VZCZCXRO3520
PP RUEHCD RUEHGD RUEHHO RUEHMC RUEHNG RUEHNL RUEHRD RUEHRS RUEHTM
DE RUEHME #2680 2541420
ZNR UUUUU ZZH
P 111420Z SEP 09
FM AMEMBASSY MEXICO
TO RUEHC/SECSTATE WASHDC PRIORITY 8194
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY
RUEAFCC/FCC WASHINGTON DC PRIORITY
INFO RUEHXC/ALL US CONSULATES IN MEXICO COLLECTIVE

UNCLAS MEXICO 002680 
 
SIPDIS 
SENSITIVE 
 
STATE FOR WHA/MEX AND EEB/CIP 
STATE PASS TO FCC (TALAGA, O'BRIEN, GIUSTI) 
STATE PASS TO USTR (HINCKLEY, PIETAN, MELLE) 
 
E.O. 12958: N/A 
TAGS: ECON ECPS EINT ETRD MX
SUBJECT: TELECOM COOPERATION AND TELMEX 
 
¶1. (SBU) SUMMARY:  Hector Osuna, President of Mexico's Federal 
Telecommunications Commission (COFETEL), emphasized U.S.-Mexico 
telecom cooperation in an 8 September meeting with Econoff.  He 
judged that initiatives on borderless calling, mutual recognition of 
telecom equipment (CITEL MRA), and spectrum auction software would 
move forward if pushed by the USG.  On the domestic front, he stated 
that Telmex's entrance into television would depend on the company's 
compliance with COFETEL directives to reduce interconnection rates. 
END SUMMARY. 
 
CROSS-BORDER LOCAL CALLING AREAS 
-------------------------------- 
 
¶2. (SBU) A former Partido Accion Nacional Mayor of Tijuana and 
Senator for Baja California, Osuna is notably focused on border 
initiatives.  He believes conditions that prevented signature of a 
bilateral borderless calling plan in summer 2008 have shifted in the 
proposal's favor.  Borderless calling would create international 
local service areas between border city pairs, resulting in lower 
prices for callers.  His read of the changing winds is that: 1) 
newly-stable leadership at the Secretariat of Communications and 
Transportation enables the Secretariat to re-focus on the 
initiative; 2) Telmex, whose opposition derailed negotiations, 
claims to have dropped its objections; and 3) lower call tariffs for 
families divided by the frontier is a ready sell to Mexican 
political parties. 
 
CITEL MRA 
--------- 
 
¶3. (SBU) Osuna admitted Mexico had room for progress in implementing 
the Inter-American Mutual Recognition Agreement for Conformity 
Assessment of Telecommunications Equipment signed in 1999.  He said 
lack of movement by Mexico was not indicative of a lack of will to 
comply.  Rather, this was a manifestation of the lack of personnel 
dedicated to the issue.  He felt the lead belonged to the 
Secretariat of Economia and suggested Economia convene an 
interagency group with COFETEL and Secretariat of Foreign Relations 
members to tackle the issue jointly with USG counterparts. 
 
SPECTRUM AUCTIONS 
----------------- 
 
¶4. (SBU) COFETEL continues its work to ready three spectrum auctions 
for mobile operator concessions, in the 1.7, 1.9, and 3.4 GHz bands. 
 Of these, planning is most advanced for 1.7 and 1.9 (Advanced 
Wireless Services); COFETEL has set aside 40 MHz in 1.7 for a new 
entrant and hopes U.S. firms will participate.  Osuna said he would 
publish the official call for bidders, including auction dates, 
within two weeks.  He also said COFETEL was ready to buy 
U.S.-recommended spectrum auction software and that he would likely 
travel to Washington in late September with the software on his 
agenda.  The sale has faced delay due to funding uncertainty since 
¶2008. 
 
NEGOTIATING WITH TELMEX 
----------------------- 
 
¶5. (SBU) Recent COFETEL efforts to reduce interconnection rates and 
increase competition have as usual run into resistance from Telmex. 
Rather than filing legal stays against COFETEL's consolidation of 
local calling areas, Telmex is simply not complying with the 
directive.  The company's lawyers are preparing to challenge the May 
determination under the Technical Interconnection and 
Interoperability Plan that Telmex has asymmetrical obligations as 
the operator with the greatest number of access paths.  Osuna 
remarked that the harder Telmex fought COFETEL efforts to establish 
reasonable interconnection rates, the longer Telmex's application to 
offer TV services would languish. (NOTE: As convergence drives TV 
duopolist Televisa closer to entering the voice and data markets, 
Telmex sees provision of video as key to its fixed line future.  END 
NOTE.) 
 
¶6. (SBU) COMMENT:  Encouraging words on Mexican telecom do not 
always translate into action, but Osuna is clearly open to a 
cooperative agenda.  He and Commissioner Rafael del Villar, often 
depicted as rivals within COFETEL, agree borderless calling is ready 
for a new look.  Undersecretary for Communications Gabriela 
Hernandez, the other pole of telecom regulatory power, also knows 
the near-deal well from her previous post as director general for 
telecom policy.  If Telmex's objections have weakened as Osuna 
believes -- in particular if the firm accepts the USG and GOM 
argument that increased call volumes will offset reductions to call 
tariffs -- borderless calling might be within reach.  END COMMENT. 
 
PASCUAL