We should no longer refer to First and Third Worlds, but to regions that are hardwired to information flows, writes Dwayne Winseck
New technology and patterns of investments shaping their deployment helped redraw the lines of world communication in the last decade of the 20th century. A highlight was, of course, the growth of the Internet.
The advent of round-the-clock financial markets in the early 1990s by means of telecommunication networks linking the computers of the world’s major financial centres allowed financial transactions worth more than $1,5-trillion a day to course through the circuits of global capitalism.
But more than just providing the underpinnings of “fast capitalism”, new communication technology was heralded as “technologies of freedom” capable of fostering democracy, respect for human rights and cultural modernisation worldwide.
Yet, at the same time, the divide between the information rich and information poor remained acute.
For example, by the late 1990s the 29 rich countries of the Organisation of Economic Cooperation and Development (OECD) accounted for 60% of all telephone lines worldwide, despite representing only 15% of the world population.
During the 1990s analysts at the World Bank estimated that more than $7-billion was needed in Africa alone to achieve just one telephone line for 100 people, while others claimed that $200-billion was needed to achieve modest levels of access to telecommunication services in developing countries.
According to these analysts the massive infusion of investment in telecommunication depends on four strategies: privatisation, competition, the World Trade Organisation’s (WTO) telecommunications agreements and adequate regulatory regimes at national level.
The first of these strategies was enthusiastically embraced between 1984 and 2000, with the privatisation of about 110 telecommunication companies worldwide. But the privatisation of telecommunication operators has varied according to regional economic, historical, political and cultural experiences.
In Britain and Mexico, for example, government-owned operators were fully privatised, while in Cte d’Ivoire, Germany, Malaysia and South Africa investors gained only partial, non-controlling shares in former government-owned telecommunication monopolies.
The debt crisis of the 1980s in Latin America spawned a wave of privatisations that saw the United States, Australian and Japanese financial institutions obtaining substantial ownership stakes in telecommunication firms in return for debt relief. In contrast, robust markets and strong states in Asia tended to promote the selective introduction of competition as a means of raising investment to a far greater extent than privatisation.
In Africa, privatisations were much more limited in scope, due to the colonial overtones of returning state-owned public telecommunications operators to foreign operators.
Privatisation trends during the latter half of the 1990s were also affected by the WTO’s expanding role in telecommunication, although the agency’s agreements covering telecommunication struck during the 1990s did not compel countries to undertake privatisation or permit foreign ownership.
The ambivalent embrace of privatisation reflects the fact that it has not been an unequivocal success, with little improvement in telecommunication services. Today the prevailing consensus is that improved access to services depends on well-designed regulatory regimes. Consequently, the number of regulatory agencies around the world exploded between 1990 and 2000, from 10 to about 100.
As with privatisation, the WTO telecommunication agreements promised to propel the advent of competition. Such thinking was bolstered by many studies demonstrating that countries that introduced competition were more effective at increasing people’s access to telephone service as well as to new services such as cellular telephony and the Internet. Exceptions to this rule, such as China, Costa Rica and Iran, were largely ignored. Instead, the WTO became the vehicle for enlarging the reach of competition, especially through the Basic Telecommunications Agreement of 1997.
For the most part, the agreement reinforced the status quo by locking in competition in countries where it already existed and slightly broadening the scope of competition in international telecommunication services in 55 countries, and by permitting competitors to establish their own networks in 44 others.
One of the biggest ironies, however, is that several mostly Caribbean countries used the agreement to lock in monopolies for lengthy periods.
Nonetheless, the WTO did spur on a massive increase in investment. The Basic Telecommunications Agreement and the more general trend of regulatory liberalisation triggered a rush to wire up cities and the globe on an unprecedented scale. From 1997 until 2000, the OECD countries and developing countries alike saw incumbents and new competitors ploughing investment into telecommunication infrastructure. For developing countries investment between 1995 and 1998 tripled the amount of the preceding decade.
As a result the global telecommunications system grew from half a billion users in 1989 to two billion last year. Simultaneously the Internet grew from a couple of million users to 200-million and the number of countries connected to the Internet rose from 90 to 200. This narrowed the gap between developed and developing countries, although stark divisions between the information rich and poor persist.
While improved access to telecommunication services throughout Africa, Asia and Latin America did occur during the 1990s, most new telephone subscribers and three- quarters of all new Internet users lived in a handful of countries: Argentina, Brazil, China, Columbia, Korea, Singapore and South Africa.
Much of the new investment went into laying fibre optic cables between Europe and North America and across the Pacific between the US, Japan, China, Hong Kong and Singapore. In the three years since the Basic Telecommunications Agreement, the capacity of fibre cables linking the globe increased 100-fold. Yet, while these cables span the globe, they terminate in local networks concentrated in 150 to 200 cities worldwide.
The most intense efforts to hardwire cities into the global communications grid are taking place in Europe and North America. Incumbent public telecommunications operators have been joined by private companies and new providers in efforts to build fibre optic networks within and between major European cities.
These processes are accelerated by conglomerates such as WorldCom and AT&T, which have acquired competitive local companies, such as Brooks, MFS, MetroNet, Teleport as well as the Internet-based networks of Compuserve, IBM and Uunet, among others.
In addition to acquiring two of the US’s largest cable systems TCI and MediaOne AT&T signed exclusive covenants with AOL/Time Warner and Comcast to cross-market AT&T’s telephone services and their jointly provided high-speed Internet service.
For AT&T this tangled web of connections furthered its aim of offering a bundle of multimedia services over broadband networks in just 10 US cities and local telephone service in 83 others.
In short, new technology and patterns of investment reveal an unprecedented ability to discriminate between urban spaces that will be linked to the global information infrastructure and those that will not. The transnational netscape is being parsed even further as specific buildings about 40000 to 60000 worldwide according to WorldCom and AT&T are hardwired into global circuits of information flows and disembedded from the immediate constraints of local geography.
As major cities and corporate offices are wired up, entire swathes of the globe are being virtually eliminated from cyberspace. Connections to and within Africa are so sparse that information flows between African countries are routinely routed through former colonial metropoles.
These patterns demonstrate that the nodal points on the global communication grid are cities, both in the First World and the Third World. In the end, these patterns challenge our understanding of the geography and political economy of world communication.
Observers of these conditions, such as the University of California’s Manuel Castells and University of Chicago sociologist Saskia Sassen, suggest that we can no longer adequately refer to First and Third worlds, but to regions that are hardwired to networks and information flows, and thus “switched on”, and to vast disconnected, or “switched off” regions of the world.
Despite unprecedented investment in telecommunication infrastructure in the waning years of the 20th century, this phase was short-lived. Already in the wake of the collapse of the dot-com economy, the US Federal Communications Commission has drastically reduced its projections regarding the scale of investment that will be made in telecommunication worldwide over the next few years.
Dwayne Winseck is an associate professor at the School of Journalism and Communication at Carleton University, Ottawa, Canada