Telecom Services To Increase 25% If TLC Approved, Opposition Says
The referendum on the Tratado de Libre Comercio (TLC) - free trade agreement with the United States - is still months away, however, the campaign to sway the vote has just begun.

Opposition to the TLC say that 25% of Costa Ricans will not be able to pay their telephone bills if the trade deal is approved. The argument is backed by Gerardo Fumero, an electrical engineer for the state telecom monopoly, the Instituto Costarricense de Electricidad (ICE).

Fumero said that following a study of the consequences following the opening and privatization of telecom services in Latin America, Costa Rica will be no different than the other countries.

The engineers holds firm that the trade deal with U.S. will destroy the development level achieved especially in telecommunications, edcuation, health and electrical energy.

Fumero says that the TLC will collapse the solidarity and that rates will climb to the point that those with low income will not be able to afford the services, increasing the gap between the rich and the poor.

With respect to telecommunications, the engineer says that the current cost of providing a fixed line residential telephone is us$10.35 per month, however, customers pay only us$3.75 at the moment for basic service, receiving a subsidy of us$6.60, the lower rate for fixed line telephone service in the world.

The subsidy is possible from revenue from business services, cellular service and international calls, which represents 70% of income for ICE. The trade deal will privatize those services, meaning an end to the subsidies, Fumero said.

Costa Rica is currenlyl the third country in the world with the highest level of telephone use, following the U.S., in first place, and Hong Kong, in second place.

While basic fixed line telephone service in Costa Rica costs less than us$4 per month, in Nicaragua and Panama, for example, where telecommunications is not a state monopoly, the same service costs almost us$20.

Fumero added that in Peru, for example, the average citizen has to shell out 6.5% of their salary to pay for telephone service, while in Costa Rica it is only 1%, and the reason for the high level of use.