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Zero Rate: Mexico’s Supreme Court of Justice resolution SCJN

On its August 26, 2017 session, the justices of the Second Chamber of Mexico’s

Supreme Court of Justice (Suprema Corte de Justicia de la Nación – “SCJN”) unanimously voted in favor of Radiomóvil Dipsa, S.A. de C.V. (“Telcel”) in the writ of amparo number 1100/2015, and against the prohibition to charge other telecommunications service providers for terminating calls on its network, also known as zero rate.

The justices of the Second Chamber of the SCJN resolved to grant the writ of amparo in favor of Telcel against of article 131 of the Federal Telecommunications and Broadcasting Law (Ley Federal de Telecomunicaciones y Radiodifusión – “LFTR”). In general, the effects of the writ of amparo resolution are the following:

a) Article 131 of the LFTR is declared unconstitutional, considering that it cannot apply to a person other than Telcel.

b) The effects of the amparo will take place strating from 2018; that is to say, zero rate will continue to apply in 2017.

c) The Federal Institute of Telecommunications (Instituto Federal de Telecomunicaciones – “IFT”) will determine the asymmetric regulation related to the interconnection fees for the traffic termination in Telcel’s network, as a preponderant economic agent.

d) The telecommunication services concessionaires that have signed interconnection agreements with Telcel can’t be forced to pay interconnection rates prior to 2018, meaning the effects of the amparo will not be retroactive.

Therefore, IFT will have the powers to define the interconnection rates.

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