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Publication of the Provisions to allow Telecommunications Service Providers access to facilities and rights of way of the National Electric System

On October 29, 2018, the General Administrative Provisions were published in the Mexican Official Gazette to allow Telecommunications Industry Service Providers access to facilities and rights of way of the National Electric System (“Provisions”).

The objective of these Provisions is for Telecommunications Service Providers (“PST”) to have access to more than 11 million Federal Electricity Commission (“CFE”) poles and National Electric System (“SEN”) rights-of-way, which will stimulate competition, modernize and encourage the use of new technologies.

This will be possible because the CFE has a supporting infrastructure in urban and rural areas of the country, which are able to reach 98% of the population. As a result, the coverage of telecommunications services will be extended through the CFE’s electricity distribution network (“Network”).

The area of opportunity of these Provisions is to improve infrastructure sharing practices, since it reduces development costs and leads to a better price for end consumers.

In order to grant access to the facilities and rights of way of the SEN, the Access Providers (“Provider”) shall process the requests through the order of priority with which they were received through the Electronic Management System (“SEG”), an electronic platform developed by each Provider in which it will receive, process, register and respond to the requests for access to the facilities and rights of way of the SEN. In the event that there is insufficient access capacity for applicants, the Provider shall give alternatives such as building additional infrastructure or conducting an auction-type award mechanism. Therefore, these new provisions allow PSTs to enter into a contract directly with Providers and the current procedure based on the un-objective and functional guidelines developed by the CFE is eliminated. This means that the requirements, rights and obligations are clearer and provide greater legal certainty for PSTs.

The PST that have a contract in force at the entry into force of these Provisions and have infrastructure installed in the Network, shall cover an annual economic remuneration to the Provider of $100.84 MX per post, as long as the infrastructure used for the provision of the service exceeds the weight limit established corresponding to 250 kg/km. In addition, they may retain the additional weight for a period of up to 10 years.

As for the calculation of the fair remuneration for the deployment of infrastructure and equipment according to the Provisions for the PST, this will be $6.544 MX per kilogram. These calculations are based on mathematical formulas, also, it will be necessary to pay the cost of the access study, which will be $100.02 MX per post for each PST and is charged for one time. This encourages companies to adopt lighter technologies, because the lighter the infrastructure, the less they pay.

As established in the Fifth Agreement of the Provisions, they will enter into force on January 1, 2019.

Source consulted: Energy Regulatory Commission

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