Month: December 2015

CANTV Venezuela: What’s at Stake?

Available in Spanish. Kindly translated by Daniel Urbina

Since the election of Hugo Chavez in 1998, his passing of a package of 49 laws meant to implement a process of fundamental social and political transition[1] and, especially, since a failed coup attempt in 2002,[2] the Bolivarian Revolution has carried on. It has faced both foreign and domestic enemies, and it has not been free of internal problem such as mismanagement, opportunism and corruption. Yet, by launching both land- and oil industry reform, it has also driven forward policies of economic support for workers, the poor, and indigenous people; and it has established new mechanisms for popular participation. Challenging neoliberalism, the Bolivarian Revolution has produced some real gains for the Venezuelan majority.

Communications have been unusually important in this wider program of transformation. Emboldened somewhat by Chavez’s 2007 call for an “explosion of communal power,” local community media have possessed an uncomfortable status: at once reliant on the central state and needfully independent of it.[3] These media reform efforts have also occurred within the context of a media political economy that was structured predominantly around the interests of capital. Venevision is a commercial broadcast service with a 67% share of the audience and is owned by Gustavo Cisneros, whose net worth in 2013 was estimated at $4.4 billion.[4] Similarly, meanwhile, “The New Television Station of the South” Telesur – a pan-Latin American network headquartered in Caracas but a collaborative effort between Venezuela (51%), Argentina (20%), Cuba (14%), Uruguay (10%), and Bolivia (5%)[5] – had to square off against the well-funded CNN and other largely hostile international media. Many participants in the Bolivarian Revolution understood that, by mobilizing in this strategic field, they were mounting a challenge to an inequitable and deeply rooted existing order in communications.

President Chavez in fact broke sharply with the neoliberalism that, during the 1990s, succeeded in privatizing national telecommunications operators in dozens of less-developed countries; opening the companies that resulted to foreign investment; laying off many of their workers and outsourcing work to still other private companies. With the price of oil high and oil revenue pumping dollars into the state, and with the Right still momentarily off-balance following the failed 2002 coup attempt, Chavez renationalized CANTV – Venezuela’s major telecommunications company, and the second largest enterprise in the country after the state oil company, PDVSA.[6] Fifteen years after CANTV had been privatized, in order to complete the process of taking back control of national telecommunications, the Bolivarian Revolution had to find $572 million to pay the US telecom giant Verizon for the 28.5% stake it had acquired in CANTV.[7]

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Geopolitics and Economic Power in Today’s Digital Capitalism

Presentation to the Hans Crescent Seminar, London[i]
13 December 2015
Dan Schiller

During the second half of the 20th century, U.S. power was notably deployed in order to generalize capitalist imperatives in and around world communications. The technological revolution that was underway – the digitization of information processing – thus developed within a sharply altering political economy. Its very triumph, however, opened digital capitalism[1] to new geopolitical conflicts.

Digital Capitalism

Aggregate U.S. corporate investment in “Information Processing Equipment and Software” began to accelerate after the recession of the early 1970s.  It is the largest category of capital equipment spending overall and, amounting to $331 billion in 2013, it totals more than the GDPs of all but around 35 countries.[2] Collectively, the largest sectoral investor in information processing equipment and software is the information industry itself – a point I’ll come back to.[3] Network systems and services, however, lace through all sectors of the capitalist political economy: they are the predicate of big capital’s operations and profit projects across the world.  To comprehend this development it must be situated theoretically and historically.

If, as Ellen Wood has explained, the capitalist mode of production is distinctive for separating economic and political power then, paradoxically, this selfsame separation means that capital must depend fundamentally on the state – both to guarantee existing commodity relations, and to impose these relations in new fields to enable capital’s further expansion. [4]  Sweeping political intervention by the U.S. state was the demonstrable prerequisite of escalating corporate investments in information processing and software.

