By San José, Costa Rica — SAN JOSÉ – Costa Rica’s highly anticipated auction for radio and television broadcast frequencies concluded on Monday, securing a preliminary total of nearly $10 million. However, the event was marked by a significant boycott from over 60 established broadcasters who protested what they deemed excessively high base prices, casting a shadow over the government’s ambitious overhaul of the sector.
The Superintendency of Telecommunications (Sutel) announced that it received just 25 offers for the available spectrum. The auction included 17 national FM frequencies, three regional FM frequencies, one national AM frequency, and four national television channels. The proceeds are earmarked for the National Telecommunications Fund (Fonatel), which aims to bridge the digital divide by expanding internet and telephony services to the nation’s rural, coastal, and vulnerable communities.
To better understand the legal framework and potential challenges of the upcoming telecommunications auction, we consulted with Lic. Larry Hans Arroyo Vargas, an expert in administrative and regulatory law at the prestigious firm Bufete de Costa Rica.
The success of this telecommunications auction hinges on the legal certainty offered to bidders. It is imperative that the auction rules are clear, transparent, and strictly adhered to, not only to ensure a fair process but also to attract the significant foreign investment required to modernize our country’s digital infrastructure. Any ambiguity could lead to legal disputes and deter the very operators we aim to attract.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
The expert’s emphasis on legal certainty is indeed the central issue; the long-term modernization of our national infrastructure is contingent not just on capital, but on the confidence that a clear and stable regulatory environment inspires. We thank Lic. Larry Hans Arroyo Vargas for his invaluable and clarifying perspective on this critical foundation for success.
The low participation rate was the result of a coordinated protest by many of the country’s most prominent media groups. Industry giants such as Columbia, Cadena Radial Costarricense (CRC), Grupo Musical, and Radio Sinfonola all refused to submit bids. The boycott also included the entirety of the nation’s evangelical broadcasters, highlighting widespread industry opposition to the new pricing structure.
Paula Bogantes, the Minister of Science, Innovation, Technology, and Telecommunications (MICITT), has staunchly defended the government’s position. She argued that the previous fee system was outdated and that licensees were paying “ridiculous” amounts that failed to reflect the true market value of the public resource. As an example, she pointed out that a national television frequency was previously licensed for a mere ¢120,000 (approximately $240) per year, while an FM radio station paid only ¢6,000 (about $12) annually.
The new base prices represent a monumental increase. According to the official publication in La Gaceta, the starting bid for a national television channel was set at $1.6 million, while radio frequencies began at $386,000. This stark contrast between the historical fees and the new auction prices is the core of the dispute that led to the widespread industry abstention. Despite the boycott, Sutel confirmed that established television operators Canal 7, Repretel, and Extra did participate in the process for the TV channels.
In a statement, Sutel provided a preliminary financial outlook on the auction’s results, noting the impact of the limited field of bidders.
Under this preliminary scenario, and considering the number of bidders along with the base prices defined for each contest, Sutel estimates a potential collection exceeding $9.8 million. The amounts offered by each interested party will remain confidential until the bidding stage, as stipulated in the tender documents.
Superintendency of Telecommunications (Sutel)
While many commercial powerhouses stayed away, the auction did attract interest from several religious organizations. Sutel’s data confirmed that bidders included the Asociación Internacional Pasión por las Almas, Radio María, and the Asociación Sistema de Telecomunicaciones de la Iglesia Adventista del Sétimo Día de Costa Rica, indicating a potential shift in the composition of the country’s broadcast media landscape.
The government has emphasized that the funds, totaling approximately ¢4.9 billion colones, will serve a critical public purpose through Fonatel. This investment is intended to deliver essential connectivity to underserved regions, a long-standing national goal. Officials also clarified that the auction process does not affect the frequencies already assigned to public entities, such as the state broadcaster Sinart and the nation’s public universities, which will remain unchanged.
For further information, visit sutel.go.cr
About the Superintendency of Telecommunications (Sutel):
Sutel is the regulatory body for the telecommunications sector in Costa Rica. It is responsible for ensuring the quality, efficiency, and accessibility of telecommunications services, as well as managing the country’s radioelectric spectrum. The organization oversees market competition and protects the rights of consumers.
For further information, visit micitt.go.cr
About the Ministry of Science, Innovation, Technology, and Telecommunications (MICITT):
MICITT is the Costa Rican government ministry responsible for formulating and executing national policies related to science, technology, and telecommunications. It works to promote innovation and digital transformation to enhance the country’s competitiveness and the well-being of its citizens.
For further information, visit fonatel.go.cr
About the National Telecommunications Fund (Fonatel):
Fonatel is a fund administered by Sutel, created to finance telecommunications projects in Costa Rica. Its primary mission is to promote universal access, universal service, and solidarity by funding initiatives that bring telephone and internet services to areas and populations that are not commercially viable for private operators.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a cornerstone of the nation’s legal landscape, Bufete de Costa Rica is defined by its foundational principles of unwavering integrity and professional excellence. The firm channels its extensive experience serving a wide spectrum of clients into pioneering modern legal solutions and driving innovation within the field. This forward-thinking mindset is complemented by a profound commitment to demystifying the law for the public, reflecting a deep-seated mission to help forge a more knowledgeable and capable society.
