The Future of Telecommunications Service in Latin America: What are the Challenges? What are some Proposed Solutions? Prominent Telecommunications Attorney, Eduardo Guzman, Explains.

Fiber Optic WorldEarlier this year Squire Patton Boggs hosted the International Institute of Communications’  (IIC) Telecommunications and Media Forum (TMF), which took place in Miami.  The IIC is an international non-profit organization that brings together regulators, policy-makers and industry representatives to promote open dialogue and shape the public policy agenda in the telecommunications, media and technology sector. The TMF was a two-day conference that focused on Latin America and examined the policy frameworks that can best promote infrastructure deployment, investment, and innovation for the digital economy in that region. In attendance were representatives from regulatory agencies from across Latin America; the Federal Communications Commission; the International Development Bank; other regional organizations; carriers; broadband providers; and telecom equipment manufacturers who are invested in Latin America.[1]

One of the panels at the TMF focused on digital infrastructure and the policy choices that can lead to sustained investment and innovation at the network, service and applications level. SPB partner Eduardo R. Guzmán, a member of the firm’s global Communications Group, participated as a panelist in that discussion. He focused his remarks on the state of wireless network infrastructure in Latin America and the need for reforms to lower the costs of deploying the infrastructure that Latin American providers will need to expand coverage and set the table for 5G networks. Below is a Q&A with Eduardo that summarizes the key points he made at the TMF on this critical issue for the evolution and expansion of telecommunications service in Latin America.

Why is discussing barriers to wireless infrastructure deployment critical in Latin America?

Because wireless networks will be they key drivers of broadband deployment in Latin America. Mobile devices connected to wireless networks already are by far the preferred mode of access to the Internet in the region, and smartphone adoption is only expected to increase that trend. At the same time, Latin America still faces significant challenges when it comes to extending connectivity in rural and remote areas, and 4G adoption and coverage are still lagging behind when viewed in terms of total usage, coverage or in comparison to smartphone adoption rates (which are steadily increasing in Latin America). And stagnant average revenue per user and real limitations at the customer base level to pay for premium services has historically affected investment in the region and is likely to delay the rollout and adoption of 5G. In this climate, reducing the costs of infrastructure deployment is critical and needs to be discussed more broadly.

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Mexican President-Elect Lopez Obrador and Possible Impacts to the U.S.-Mexico Bilateral Relationship

Successful LeaderThe left-leaning 64-year old Andres Manuel Lopez Obrador “known as AMLO,” who represents the MORENA Party, won the Mexican presidential election on July 1, 2018. This victory comes after two unsuccessful presidential campaigns in 2006 and 2012. AMLO’s pledge to end corruption, reduce violence and decrease poverty resonated this time with Mexican voters. He will be sworn-in on December 1, 2018.

AMLO will be taking the helm of a country with a weakened economy facing slow growth, amid ongoing security issues. One of his primary challenges will be persuading foreign investors to continue investing in Mexico. To do this, he will need to foster an attractive business environment and yet balance any abrupt changes to the current economic policy.  Mexico’s energy reform policies, if sustained, will continue to be a beacon for foreign investments in the oil and gas sector.

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Polarized Colombia Elects a New President

Voting in ColombiaLike the United States, Colombia has similarly become very polarized over the past few years. Simply put, this dichotomy involves (1) those who support the former two-term President, and now senator, Álvaro Uribe Vélez (“Uribe”) and his political polices, and (2) those who do not support him or his policies. Colombia’s newest President-elect, Iván Duque (“Duque”), falls in the Uribe camp.

By way of background, Uribe’s supporters are characterized as right wing conservatives and are primarily concentrated in the City of Medellin in the department of Antioquia. “Uribismo”, as the term has become known, refers to these supporters of Uribe, his administration and his policies, and is what led to the founding of the political party “Centro Democratico” in 2013. The Centro Democratico party, despite its newness, is now the strongest party in Colombian politics. It holds the majority of seats in the Senate and a high number of the seats in Congress. The non-supporters of Uribe includes people characterized as being on the hard left (liberals) or centrists that are supporters of former president Juan Manuel Santos (“Santos”). These individuals are primarily found in the Capital City of Bogotá, which is Colombia’s most liberal city, as well as in some of the poorest regions of the country.

