As of November 7 Panama's Internet service providers were required to block access to 24 User Data Protocols, many of which were used for Internet telephone calling but some of which also were used for business data transmission. The ban came by way of a decree by the Public Services Regulating Board, which acted to enforce a monopoly arguably held until the end of the year by the UK-based Cable & Wireless (C&W) telephone company. At the time that the Panamanian government and C&W signed their contract, Internet phones were not considered but the company got a monopoly on international and national long-distance telephony through the end of this year.

The board, however, is issuing licenses for Internet calling and so may limit the service even after C&W loses its monopoly. Still, the competition that begins early next year will most likely thwart any attempt to charge for Internet calling on the same basis as regular telephony.

Basically the move has driven up the price of phone calls, at least through the end of this year. It has prompted a storm of email protests, of which The Panama News has received more than 300. See our Letters and Spanish-language Opiniones sections for examples of these.

What the protesters may not be aware of in their fury against the board and C&W, is that critical negotiations that will have a bigger impact on their telecommunications budget are underway. C&W Panama, whose chief executive is a cousin of his counterpart of the obscure Galaxy Communications Corporation, is attempting to negotiate an interconnection agreement with Galaxy, which the board would then impose as the requirement for other phone companies that enter the post-monopoly market in January. A contract that is ruinous to Galaxy would then keep other companies from offering truly competitive phone services. The Panamanian Supreme Court has held that just because someone is paying for a government action or decision does not give that person an interest in knowing about it, and thus the board has kept the details of the interconnection negotiations secret. However, several of the companies that want to compete have denounced the process as anti-competitive.

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