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August 14th, 2009
For a long time, the Instituto Costarricense de Electricidad (ICE and pronounced EEEE-SAY) has enjoyed a monopoly on a wide variety of services. The two biggies are communications (cell and home phone service) and Internet connectivity. The end began with the passage and ratification of the Central America Free Trade Agreement (CAFTA) then last year the Ley General de Telecommunicaciones broke monopoly on telephone and internet services in Costa Rica enjoyed by ICE.
A lot of people think that now there will be wholesale changes now that ICE will face competition. I am not so sure… at least in the short term. Let’s examine what has been happening. If this topic interests you, read on!
First, ICE states that it will close or at least restructure Radiográfica Costarricense (RACSA), its 245 employees, and move all those Internet customers from Racsa, its wholly owned subsidiary, to its own network, affecting maybe 80.000 users. RACSA customers would therefore be serviced by ICE and the rates would be unified. Sound easy? Nothing is so easy in Costa Rica. Two issues here… and this gets a little screwy, so take notes! Remember that RACSA, while owned by ICE, runs its own show. RACSA customer service and in fact their overall service has been improving over the past several years to the point where I now tell people they are quite good! RACSA also sells only Internet services (high speed and modem) but not communications.
ICE, however, is renowned for just terrible customer service and doing everything even remotely possible to inconvenience the customer base. This is something that should not surprise anyone as most monopolies never have to compete and therefore do not have to deal with the concept of making the customer happy. Further, the technicians at RACSA are clearly more knowledgeable, or perhaps they are more accessible. Hard to tell… but either way, they solve issues whereas ICE techs often blame the problem on you or deny there is a problem.
OK… so with the existing structure, RACSA can re-sell Internet service (i.e. wholesale it) and they do. Two of their customers are Cabletica and Amnet both distributors of cable TV services. Both of those companies sell cable TV with optional Internet (cable modem Internet). You can buy cable TV with no Internet connectivity, but you can not buy Internet service from them without buying the cable TV service as well.
Now when ICE restructures RACSA, Amnet and CableTica customers will be moved to ICE. ICE though, does not sell cable services so far as I know… so that means if I am getting this correctly, AMNET and CableTica customers will have to all have new DSL installs, new equipment, etc. UGH! This will effectively put Amnet and CableTica out of the Internet business. Why do we (or at least I) care? Because CableTica has hands down the best customer services of all the companies in my opinion. Those businesses using cable modem service from either company may therefore have some serious issues ahead of them. But…. now we have this:
THIS week, Amnet has announced they will cut the umbilical with RACSA and sell Internet services directly. How? They must, of course, buy services and connectivity directly from ICE and must also arrange to connect to the two underwater international cables in Parrita and Limon that connect to the Internet backbone.
Sounds simple… huh? Oh, did I forget to mention that Amnet also announced that they will compete with ICE for the cell phone business in Costa Rica? Amnet was purchased last year by cellular service provider Millicom International Cellular, S.A. . Gee! I wonder if ICE is happy about that! I betcha not!
Nothing so far from CableTica.
So why am I writing all this? Well for those of you old enough to remember, once upon a time in the giant country to the North, there was a pretty GOOD communications monopoly called American Telephone and Telegraph (AT&T). Their service was just about as good as you an get anywhere.
Well one day, the mean old US government said, “NO MORE MONOPOLIES” and broke apart AT&T. The problem was that AT&T owned all the land, all the infrastructure, all the wiring, all the central offices… well you get the point. Startup company MCI just did not open the doors. AT&T made life VERY difficult with major issues as regarded setting wholesale rates to providing access to all the above infrastructure. On the surface, they seemed cheerful enough about having the competition… but that was on the surface. It took years and a zillion law suits and more zillions or dollars before MCI truly entered the US communications market.
ICE has kind made it clear they have no plans to go peacefully into the night…. so I asked myself, “I wonder who in Costa Rica owns all the land, all the infrastructure, all the wiring, all the central offices, routers, contracts with backbone providers….”. Things that make you go… hmmmm.
I have no idea how communiations and Internet services in Costa Rica will be affected. Maybe everyone will just get along and overall, services and customer support will reign supreme with many happy and properous companies each providing these better services at lower prices. Or not….? Comment welcome~!Filed under CableTica, CAFTA, Cell Phones, Communications, Costa Rica, Costa Rica Law, ICE, Internet, RACSA, Technical Stuff | Comments (22)