Colombia’s polarization became most evident during Santos’ negotiation of the peace agreement and peaked when the peace agreement was put to a popular vote. Most were expecting a resounding “yes,” only to be taken back when the “no” vote prevailed. The “no” movement was led primarily by Uribe, who criticized the agreement as being too lenient and generous to the FARC. Although a slightly modified version of the peace agreement with the FARC guerilla group still went forward despite the popular vote, the criticism of the peace agreement and efforts to undo some parts of it, continued. One of person who advocated for rolling back some of the more lenient provisions of the agreement was Duque, who on Sunday, June 17, 2018 was elected Colombia’s new president with 54% of the vote.

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Mexico Hits Back Against U.S. Steel and Aluminum Tariffs

Mexico/US TariffThe Mexican Government announced a series of retaliatory tariffs on a diverse group of U.S. products in reaction to tariffs imposed by the United States on imports of steel and aluminum.

The response from Mexico comes after more than a year of developments in the bilateral trade relationship.  In April 2017, the Trump Administration self-initiated two separate investigations under Section 232 of the Trade Expansion Act of 1962, on the grounds that imports of steel and aluminum pose a threat to U.S. national security.  This resulted in the Department of Commerce finding that the quantities and circumstances of steel and aluminum imports “threaten to impair the national security,” as defined by Section 232.

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Mexico’s Anticorruption Legislation: New Compliance Program Requirements (PART 3)

ComplianceMinimizing Risks

In our two previous posts, we discussed the general outline of the Mexican National Anticorruption System, and highlighted some aspects of the General Law of Administrative Responsibility and the Federal Criminal Code that affect legal entities. We now turn our attention to what these laws refer to as an “Integrity Policy” and the ways entities can avoid, limit or minimize liability.

Burden and Standard of Proof

Under both the Federal Criminal Code and the General Law of Administrative Responsibility, there is a presumption of innocence, and the burden of proof rests with the government. Mexican procedural rules generally do not define different standards of proof applicable to determine liability in criminal, administrative and civil cases. That is, while Mexican law is clear that the burden of proving liability rests with the government, it makes no distinction between civil, administrative and criminal standards of proof.[1]

Exclusion of Liability

When we discussed corporate liability, we noted that under the National Code of Criminal Procedure failure to have or follow internal controls is required for a finding of liability. Similarly, the Federal Criminal Code reduces the applicable penalty if the entity has an internal compliance body that helps mitigate damages. Finally, the General Law of Administrative Responsibility establishes that a legal entity’s Integrity Policy (i.e. Compliance Program) “will be taken into consideration” to determine a company’s liability. While the criminal and procedural codes do not establish what internal controls are required or detail the characteristics of a “dedicated compliance body”, the General Law of Administrative Responsibility does.

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Mexico’s Federal Criminal Code and the new General Law of Administrative Responsibility (PART 2)

Mexican Gavel & Law Book

On our previous blog post we provided the general outline and background behind Mexico’s National Anticorruption System. On this post, we will go further into the weeds of both the 2016 amendments to the Federal Criminal Code and the compliance provisions of the General Law of Administrative Responsibility as these laws apply to legal entities. Although these amendments are generally discussed separately, we believe that these laws, as amended, complement each other and the provision of one can help understand the other. This bifurcated enforcement is in some ways similar to how the FCPA is enforced by the DOJ and the SEC in the U.S. (i.e. through separate but complementary criminal and civil/administrative actions).

With this in mind, we turn our attention to how these laws impact legal entities.

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Mexico’s Anticorruption Legislation and its Impact (PART 1)

Washing Mexican Flag

Beginning in 2015, Mexico has been promulgating sweeping anticorruption legislation. Mexico first laid the groundwork with amendments to the Federal Constitution that created the National Anticorruption System. Then in 2016, Congress passed the National Anticorruption System’s implementing legislation through a series of new laws and important amendments to existing ones.

