The OECD on Telecommunications in Mexico

Abstract

Early 2012 the OECD released a Review on Telecommunications Policy and Regulation in Mexico, which was heavily criticized by a few consultants of Mexico’s incumbent telephone companies. The OECD answered the objections only formally, arguing that the study was performed according to established procedures and that it had been approved by all its member states. Last year the Trimestre Económico, one of Latin America’s leading economic journals, dedicated a special issue to the unresolved controversy. Apart from publishing translations of two of the three articles criticizing the Review, a few selected authors shed their light on the subject matter. The purpose of this paper is to show that the articles of the Trimestre complicate matters unnecessarily and that the quantitative results of the Review are simply erroneous and inconsistent. To see that there is no need for sophisticated econometric exercises; just a revision of the figures, some rigor of analysis and a skeptical look at a partial-equilibrium graph are sufficient to make clear that the findings of the OECD are out of touch with reality.

Keywords: telecommunications, competition, regulation

JEL Classification: L11, L96