"the network is the computer, the computer is the brain." The Anarchives Volume 3 Issue 8 The Anarchives Published By The Anarchives The Anarchy Organization The Anarchives tao@lglobal.com Send your e-mail address to get on the list Spread The Word Pass This On... --/\-- Telecommunications / / \ \ Deregulation ---|--/----\--|--- and the \/ \/ Rise of the /\______/\ Corporate State -=~ -=~ -=~ -=~ -=~ -=~ -=~ -=~ -=~ -=~ -=~ -=~ -=~ -=~ -=~ -=~ Robert E. Allen, Chairman and C.E.O. of AT&T, with the recent passing of the U$ Telecommunications Act in describing AT&T's expansion plans said, "the fast lane has opened up"1. We are witnessing the continued acceleration of technological change, and the simultaneous acceleration of AT&T's imperial penetration into all communication markets. AT&T's recent announcement of a divestiture, allows them the flexibility and Ca$h necessary to traverse local and global markets. They have succeded with the cross-subsidized marketing machine, and the value of a loyal and established 'brand'. AT&T has the world's largest intelligent network; a phiber-optik network run by intelligent switches. AT&T competes with forces of evolution to become the global central nervous system. Unitel Communications, the second largest phone company in Canada, is also one of the oldest phone companies in Canada. Originaly called CNCP, Unitel use to comprise the communications infrastructure for the Canadian Railways. With the advent of the eighties, most of the public sector, which included allowing Rogers Communications, and AT&T Canada to invest in CNCP, which was then renamed Unitel. Last summer, Unitel went through a minor 'debt crisis' and the two leading Canadian investors backed away. Due to foreign ownership restrictions AT&T was limited to 33% ownership of Canadian based Unitel. So four Canadian charter banks eagerly took on partnership with the International telecommunications conglomerate. Banks of course are the phone companies' biggest clients. The reorganization of ownership was followed by the reorganization of Unitel's board of directors. Barbara MacDougal who served in the Mulrooney Cabinet under the portfolios of state and privatization, was named as a Director on the Unitel board. While the hoopla of the information economy held the headlines, Unitel began changing it's name to AT&T Canada, and moved it's head offices from Toronto to Halifax, restructuring itself as an unlimited liability corporation. With this special legal status Unitel has a virtual bungee cord, enabling them to plunge deep into the red, while attached to the international conglomerate that can write the debt off as foreign investment in communication infrastructure. AT&T can offer 25% off at all times, undercutting the Stentor Companies, while the Manhatten parent swallows Unitel's $1 Billion dollar debt into their $US 80 Billion dollar annual revenue. They'll match existing services and introduce new ones. Their progress is based upon the medium of the intelligent network that can manage diverse information networks. AT&T sponsors the Art Gallery of Ontario, while introducing networks that will transform society. The wonders of the trans-national corporate state, subverting what remains of our democracy. The name of the game is monopoly, and the medium is the machine; the thinking evolving corporate machine. As of January 1997 we will be living in a new regime. The new socio-economic organization of society will begin with the phone bill. Local telephone services will undergo rate-rebalancing, and pricing will be based upon either pay-per-call or pay-per-minute. Our democratic rights have been subverted and supplanted with consumer rights. This change deliberately has devastating effects on popular/progressive organizations and movements. While these groups are increasingly becoming involved in media activism, engaging and using the media as a political tool, regulation of the media is evolving to enhance and enforce the status-quo. With pay-per-call, you receive 30 calls a month, and each additional call is 25 cents. So how many phone calls does it take to organize a union? How many phone calls does it take to organize a single meeting or a seminar? How many of our phone calls are answered by machines or voice-mail? We are told that the rationale behind 'usage sensitive pricing' is enabling the empowerment of the consumer. Certainly this has been the drive behind recent legislation in the US and Canada which also 'empowers the consumer' by giving them the technical ability to censor television violence. The liberal media and civil liberties groups are all up in arms, crying 'censorship' over the implementation of the V-Chip (which blocks TV violence) and US legislation that bans the use of profanities on electronic networks. In doing so the media are fulfilling their systemic function of diverting public attention from the real issues, and the real role of power within the communications system. This so-called 'attack on civil-liberties' is nothing more than a red-herring. Capitalist front-men like John Parry Barlow of the Electronic Freedom Foundation are just jumping around, distracting the people from the real power play of telecommunications deregulation. As the century