In the report, obtained by Reuters from Paris sources, the organisation charged with advising the world's richest economies says Mexican authorities have failed to solve weaknesses in the law opening the sector to compe-tition.

The OECD describes as ``well-designed'' the Federal Telecommunications Law of 1995, which allows Mexican and foreign entities gradually to confront the might of privatised monopoly Telmex.

``These strengths are mitigated, however, by the fact that neither the sector-specific regulator nor the competition authority have identified the steps necessary to remedy weaknesses revealed by experience in the three years since the law has been enacted,'' it adds.

Head of Mexican telecommunications regulator Cofetel, Javier Lozano will beamong Mexican officials attending the OECD forum in Paris.Mexico privatised Telmex in 1990.

Competition was finally allowed in the long-distance market in 1997 and in local services this year, but competitors have loudly complained that Telmex has obstructed access to its vast domestic network, which competitors must use to make their services viable.

Among the principle weaknesses in the regulations, the OECD identifies the lack of a mechanism to promote investment in network infrastructure.Another weakness is loopholes in requirements and constraints placed on Telmex when it was privatised, the organisation says.

``Cofetel's ability to effectively regulate, in areas such as price regulation, is constrained because the applicability of the FTL to the (Telmex) concession has not been sufficiently clarified,'' the OECD says.``This weakness is magnified by the fact that the concession does not expire until 2026,'' it adds.

The result of the legal weakness was obvious in the failure of authorities toensure that Telmex abided by an agreement to expand telephone services, especially with regard to an objective of establishing 20 lines per 100 inhabitants by 2000, according to the OECD. Due to the weakness of the legal framework, ``Mexico's progress has been stalled,'' the OECD charges, urging the government to implement further telecommunications reforms.