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### Viewing cable 10SANJOSE102, Costa Rica's Spectrum Auction

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
10SANJOSE102 | 2010-01-20 23:11 | 2011-03-21 16:04 | UNCLASSIFIED | Embassy San Jose

`

    VZCZCXYZ0026
    RR RUEHWEB

    DE RUEHSJ #0102 0202322
    ZNR UUUUU ZZH
    R 202322Z JAN 10
    FM AMEMBASSY SAN JOSE
    TO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
    RUEHC/SECSTATE WASHDC 0278
    INFO RUEHSJ/AMEMBASSY SAN JOSE

` `

    UNCLAS SAN JOSE 000102

    SIPDIS
    DEPT FOR OFFICE OF INVESTMENT AFFAIRS-EB/IFD/OIA WHAT/CEN
    (JENNIFER VANTRUMP)
    PASS TO USTR

    E.O. 12958: N/A
    TAGS: ECON ECPS BTIO CS
    SUBJECT: Costa Rica's Spectrum Auction

    ¶1. (U) Costa Rica's telecom regulator, SUTEL, held a public meeting
    January 18th to announce the schedule and conditions under which
    the cellular phone market will be opened to competition. The method
    of choice will be a "hybrid" auction in which competitors must
    first demonstrate their qualifications and present their technical
    proposals. Then the qualifiers bid against each other for the
    cellular spectrum. Only companies that have operated in multiple
    countries and managed networks of similar size and complexity to
    Costa Rica's network will qualify. The published schedule starts
    with SUTEL's presentation of the auction announcement February 5,
    followed by reception and examination of the companies' technical
    proposals on March 19, opening of the bids on April 16th, delivery
    of SUTEL's recommendation to the Executive April 20, and signature
    of the concession contracts three days before the end of the Arias
    Administration on May 5. If all goes as planned, the new cell phone
    competitors would begin operating in the market in late 2010.

    ¶2. (SBU) Despite the formal nature of the announcement, we
    anticipate some problems going forward. The manner in which the
    schedule has been compressed in order for contracts to be signed by
    the outgoing Administration raises some concern that the process is
    too hurried. One specific issue that has not yet been
    satisfactorily resolved is designation and use of the microwave
    frequencies that are used to transmit signals from each individual
    radio tower to trunk lines. Those microwave frequencies are
    partially occupied by ICE and television operators and are not a
    part of the bid package. The President of the SUTEL board George
    Miley stated that, at some point after the May 5 contract
    signature, the GOCR will ensure that the winners of the cellular
    licenses are given sufficient transmission capacity over microwave
    frequencies. The frequencies will be made available on a
    non-exclusive basis to the auction winners through a process known
    as "direct concession".

    ¶3. (SBU) The Administration's non-competitive assignation of
    microwave frequency on a non-exclusive basis will create
    uncertainty among prospective spectrum bidders.  As one observer
    told us with some hyperbole, building a cell-phone network without
    guaranteed microwave transmission capacity is "like building a
    highway without bridges."   We expect Vice Minister of
    Telecommunications Hannia Vega to address aspects of this issue in
    the near future, but any modification to the plan outlined above
    would likely require more time and upset the Administration's
    schedule.
    BRENNAN

`