draws to a close we are in the middle of a media revolution that challenges existing structures of order and control. The reigning communication czars are scurrying to both protect their own empire and conquer what emerges as the new one. Media are converging, uniting to become some distortion of an 'Information Superhighway' that will deliver our dreams for a marketable monthly price. Emphasis is shifting from the medium used to process information, to the utility used to transport it. Communication conglomerates are all jockeying to become the company to wire the highway into the home. With rate-rebalancing, local telephone service regulation is transferred from the public institution of the Canadian RadioTelevision Telecommunications Commission (CRTC) to the private institution ambiguously termed 'the market'. Rate-rebalancing is the elimination of the long-distance subsidy that enables reduced flat local rates. A subsidy on local telephone service is not compatible with free trade and the will of the market. Here we see that communication policy has been transformed into state-sponsored industrial policy, and the regulation of communications shifts from a social purpose to an industrial purpose. (Winseck 1995) Historically speaking the date 1984 is a recurrent and symbolic fixture in the telecommunications arena. In that year the neo-conservative Mulrooney government was elected in Canada, and the Canadian telecommunications regulatory system followed the American model by dropping 'natural monopoly' status, and thereby introducing the possibility of competition. With the potential for an open telecommunications market, the neo-conservatives had the prerequisite for pursuing free trade. "After 100 years of innovation, the telecommunications industry has achieved its potential as an enabler, energizer, and liberating force. Today, it's an industry at the hub of the political, economic, and social structure of global society, propelling momentous change."2 Telecommunications are the corner stone of any empire. Harold A. Innis' final book, "Empire And Communications," was an examination of the inherent relationship between communication systems, the management of trade, and the construction of political empires. The new world order is based upon the deregulation of telecommunications, the liberalization of trade barriers, and thereby the globalization of capital. It is therefore no surprise to learn that: "Department Of Communication officials played key roles in negotiating the FTA and NAFTA, briefing foreign governments and industry representatives about the Canadian telecommunications environment, visiting provincial agencies to promote competitive telecommunications regimes and the linkage between telecommunications and regional economic development, and in elaborating domestic regulatory policy." (Winseck 1995) Within the period of neo-conservative rule in Canada, the Department of Communications, which is itself responsible for the CRTC, was absorbed into the Ministry of Industry. The CRTC consistently demonstrated their position as being in the back pocket of the telecommunication companies. In the rare exception where the CRTC ruled against the dominant interest, their decisions were overturned by the Federal Cabinet. During the implementation of the neo-conservative agenda "the CRTC executed the government's implicit policy absent a legislative mandate. As an article in the Financial Post pointed out, the Minister of Communications had intervened more times 'in 20 months than all her predecessors in the past 20 years.'" (Winseck 1995) I recently had a meeting with Robert McChesney, an American media analyst. His concern was with the recent US Telecommunications Act, which he claimed was "perhaps one of the most corrupt pieces of legislation in U.S. history, effectively written by and for business." (McChesney 1996) He also said that it was 'the most important legislation in a generation.' Robert related an interesting story on the champion of the U.S. Information Superhighway, Vice-President Al Gore. Gore was originally elected to office with a vision of a 'public' information infrastructure. Original he saw public institutions taking an active role in building the impending information future. However in late 1993, Gore swiftly changed his focus from a public infrastructure, to a superhighway built by market forces. McChesney claimed that at this point Gore received a substantial amount of political campaign contributions. Now with the successful passing of the US Telecommunications Act in February of 96, the American market is almost completely deregulated. In a knee-jerk reaction, monopolies are deregulated to encourage competition. However what we are witnessing is not a competition among equals, or even a competition amongst oligopolies. Rather we see the battle of monopolies, a competition to become the new monopoly. Competition among the telecommunications industry translates directly into concentration of the industry. In the short time since the US legislation was passed, NYNEX and Bell Atlantic have announced mergers, and US West has enacted a $US 5.8 Billion dollar merger with Continental Cablevision, a major US cable company. In New Zealand when