Can the market plan?
In information technology, few issues appear as boring as telecommunications policy and the related field of electromagnetic bandwidth (the internet equivalent of TV and radio airwaves) allocation. To keep the subject dull, its presentation is often incomprehensible. "Meeting to discuss gigahertz bandwidth allocation" sounds much less relevant to most people than "Washington and its rich allies steal the world's airwaves".
For the past century, Europe, North America and a few other countries have played a game of sharing out the airwaves. The internet gives this game a new twist.
The peak body for standards and airwave allocation has been the United Nations' International Telecommunications Union (ITU). The ITU was formed as the International Telegraph Union in 1865 to coordinate communications between European states. It expanded to cover radio because of an issue of shipping safety — the Marconi Wireless Telegraph Company had instructed its operators not to talk to radio stations using non-Marconi apparatuses.
In 1932, the ITU published the first set of regulations for telephones, to accompany earlier telegraphy regulations. The US refused to sign these regulations until 1973, its reason being that its telegraph and phone systems were privately owned. Despite this excuse, until the 1980s the US phone system was dominated by the Bell company's system. This was the de facto US telecommunications standards developer prior to its splitting by US government order in 1984.
The development of technology and the extent of already installed infrastructure by the 1960s laid the basis for competitive telecommunications markets in the US and parts of Europe. It also provided a strong motive for a handful of carriers to move onto the international arena.
Abolition of traditional national telephone monopolies everywhere has become part of the neo-liberal agenda. Europe followed the changes in the US telecommunication environment within a few years, as shown by a series of European Commission directives: opening the equipment market in 1988, value added services in 1989, data communications markets in 1993, satellite services markets in 1994, cable television in 1995 and mobile phone services in 1996.
This shake-up had an unexpected result. Organisations such as the ITU traditionally had two constituents: national governments and nationally monopolised (public or private) phone companies. A national phone company in Benin or a national government delegation from Thailand was at the mercy of major players. Nevertheless, the US, Japan, Britain, France and some others fought out the standards battles from a generally level playing field.
Today that is all gone. In almost every advanced capitalist country, there is no longer a single voice for the telecommunications industry. It is now unfashionable for government to provide any technological direction, because that is the role of the market. In an added twist, the recently formed European standards organisation CEN has introduced weighted voting based on industrial development and reduced national representation.
The national basis of international telecommunications regulation has disintegrated; terminal equipment manufacturers set their standards independently of network and services standards; vendor coalitions set their own standards; and content creators do not agree on the benefits of standardisation.
This may all seem a long way away from the internet, but it is not. From the point of view of capitalists, the biggest problem with the internet is figuring out a way to use it to screw money out of consumers. To do so requires the adoption of new technologies and uniform standards. But capitalist governments no longer do the planning. In their absence the market is producing a mess.
By Ian Peters