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Costa Rica: Regulator criticizes decision to have govt award licenses Print E-mail
Monday, 29 October 2007
Fernando Herrero, the head of Costa Rica's utilities regulator Aresep, criticized the government's decision to give responsibility for awarding telephony concessions to the environment and energy ministry (Minae).

The government plans to create an entity within Minae which will be responsible for spectrum licensing when the telecommunications market is liberalized. According to Herrero, in the original liberalization proposal, Aresep would be responsible for awarding concessions, but the PLN party changed the bill after the comptroller general said that only the government could award concessions. Herrero said it is better for one entity to be in charge of all matters to do with telecommunications, from awarding concessions to applying sanctions.

"There is a very big problem, the decision becomes politicized. It is complicated because we're talking about major interests (at stake), (million dollar) concession licenses," Herrero said.

The official also said that the utilities regulator and the proposed new telecoms regulator Sutel should be isolated from the political process as part of the telecommunications liberalization process. On October 7, Costa Rica approved the Central America and Dominican Republic free trade agreement with the US (Cafta-DR), which stipulates that the telecoms industry must be liberalized. The bill for the liberalization of the telecoms market is yet to be debated in congress.

In an October 24 press release, Aresep described a study by Costa Rican economist Gilberto Arce comparing the licensing regimes in 209 economies. Arce concluded that in the poorest countries, licenses are awarded by the government and not the regulator. Such countries included Gambia, Mozambique, Togo, Cameroon, Iran and North Korea. In the richest countries spectrum licenses are awarded by the regulator, as is the case in the UK, the US and Australia.

"International experience suggests that a technical regulator manages spectrum much better, favouring for example greater density of cellular phones (between 10% and 22% more cell phones per 100 inhabitants)," the study said.

Source: Cellular-News.com - WDR/Intelecon Regulatory News.