telecommunication deregulation and rate-rebalancing occurred in 1989, Telecomm, the existing government monopoly, was bought by a consortium which included American giants: Ameritech and Bell Atlantic. In the five years following the deregulation, local phone rates went up by over 81%. It's no wonder that telecommunications competition is referred to as 'the waltz of elephants'. Last fall I received an email from my friend Marita Moll who is a founding member of both the Public Information Highway Advisory Council, and the Alliance for a Connected Canada, two public interest groups trying to engage in the current telecommunication decision-making process. In this email she requested that I (and the many other recipients on the mail-list) print out a part of the email and send it off to the Secretary General of the CRTC. In between downloading a web-page, sorting my laundry, and reorganizing my hard-drive, I printed out the form-letter, signed it, and posted it off to the Commission. With that one simple action I registered for the CRTC 'public-process' 95-56, concerned with 'universal affordable access' in the face of deregulation of the local market. Little did I suspect at the time that over the following few months I would receive over 12 pounds in documents, thousands and thousands of pages, filled with lame legislative legalese. The Stentor Companies, a consortium of the Canadian regional telecommunication monopolies (Bell, BCTel, MT&T, AGT, etc.) in parallel with this process have introduced a series of pricing proposals for local telephone service. These include pay-per-call: 30 free calls a month, and each additional call is 25 cents, with a $9 cap for heavy users, and pay-per-minute: 240 free minutes a month, with 25 cents for each additional five minutes with a $9 cap. The phone companies proclaim that universal affordable access already exists, and market regulation will help ensure that it continues to exist. Market regulation of course is only possible with the introduction of usage sensitive pricing. One of the key players in the process of telecommunication deregulation has been AGT (Alberta Government Telephone), who were privatized in 1990. Their submission in this proceeding was by far the largest, a full five and a half pounds, in which the corporation included paid studies by marketing groups as well as academics from MIT, Texas, and New Zealand, all praising the benefits of market regulation. The neo-conservatives in Alberta are as eager as any to dismantle the national public communications system. In participating in this current process, it has been interesting to witness the stark contrast between the interests of the industry/private sector, and the interests of the public. Julia Shu of the Coalition for Public Information summed it up best by stating: "Measured service, be it pay-by-the-minute or pay-by-the-call, is not a desired option by any segment of Canadians and will only further decrease the opportunity for financially disadvantaged Canadians to participate fully in the new knowledge-based society and economy." (Reply Submission of the Coalition for Public Information - 95-56) Similarly the submissions made collectively by the Francophone Consumers' Association, the National Anti-Poverty Organization, and OneVoice, the National Senior's Network, also address the issues from a public interest perspective: "Flat-rate local calling is considered an essential aspect of basic telephone service... Stentor's position is inherently contradictory. On one hand, Stentor argues that usage-based charges are the main problem for low income customers. On the other hand, Stentor members offer usage-based charges as a 'budget' option for low income customers." (Submissions of: FNACQ/NAPO/One Voice) Even to overemphasize the obvious the Public Interest Advocacy Centre released a study which stated that 85% of the Canadian public prefer flat-rate local telephone services. However the Stentor Consortium has only responded with business as usual, with the complete rejection of the public's concerns: "The status-quo is not an option. As the Commission and government have recognized local rates must move closer to costs in order to promote efficient and effective competition." (Stentor's Reply Submission) Ironically the Stentor Consortium uses 'status-quo' in alluding to the defeated institution of the nation-state, and with it the exodus of the national elite, as they scurry to join the ranks of the new world order, as "competition has achieved ideological status within the CRTC." (Winseck 1995) When I attended the regional hearings in Toronto in late February, I was not shocked to find that most of the participants were white men in suits, in addition to myself being the youngest participant in the proceedings, perhaps by as much as ten years. Seemingly the only people who were not white males were those representing some of the public interest groups, effectively excluded from the final decisions anyway. Robert McChesney in speaking on the recent decision-making process in US telecommunications legislation explained that: "the debate over communications policy is restricted to elites and those with serious financial stakes in the outcome. It does not reflect well on the