Correcting the OECD's Erroneous Assessment of Telecommunications Competition in Mexico
1 June 2012
By Dr. Agustin Ros with Dr. Jerry Hausman, Director of the Telecommunications Research Program at MIT
In this article, published in the June 2012 issue of Competition Policy International's CPI Antitrust Chronicle, NERA Vice President Dr. Agustin Ros and Dr. Jerry Hausman, Director of the Telecommunications Research Program at the Massachusetts Institute of Technology, argue that the conclusions of a January 2012 study of Mexico's telecommunications sector from the Organisation for Economic Co-operation and Development (OECD) were based on flawed economics. The authors' analysis, which was commissioned by America Movil, demonstrates that the OECD study was incorrect when it concluded that a lack of competition in Mexico's telecommunications sector caused a loss in consumer surplus of over $129 billion between 2005 and 2009. Specifically, Dr. Ros and Dr. Hausman show that the OECD relied on improper use of data and flawed economic analysis in calculating the $129 billion figure; correct the OECD's mistakes by comparing Mexico to a sample of "peer" countries that are similar in terms of per-capita GDP; and demonstrate that there have been significant gains in consumer surplus in Mexico, not the loss calculated by the OECD.
