High-speed internet and modern telecommunications, which could be possible with broadband frequencies, have been caught in the middle of a political fight in Mexico. And there are signs their future could linger in court battles between the government and telecommunications companies.
MVS Comunicacion, a Mexican communications company which stands to lose a profitable contract that gives it control of a concession in the 2.5GHz high frequency broadband range, is accusing the government of taking its license away because the company refused to fire one of its broadcasters, who had accused President Felipe Calderon of being a drunkard. The company also accused the Mexican government of having the intention of favouring Televisa — a Mexican media giant that controls open television in the country and recently entered the telephony business — in the upcoming open bid process for new broadband licenses. According to press reports, 11 telephony operators have licenses to operate in the 2.5GHz bandwidth. The largest operator is MVS Comunicaciones, which has 42 licenses. None of the MVS concessions were renewed.
Joaquin Vargas, chief executive of MVS said that the government decision to not renew its contract was tied to the fact the company did not fire Carmen Aristegui, a controversial radio personality that broadcasts a daily morning programme on the company’s radio station, rather than reasons to open up the frequency range to open bids. Another company executive also lambasted the government’s favouring of Televisa, which recently won a bid over IUSACELL, one of Mexico’s three cellular mobile operators, and will probably bid in the 2.5 GHz spectrum when it opens up.
Communications and Transport Minister Dionisio Perez-Jacome denied the charges of “blackmail”. He retorted that MVS was underutilising the frequency they already controlled, and were not willing to pay market value for the frequency.
Some analysts say there are indications of government favouritism. MVS has been trying to develop the spectrum they had under contract with US partners, Intel and Clearwire, but the Communications and Transport Ministry has refused to accept their design plans for the last two years.
The 190 MHz band was granted to MVS a few years ago, and the company used it for cable television. Today, the 2.5 GHz band can be used for internet and 4G telephony.
The MVS broadband project that was rejected by the Mexican government was called Broadband for Everyone, and planned to give broadband internet to larger sectors of the Mexican population. For that it had received good reviews from some researchers.
Gabriel Sosa, a telecom analyst and columnist for El Universal told reporters that it was likely that other telecommunications operators were behind the government’s decision to retake the frequency from MVS.
Mexico has the lowest wireless broadband penetration among members of the Organisation for Economic Cooperation and Development (OECD). So when the government said in August that it would end existing concessions and begin open bids as other countries are doing around the world, it seemed thoughtful. According to the OECD, low ranking in broadband penetration is often due to a weak competitive, regulatory, or policy environment. This could be happening in Mexico.
Overall, the dispute over the 2.5 GHz range will only delay the development of the spectrum, continuing to affect Mexican consumers. It is expected that the dispute will linger in tribunals for months, delaying the arrival of high spectrum connectivity to Mexico.