calibre of U.S. participatory democracy." (McChesney 1996) I was able to sympathize as clearly the current CRTC 'public hearings' were in fact not public at all, but rather dominated by political and technical elites. What was even more disturbing was that by introducing usage sensitive pricing these elites were subverting our democratic rights with consumer rights. Democratic rights are inherent and unlimited. You always have them, and you can always exercise them, at least in a democracy. Consumer rights on the other hand are not inherent and they are limited. They are based upon the pay-per-use model, as your rights are determined in relation to your participation in the economic marketplace. Thus the more you pay the more you play. The concept of one person one vote is replaced with one dollar one vote. Consumer rights subvert democratic rights by introducing a quantitative factor, achieving a finite definition of our entitled rights, and limiting the extent to which we may exercise them. Universal access to the technology will exist, but the use of the technology will be limited. Democracy depends upon free and open access to information, which becomes severely limited, if not negated by proposed pay-per-use pricing structures. Your right to speak still exists, but how much you get to say is determined by your economic standing. Sound familiar? It is perhaps not surprising to reflect that the largest consumers of telecommunication services are the banks and big business. It therefore makes sense that they are also the biggest proponents of consumer empowerment. These powerful interests need to deregulate the local telephone monopoly, because these companies will also be the largest consumers of new information based services, which can only be offered under 'market' regulation. When the communications system was regulated by public institutions, universal access was ensured for all citizens. Each telecommunication service had to be available for all Canadians. With current market regulation, services such as 'Intelligent Assistants' and video-conferencing are not considered universal, but available only for those who can afford them. The current hearings for universal affordable local access are merely an appeasement, a token action to ensure that Canadians receive the minimum level of telecommunication services, while the societal elite benefit from a wide range of new, 'empowering and enabling' telecommunication services. An editorial in the March 16 Globe And Mail made the argument that: "The CRTC no longer has much of an excuse for extensive regulation." The pay-per-view philosophy is synonymous with the market philosophy, which itself is synonymous with the technological philosophy. The editorial continued by stating: "The same system of control via documentation applies to pay-per-view services." Don't worry the consumers will tell us what they want, don't worry the market will fix it, don't worry technology will solve all of our problems. Why? Simply because: "They can refuse to buy it. They can turn it off. And soon, we can turn off content regulation by the CRTC as well." It's interesting and ironic to also find the following passage, written by William Thorsell, the publisher of the Globe, on the same page as the editorial calling for the dismantling of the CRTC: "In so doing, the media 'manufacture consent' in the public for the actions of the powerful, portraying the elite's selfish interests as public ideals around which good-hearted people can rally." In participating in this process I have concluded that the deregulation of the local telephone market, is the final piece of the puzzle, in the neo-conservative agenda of replacing the Canadian nation-state with the trans-national corporate state. As we approach 1997, we witness the twilight of our sovereignty as a nation. Yet it is at this point in the analysis that I welcome the words of my good friend Jay Terpstra, who keeps reminding me that "nothing's ever really changed. What matter does it make whether it's the corporate state or the nation state. In our struggle for freedom we still find ourselves fighting the state!" Works Cited: McChesney, Robert; "The Internet and U.S. Policy" in Journal Of Communication, Winter 1996, pp. 98-122 Winseck, Dwayne; "Power Shift? Towards a Political Economy of Canadian Telecommunications and Regulation" in Canadian Journal of Communications, Winter 1995, pp. 81-106 EndNotes: 1) From Speach Given on February 8 1996 2) Jean Monty, Chairman and CEO of Northern Telecom -=~ -=~ -=~ -=~ -=~ -=~ -=~ -=~ -=~ -=~ -=~ -=~ -=~ -=~ The TAO Media Collective http://www.lglobal.com/TAO/ -=~ -=~ -=~ -=~ -=~ -=~ -=~ -=~ -=~ -=~ -=~ -=~ -=~ -=~ -----BEGIN PGP SIGNATURE----- Version: 2.6.2 iQB1AwUBMVCdcOKx8nGMX3VRAQFzugL+P9I6vvyR3hsE3S2/Q44VE/klJqD7GEXb W8wjyW9DcyauTsqW1ilBX9Mdr/6c4BWCtCtr0Ve93CZDnMbJktSjgsf2ZdT30zqe q53DzpiDuv0EBoXTxAH/c203UPBC9M6Z =xszN -----END PGP SIGNATURE----- -------------------------------------------------------------- To receive the Anarchives via email send a note to Majordomo@lglobal.com with the message in the body: subscribe anarchives To get off the list, send to the same address but write: unsubscribe anarchives Also check out: http://www.lglobal.com/TAO/