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Western Hemisphere – An Evolving U.S. Policy

Earth Night LightsDuring his trip to the Western Hemisphere in early February 2018 – which included stops in Mexico City, Mexico; San Carlos Bariloche and Buenos Aires, Argentina; Lima, Peru; Bogotá, Colombia; and Kingston, Jamaica – U.S. Secretary of State Rex Tillerson stressed the continued importance of the region to the United States. In a speech that he made in Texas before travelling south, Secretary Tillerson highlighted the benefits of increased hemispheric energy trade, which may be the lens through which the Trump Administration views its policy for the Western Hemisphere:

“Building greater prosperity by integrating the wealth of energy resources within the hemisphere is an opportunity that is unique in the world to the Americas.”

Secretary Tillerson further stressed: “By 2040, North America is expected to add more oil production to the global markets than the entire rest of the world combined and more gas production than any other single region. … Our continent has become the energy force for this century, thanks in large part to rapid expansion in natural gas and tight oil production.”   He also called for opening energy market economies in the hemisphere, saying:

“Between now and 2030, Latin America is expected to spend at least $70 billion on new electric power generation plants to fuel economic growth. … By building out a more flexible and robust energy system in our hemisphere, we can power our economies with affordable energy. … And we can make our hemisphere the undisputed seat of global energy supply.”

Energy, however, is not the only driver for improved circumstances in the Western Hemisphere, as Secretary Tillerson advocated for more market-based economies in general. He spotlighted Argentina’s recent reforms, including its own tax overhaul, as opening the Argentine economy, driving down the high inflation rate, and attracting investments. The Secretary recognized that economic development and security are not mutually exclusive.

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Protection of personal data in the EU and Mexico

Data ProtectionProtecting the personal data of individuals has become a major concern worldwide. As a result, several countries have adopted new regulations that aim to provide or enhance such protection. Here, we will briefly present some of the most relevant features of the data protection regulations recently adopted by the European Union (“EU”) and Mexico, two important business partners to the United States.

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Costa Rica Elections: Populism vs. Establishment

Costa Rican Ballot BoxThere were 13 candidates in the running for the presidency in Costa Rica until last Sunday, when Costa Ricans narrowed the pool two candidates. Among the 13 presidential candidates were several lawyers who are also politicians, including:

  • Antonio Álvarez (National Liberation Party) – Lawyer, businessman and veteran legislator who twice served as President of the Costa Rican Legislative Assembly (1995-1996; 2016-2017). As a lawmaker, he is known for having promoted legislation against sexual harassment, domestic violence, smoking, and protecting people with disabilities.
  • Juan Diego Castro (National Integration) – A defense lawyer by profession, Castro served as Minister of Public Safety (1994-1997) and later Minister of Justice (1996-1997). Castro positioned himself as an anti-establishment and anti-corruption candidate.
  • Rodolfo Piza (Social Christian Unity Party) – A lawyer, former justice of the Costa Rican Supreme Court (2009-2013), and Executive President of the Costa Rican Department of Social Security (1998-2002), Piza was the candidate of the Social Christian Unity Party.
  • Otto Guevara (Libertarian Movement Party) – Lawyer, professor, and founder of the Libertarian Movement Party. He previously served in the legislature between 1998-2002 and again since 2014.

None of the aforementioned, however, remain in the presidential race. Last Sunday, a quarter of Costa Ricans that went to the polling booths voted for Fabricio Alvarado, a non-politician who is a former television anchor and influential evangelical singer. Another 22% voted for Carlos Alvarado, a politician who previously served as Minister of Labor and Social Security (2016-2017) and secured the nomination of the Citizens’ Action Party, which is the political party of outgoing Costa Rican President Luis Guillermo Solís.

Fabricio Alvarado’s rise in the polls is largely attributed to his campaign rhetoric against an Inter-American Court of Human Rights (IACHR) advisory opinion that notes member states “must recognize and guarantee all the rights that are derived from a family bond between people of the same sex.”[1] His meteoric rise appears to have tapped a dormant wellspring of conservatism among Costa Rica’s voters that heeded the call to defend the country’s sovereignty against external foreign tribunal decisions.

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