argues that the definition of the uses of this fund should fall on the Legislative and not on the agency in charge of implementing the regulation, in order to avoid possible misappropriation of funds.

Some experts warn that the measure could result in increased costs for platform users. Companies such as Netflix and Amazon could pass on these additional costs to their consumers, which would mainly impact end users and small digital ventures operating in the country. Uncertainty about which platforms would be affected by the regulation has also generated concern, as there is no clarity about the number of platforms that would be obliged to pay.

The proposed regulation has yet to be discussed in the Mexican Congress, and its implementation could have repercussions on trade relations with the United States, given that many of the companies targeted by the measure originate in that country. In addition, telecommunications experts and international regulators have pointed out that the ATDT's approach could complicate the outlook for future investments in the digital sector.