USMCA and Telecoms: Key Issues in Mexico's Regulatory Shift

In collaboration with Etzel Salinas, Senior Associate Hogan Lovells

On Sept. 17, 2025, the Mexican Ministry of Economy issued a public call for stakeholders to submit comments on the United States-Mexico-Canada Agreement (USMCA). USMCA negotiations – in preparation for the 2026 review mandated by Article 34.7 – will have substantial impact across multiple industries, and telecommunications is no exception.

This public call takes place at a critical juncture, as Mexico is undergoing profound changes to its institutional framework. In 2024, constitutional amendments resulted in the dissolution of constitutional-autonomous bodies, such as the Federal Telecommunications Institute (IFT) and the Federal Economic Competition Commission (COFECE), transferring their functions to new entities under the federal executive. In 2025, the legislative process has continued with several amendments and enactment of new laws or amendments thereto.

Institutional redesign is underway. Before the end of 2025, two new regulatory bodies are expected to be established: the Comisión Nacional Antimonopolio (National Antitrust Commission, or CNA) and the Comisión Reguladora de Telecomunicaciones (Telecommunications Regulatory Commission, or CRT). Both are set to play an important role in overseeing Mexico’s telecommunications markets.

In this context, three critical issues under the USMCA´s negotiations can reshape the telecoms industry at large.

First, the autonomy of the telecoms regulator. Chapter 18 of the USMCA sets forth foundational principles for the governance of telecoms, including the structural independence of regulatory bodies. Article 18.17 explicitly requires that each party ensures its telecoms regulatory body is “separate from, and not accountable to, a supplier of public telecommunications services.”

For the Mexican case, this principle of independence is reinforced by a footnote addressing regulatory autonomy. Specifically, footnote 14 of Article 18.17 states that “for Mexico, the telecommunications regulatory body is autonomous from the Executive Branch of government.”

This footnote was originally framed with the IFT in mind, as a constitutionally-autonomous body. In contrast, the new CRT will operate as an “órgano desconcentrado” — an entity that remains, to some extent, under the executive branch´s authority. This shift will raise significant legal and institutional questions about whether and how the new regulator meets the autonomy requirements established under the USMCA.

Second, the asymmetrical regulation of preponderant agents that will be entrusted to both the CNA and CRT. Another key element under scrutiny will be the scope of asymmetrical regulation for major suppliers, particularly Mexican agente económico preponderante (preponderant economic agent) in telecommunications.

Article 18.1 of the USMCA defines “major suppliers” as entities that have the ability to materially affect the terms of participation in telecoms markets as a result of: i) control over essential facilities or ii) use of its market position. Again delving further into footnotes, footnote 1 clarifies that, in Mexico, a major supplier includes preponderant economic agents.

The current regulatory framework for major suppliers under the USMCA is comprehensive. It covers technical areas, such as interconnection, submarine cable systems, co-location, and the unbundling of network elements. Several domestic asymmetrical regulations issued by the IFT closely reflect these provisions.

From a regulatory development perspective, the USMCA continues to serve as a guiding framework for the IFT when issuing or amending asymmetrical regulations for the preponderant agent. The new CRT might follow this approach.

A central question then is whether new regulatory measures concerning major suppliers will be developed at the USMCA level. The potential for new asymmetrical regulatory mechanisms stemming from treaty commitments will likely be a focal point in the upcoming negotiations.

Third, competitive neutrality and state-owned participation in telecoms providers. Articles 18.18, and Chapters 21 and 22 of the USMCA, underscore the importance of competitive neutrality. Specifically, Article 18.18 provides that no party shall accord more favorable treatment to a domestic telecoms provider solely on the basis of being owned or controlled by the national government.

Following the 2024 constitutional amendments, the Mexican state will enter the telecoms market as a potential service provider. The recently enacted 2025 Federal Telecoms Law reaffirms this participation, allowing the Federal Electricity Commission (CFE) to hold a commercial master license for providing telecoms services, as outlined in Article 78 and transitory provision 31 of the law.

Although Article 79 of the new law requires that all state license-holders adhere to the principle of competitive neutrality, significant implementation challenges remain. How can regulatory mechanisms ensure neutrality not only in service provision but also in infrastructure deployment, access to spectrum bands, and other regulatory dimensions? This issue is expected to be pivotal during the USMCA review process and will likely shape future commitments on state involvement, especially in the mobile industry.

While the Ministry of Economy’s recent public call for comments emphasizes the short-term implications of the USMCA renegotiation, the long-term consequences for Mexico’s telecom industry are far more profound. The evolving institutional landscape, combined with Mexico’s international commitments, will reshape the structure, oversight, and overall attractiveness for investment.

In conclusion, foreign investment undeniably plays a central role in Mexico’s telecoms ecosystem, particularly in mobile services. Any changes resulting from the USMCA renegotiation will have significant ripple effects across the regulatory and business environment. As such, this process represents not just a treaty review, it marks a strategic inflection point for the future of telecoms in Mexico.