Corporate demands to liberalize and modernize proprietary networks developed domestically during the 1950s and 1960s, and the U.S. Government repeatedly acceded to these demands.[5]  A U.S. push to liberalize and upgrade networks soon also radiated outward. First of all, the U.S. intervened to preempt or to deflect political counter-movements.  U.S. state-directed attacks were waged against import-substitution policies for computerization [“informatics”], notably in Brazil; against European initiatives to restrict corporate trans-border data flows; against what were deemed lax intellectual property laws worldwide; and against the Non-Aligned Movement’s drive for a New International Information Order, which expressly prioritized economic redistribution rather than profit maximization in international communications.[6]

A fundamental feature of this U.S. state offensive – this new imperialism – was to plant capitalist imperatives and -property relations throughout global communications[7] even as it forcefully generalized a U.S.-centric data communications system, the Internet.[8] These, not coincidentally, were the years of the “hyper-power” that saw the collapse of the Soviet Union and the restoration of capitalism in China. Some nations opposed (Brazil) or tried to sidestep (France) the Internet’s U.S.-centric control structure; however, they gave way as the U.S. successfully established a worldwide data infrastructure for capital.

The Internet is often heralded as a democratizing force, however, its overriding function has been to deepen and renovate capitalism.  The Internet provides an unprecedentedly wide platform for driving capitalist imperatives into new industries, and restructuring existing industries.  This process is, however, neither democratic nor contradiction-free.

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Transborder Data Flows

Available in Spanish. Kindly translated by Daniel Urbina

Early in October, Europe’s highest court invalidated the 15-year-old “safe harbor” – an international agreement that the European Union had negotiated with the United States to loosen the EU’s Data Protection Directive of 1995[1] so that it would allow companies to transfer personal information in digital form from the European Union to the United States.[2]  Is the European Court’s judgment a fundamental change in networking policy – a full stop – or merely a comma?

This is actually a longstanding structural conflict that has reignited. Its beginnings go back nearly half a century – when transborder flows of computer data [TDF] threatened to become a point of sharp conflict between the US, Europe, and often newly independent countries of the then-Third World.

By the mid-1970s, TDF was simultaneously controversial and – for U.S. big business and military agencies – irreplaceable. In 1981, Herbert I. Schiller showed, a few thousand large corporations possessing foreign direct investments outside the United States and (two-thirds of them, anyway) headquartered within the U.S. – relied on “a continuously swelling volume of data flows circulating inside [their] corporate business structures across national boundaries.”[3] Based in all economic sectors, these companies used early computer communications networks to transmit data concerning such things as “raw material stocks, production schedules, quality control, personnel records, tax and legal information, currency transactions, profit repatriation, and investment decisions.” As Schiller underlined, TDF helped to enable the largest corporations both “to transact their global business and further integrate the internationalization of capital.”[4]

A second source of TDF was the U.S. military and its allies. “The ability of American companies to operate on a global scale and enjoy the benefits of worldwide resource and market exploitation,” Schiller explained, “would be unimaginable without the full backup of a concentrated military power, ready for instantaneous deployment and intervention.”[5] Military and intelligence agencies depended on networked TDF to operate bases around the world; to implement attacks; and to conduct increasingly widespread surveillance.

There existed no definitive inventory of TDF; even partial views were highly inexact, for  the data that streamed across jurisdictions remained shielded. How much data was being sent over the private telecommunications circuits that carried most of it?  What portion of TDF was made up of operational and administrative business data? What part of the total was comprised of personally identifiable information?  What were the companies doing with all of “their” data? States did not deign to find out. The absence of meaningful public documentation bespoke an underlying power imbalance. Big companies successfully insisted that policymakers should not peer too closely at TDF, out of concern that such investigation might lead to calls for greater accountability – which in turn might constrain the operations of their profit-projects.

TDF not only conferred power on corporate capital but also, paradoxically, established a new point of vulnerability for it.  Interruptions and oversight requirements both endangered the political economy that was being reconstructed around computer-communications. Physical threats emerged when an earthquake or even the drag of a ship’s anchor engendered a break in the submarine cables over which data coursed; however, far more menacing for big business were political threats, emerging in initiatives that aimed to restrict the content of TDF, or charge according to the volume of data sent, or oversee TDF in the interests of self-government. Read more