VZCZCXYZ0011
RR RUEHWEB

DE RUEHSJ #2037 2561844
ZNR UUUUU ZZH
R 131844Z SEP 06
FM AMEMBASSY SAN JOSE
TO RUEHC/SECSTATE WASHDC 6089
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE

UNCLAS SAN JOSE 002037 
 
SIPDIS 
 
SIPDIS 
 
STATE PASS TO USTR FOR KSCHAGRIN 
 
E.O. 12958: N/A 
TAGS: ETRDEINVECINPGOVCS
SUBJECT: ARIAS ACCEPTS FIRST RESIGNATION: TELECOM MONOPOLY GETS NEW 
BOARD PRESIDENT 
 
¶1. (U) SUMMARY. The Board President of Costa Rica's 
telecommunications monopoly, ICE, resigned on September 12 and was 
replaced almost immediately by a new head whose nomination  improves 
CAFTA ratification and implementation prospects.  Introduction of 
the long-promised telecom legislative package nonetheless will be 
delayed by a few weeks as the parastatal's leadership structure 
fully reorganizes.  END SUMMARY 
 
2.(U) President Oscar Arias has accepted the resignation of Jorge 
Gutirrez Gutirrez as head of the parastatal telecommunications 
monopoly known as ICE, which controls all telecommunications and 
electricity production and distribution in Costa Rica.  Gutirrez, a 
60 year old civil engineer and brother of Central Bank President 
Francisco de Paula Gutirrez, was appointed President of the ICE 
Board of Directors when Arias took office on May 8, 2006.  Although 
the resignation was attributed to a heart condition, it has been 
rumored for some time that President Arias was not pleased with 
Gutierrez's less than enthusiastic attitude toward CAFTA.  The 
resignation is effective September 15, 2006. 
 
¶3. (U) The resignation comes in the midst of several very stressful 
months for ICE as the administration has informally floated various 
proposals to open the telecommunications sector to competition, as 
required by CAFTA.  This past weekend the GOCR announced again that 
the telecom legislative proposals have been finalized and will be 
sent to the national legislature (the Asamblea)in approximately two 
weeks. 
 
¶4. (U) Within hours of the Gutirrez resignation, President Arias's 
Council of Ministers announced his successor, Pedro Pablo Quirss, an 
electrical engineer who began his career in the 60's with ICE and 
has worked in the telecommunications industry for 40 years.  In May 
2006 Quirss was appointed to the Board of Directors by Arias and 
subsequently was unanimously elected Vice President of the ICE Board 
by fellow directors. 
 
¶5. (U) President Arias will now have one additional appointment to 
make to the ICE Board of Directors after which the Board will select 
a new Vice President. 
 
¶6. (SBU) The Minister of Foreign Trade, Marco Vinicio Ruiz, called 
EconOff to voice his opinion that this change was a very positive 
development for CAFTA.  He said the tension on Gutirrez had been 
enormous and he simply was not up to it.  He noted that the 
designated President of the Board, Mr. Quiros had worked for AT&T in 
the U.S. and "is totally convinced about CAFTA."  He said that this 
personnel change will slow slightly the GOCR's ability send draft 
telecom legislation to the Asamblea because the Board of Directors 
of ICE must first approve it.  The Board cannot take such action 
until Arias names another board member and that person is sworn, 
which Min. Ruiz estimated would take two weeks. 
 
¶7. (U) Comment: The telecommunications reforms are considered by 
most to be the most difficult hurdle to implementing CAFTA in Costa 
Rica.  The ICE union, along with other public unions, has threatened 
a national strike for late October.  ICE leadership, especially from 
the Board President, will play an important role in the months ahead 
as the country debates telecom reforms the Arias administration is 
now characterizing as modeled after those in Northern Europe, i.e. 
"based on solidarity and competition and not at all like previous 
Latin American privatizations." 
End Comment 
 
LANGDALE