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Costa Rican Law Leaves VoIP Services Hanging

June 29, 2007

You can hear the frustration in José Ampiée’s voice when he talks about the telecom law in Costa Rica.

The country simply has no rules, he says, regarding Voice over Internet Protocol (VoIP) – a technology that allows regular phone calls to be transmitted over the Internet.

“It’s not that there’s a gap – there’s nothing,” he says.

As one of the owners of Interphone S.A., a business that installs and maintains VoIP call systems for corporate clients, the legal vacuum puts Ampiée and the owners of similar businesses in the awkward position of never quite knowing where they stand in relation to the law, simply because law regulating VoIP calls doesn’t exist.

Such a situation of uncertainty is not unusual in the history of Costa Rican telecommunications.

Starting in the 1960s, Costa Rican law has undergone a series of constitutional and legal interpretations that have left the Costa Rican Electricity Institute (ICE) and its subsidiary company Radiográfica Costarricense S.A. (RACSA) holding exclusive state concessions for electricity, phone, cell phone and Internet services, according to telecommunications lawyer Vicente Lines.

Yet there has never been a law explicitly granting the resulting “ad-hoc” monopoly on telecommunications, as Lines calls it.

“I’ve personally looked for a law (granting exclusive telecommunications concessions to ICE)… and never found it,” he said, adding that the current situation came about through “interpretations that were made from the Constitution and the laws.”

The concept of Internet phone calls is another situation for which there is no law, but everyone has an interpretation. That has thrown businesses into confusion as to where they stand.

Exacerbating the situation, ICE has taken several stabs at shutting down VoIP phone calls.

In 2001, the Government Attorney’s Office issued an opinion (advised by ICE experts) that said VoIP calls should be the provenance of ICE, but no law has ever been passed to that effect, and so the opinion remains just that.

In 2005, ICE announced it would look into either regulating or criminalizing the use of VoIP telephony, according to an ACAN-EFE report, but still, no such law has been passed.

Queried on the matter, ICE press representative Elbert Durán offered a written statement saying that many foreign VoIP service providers “aren’t aware of our legislation,” without specifying what that legislation was.

Ampiée said he thinks that with such statements, ICE is trying to create a “mythology” to frighten VoIP users and service providers.

“They’ve done a lot of grandstanding, but I don’t think they can do anything,” Lines said.

Remember Callback Services?

Still, the country has a history of trying to restrict phone calling methods that seek to circumvent the state monopoly.

In 1996, for example an ICE union filed a complaint against callback services (TT, March 22, 1996). These services allow customers to call the United States for a brief moment and enter a password, or provide it via Internet. They then receive a call back from the United States and can dial international numbers via conference call and pay lower U.S. rates. Since it is an incoming call, callback service users pay no ICE fees.

ICE has from time to time cut off the phone service of customers it suspected of using callback services, and the Constitutional Chamber of the Supreme Court (Sala IV) has ruled on several occasions that such service cuts do not violate the constitutional rights of the users.

As with callback, technically speaking it may be almost impossible to regulate VoIP technology without disrupting regular Internet service, since a VoIP signal gets mixed up with all the other stuff that goes back and forth over an Internet connection.

“It’s completely impractical for that system to be illegal,” said Evita Arguedas, a lawmaker with the Libertarian Movement and member of the Legislative Assembly’s Telecommunications Commission.

Rumors, however, persist that, as with the callback services, ICE could take its own action by disconnecting the Internet service of companies using it for VoIP purposes.

That’s why even in the absence of laws regulating VoIP technology – and the impracticality of any potential regulation – service providers and users remain wary.

Users try to keep a low profile, and Costa Rican VoIP service companies are careful to emphasize that they are providing only the equipment and service support, leaving the provision of the actual VoIP service to a foreign company such as Net2Phone.

Pressed about the legality of VoIP, business owners are cautious.

“The illegal act is when a national agency exploits any telecommunications platform for its own benefit,” said Jorge Antillón, the  owner of a service company called Ticom.

Interphone engineer Fred Martin was more direct: “(ICE) doesn’t want (VoIP) to be popular.”

 

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