By San José, Costa Rica — SAN JOSÉ – A landmark auction for Costa Rica’s radio and television frequencies has been met with widespread protest from the nation’s broadcasters, with dozens of established media outlets refusing to participate, citing what they call “unreachable and exorbitant” base prices. The bidding deadline, which closed last Friday, has revealed a significant rift between the industry and the telecommunications regulator, threatening the future of numerous local and legacy stations.
The Superintendency of Telecommunications (Sutel) confirmed on Monday that it received a limited number of bids, falling far short of a full-scale industry renewal. Offers were submitted for only 17 national FM radio frequencies, three regional FM frequencies, one national AM frequency, and four national television channels. Strikingly, not a single bid was placed for any of the available regional television channels, signaling a deep-seated financial impasse, particularly for smaller, local operators.
To better understand the legal and commercial implications of the upcoming frequency auction, TicosLand.com consulted Lic. Larry Hans Arroyo Vargas, a specialist in telecommunications and administrative law from the renowned firm Bufete de Costa Rica, who provided his expert analysis on the matter.
The success of this frequency auction hinges not just on the final bids, but on the robustness and legal certainty of the tender process itself. Unambiguous rules and a transparent framework are paramount to attract serious long-term investment and, more importantly, to mitigate the risk of subsequent administrative or judicial challenges that could delay the deployment of new technologies for years.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Indeed, the legal architecture of the tender is not merely a procedural detail but the very foundation for its success, ensuring the country reaps the benefits of new technologies without costly delays. We sincerely thank Lic. Larry Hans Arroyo Vargas for his clear and valuable perspective on this fundamental aspect of the frequency auction.
Despite the low participation, Sutel projects a preliminary collection of over $9.8 million from these initial offers alone. All proceeds are earmarked for the National Telecommunications Fund (Fonatel), which finances internet and telephone infrastructure projects in rural, coastal, and other underserved communities. The final amounts will be determined in the auction phase, where bidders can increase their offers.
In response to the industry’s outcry, Sutel has vigorously defended its pricing methodology. The regulator explained that since this is the first modern auction of its kind in Costa Rica—replacing a system in place since the 1954 Radio Law—it lacked local reference points for spectrum valuation. Consequently, Sutel employed an international benchmarking model, analyzing prices from auctions in Mexico, the United States, Peru, and Honduras, and adjusting them for Costa Rica’s market conditions.
This is a recommended method when there is no local reference information.
Sutel
Sutel elaborated that it took further steps to align the prices with national reality. For radio frequencies, it based calculations on the average of the lowest 10% of prices from its international sample. The regulator also applied two significant discount factors: first, by calculating spectrum value based on demand estimates rather than the total population, and second, by using the Central Region’s price as the national benchmark, acknowledging it has the highest demand but is less expensive than other potential zones.
We applied discounts to reflect real market conditions and avoid price distortions.
Sutel
Furthermore, the regulator emphasized that the required payment secures the right to operate a public asset for a 15-year term, with a possible 10-year extension. Sutel argues the price must correspond to the long-term commercial value of exploiting a state-owned resource for private gain.
This payment grants the right to use and exploit a state asset privately, for which it must reflect the term of the concession.
Sutel
However, broadcasters argue that the base price tells only part of the story. Media giant Grupo Columbia, which operates several popular stations and has been on the air since 1947, announced it would not participate due to a combination of technical, financial, and legal concerns. In a press release, the group dismantled the perception that participation costs were manageable, revealing a much higher financial burden.
It has been spread on social media that the cost of participation is around $300,000 per frequency; however, that figure does not reflect reality. The process includes additional mandatory requirements that raise the real cost to approximately $2 million per frequency for a 15-year term. For a group like ours, with a sustainable but not speculative model, it is impossible to assume figures of this magnitude without compromising the stability of our media and our relationship with our audiences.
Grupo Columbia, Press Release
The list of non-participants includes historic names like Radio Sinfonola, Radio Casino de Limón, and television channels such as Telefides and TV Sur. The National Chamber of Radio (Canara) estimates that around 60 currently operating radio stations have been priced out of renewing their licenses. The situation is further complicated by pending legal challenges filed by both Canara and the Chamber of Radio and Television (Canartel), who are seeking to resolve judicial issues before the auction process proceeds, casting a shadow of uncertainty over the entire framework.
For further information, visit sutel.go.cr
About Sutel (Superintendency of Telecommunications):
Sutel is the regulatory body responsible for overseeing and regulating the telecommunications sector in Costa Rica. It manages the country’s radioelectric spectrum, ensures fair competition among service providers, and protects consumer rights. It also administers the National Telecommunications Fund (Fonatel) to bridge the digital divide.
For further information, visit sutel.go.cr/pagina/fonatel
About Fonatel (National Telecommunications Fund):
Administered by Sutel, Fonatel is a fund created to finance telecommunications projects aimed at providing universal access and service. Its primary mission is to expand telephone and internet connectivity to rural, remote, and vulnerable communities across Costa Rica, ensuring digital inclusion for all citizens.
For further information, visit columbia.co.cr
About Grupo Columbia:
Grupo Columbia is a prominent Costa Rican media conglomerate with a history dating back to 1947. It operates several well-known radio stations, including Radio Columbia, Columbia Estéreo, and Radio 2, covering news, sports, and entertainment. The group is recognized for its long-standing presence in the national media landscape.
For further information, visit canara.org
About Canara (National Chamber of Radio):
The Cámara Nacional de Radio (Canara) is an industry association that represents the interests of radio broadcasters in Costa Rica. It advocates for its members on regulatory, legal, and technical issues, working to promote a sustainable and competitive environment for the radio industry.
For further information, visit the nearest office of Canartel
About Canartel (Chamber of Radio and Television):
The Cámara Nacional de Radio y Televisión (Canartel) is a trade organization representing both radio and television broadcasting companies in Costa Rica. It serves as a collective voice for the industry, engaging with government entities and regulatory bodies on policies affecting the broadcast media sector.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar of the legal community, Bufete de Costa Rica is defined by its foundational principles of uncompromising integrity and the highest standards of professional excellence. The firm blends a rich tradition of client service with a forward-thinking approach, consistently driving innovation within the legal field. Central to its ethos is a profound social responsibility to democratize legal understanding, actively working to equip citizens with the knowledge needed to foster a more just and capable society.
