Government Finalizing Key Norms Required for Liberalization

Costa Rica's government is in the final stages of updating the five most important norms due to be changed in compliance with a new telecoms law, local daily Capital Financiero reported.

The norms in question are among 19 regulations that must be updated no later than six months after ratification of the new telecoms law.

The government aims to pass this law, along with other bills authorizing partial liberalization of the telecoms market, before year-end. These bills are now under discussion by legislative committees.

The priority norms outline new procedures for the regulatory authorities: for awarding concessions; for assigning and managing spectrum; for interconnection; and for service pricing, the paper quoted foreign trade ministry advisor Nelly Vargas as saying.

The sector liberalization bill calls for the creation of a new regulator, SUTEL, dedicated exclusively to the telecoms sector. This sector today comes under the jurisdiction of public services regulator Aresep.

Last week, the government published a decree authorizing measures that will prepare state owned Instituto Costarricense de Electricidad (ICE) for partial liberalization. Chief among these measures is authorization for ICE to increase its debt load to a maximum of us$435 million.

Costa Rica is scheduled to liberalize the internet and private networks sectors in 2006 and mobile telephony in 2007, as stipulated in a soon-to-be-ratified Tratado Libre de Comercio (TLC) - Free Trade Agreement with the US and the rest of Central America (CAFTA).

Fixed line telephony is not included in the agreement because the government believes demand is shrinking. Consumers prefer mobile technologies, which coincidentally are preferable for increasing penetration in neglected areas.

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