Author: Observatory Admin

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

Uncharted Territory: Cuba’s information sovereignty & US digital capital

Cubans repeatedly rebelled against the mono-culture of sugar that an empire of capital forced on both land and people[1]; only the Cuban Revolution of 1959 finally succeeded in overcoming this bondage.[2] However, even before attending to a new agrarian law, needed to put an end to the plantation system and to redistribute foreign landholdings, Cuba gave an immediate demonstration of its newly won sovereignty. Just two months after Fidel Castro marched into Havana, in March 1959, telephone workers tore down a telephone advertising billboard, placed it in a coffin, and marched it down a boulevard before tossing it into the sea.[3] The ad was an icon of foreign domination. The Cuban Telephone Company, owned by the International Telephone and Telegraph Corporation, controlled and profited from the country’s thoroughly inadequate telecommunications. Cuba’s revolutionary government now took over management of this company; to the cheers of the Cuban people, formal expropriation followed.[4] In the ensuing years, what had been an unbalanced, Havana-centric telecommunications system was extended substantially into Cuba’s countryside. Meanwhile, other companies, based not only in the US but also in Western European countries, were also nationalized.[5] Every government apart from that of the United States duly accepted the legality of nationalization under existing international law, and negotiated financial settlements with the Cuban state.

The U.S. Government neither forgave nor forgot. It imposed a punishing economic embargo, which has lasted for more than half a century. Successive U.S. Administrations made repeated attempts, overt and covert, to overthrow the Cuban Government; since the 1980s, the US government has doled out more than $1 billion (under the pretense of “democracy” and the “free flow of information”[6]) to stir unrest against Cuba’s government. The 1992 Torricelli Act and the 1996 Helms-Burton Act turned the embargo into an even more devastating blockade, by adding further extraterritorial sanctions. Helms-Burton enabled the original owners of nationalized Cuban assets who afterward became U.S. citizens to use US courts to prosecute foreign companies that took over these properties.[7] Such provisions violated international law; but they were still deployed against a Mexican telecommunications corporation for making use of IT&T’s onetime Cuban telephone property.[8] Year after year, for twenty years, the United Nations General Assembly has resolved by overwhelming majorities that the U.S. embargo should be ended. The blockage continues; but real changes are afoot.

If Cuba’s entanglement in the circuits of capitalism had long revolved around sugar, information and communication have now become pivots of the country’s reintegration into a newly digital capitalism. In the run-up to President Obama’s 2014 announcement that the US was negotiating with Cuba to restore diplomatic relations, the U.S. Agency for International Development (USAID) was funding a Cuban version of Twitter – “ZuneZuneo” – through the Cuban-American youth group called Roots of Hope,[9] and was infiltrating the underground Hip Hop scene by sending a Serbian music producer to recruit Cuban rappers to provoke fans to spark a youth movement against the Cuban state.[10] As the U.S. shifted its foreign policy strategy – the two countries re-established formal diplomatic relations in July 2015 – it also moved networks systems and applications into the foreground.

The previous June, Google Chairman and former CEO Eric Schmidt had visited Cuba, with a team of Google executives including former State Department advisor Jared Cohen, and accompanied by the usual noise about a “free and open internet.”[11] Expressly criticizing the embargo, Schmidt geared his visit to scoping out future business opportunities. Soon after, Google released its Chrome browser and free versions of Google Play and Analytics in Cuba.[12] This was possible because, while the US trade embargo still remains intact to this day and can only be lifted by an act of the US Congress, Google tactfully offered free services – which fell between the cracks of the embargo – to test the waters in Cuba. As Google anticipated, the Obama Administration eased regulations in a few strategic fields including telecommunications.[13] To “initiate new efforts to increase Cubans’ access to communications and their ability to communicate freely,” the U.S. relaxed its controls to allow U.S. companies to sell telecommunications equipment and services, software, and Internet services in Cuba.[14]

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Behind “Big Data”

Over the last few years, the idea has taken hold that “big data” is driving far-reaching, and typically positive, change. “How Big Data Changes the Banking Industry,” “Big Data Is Transforming Medicine,” and “How Big Data Can Improve Manufacturing,” are characteristic headlines. “Big data” has become ubiquitous, powering everything from models of climate change to the advertisements sent to Web searchers.

Even in a society in which acronyms and sound-bites pass for knowledge, this familiar formulation stands out as vacuous. It offers us a reified name rather than an explanation of what the name means. What is the phenomenon denoted by “big data”? Why and when did it emerge? How is “it” changing things? Which things, in particular, are being changed – as opposed to merely being hyped? And last, but hardly least, are these changes desirable and, if so, for whom?

Big data is usually defined as data sets that are so large and complex – both structured and unstructured – that they challenge existing forms of statistical analysis. For instance, Google alone processes more than 40 thousand search queries every second, which equates to 3.5 billion in a day and 1.2 trillion searches per year;[1] every minute, Facebook users post 31.25 million message and views 2.77 milion video, 347,222 tweets are generated; by the year 2020, 1.8 megabytes of new information is expected to be created every second for every person on the planet.[2]

The compounding production of data – “datafication,” in one account [3] – is tied to proliferating arrays of digital sensors and probes, embedded in diverse arcs of practice. New means of storing, processing, and analyzing these data are the needed complement.

A quick etymological search finds that the term “big data” began to circulate during the years just before and after 2000.[4] Its deployments than quickened; but this seemingly sharp-edged transition into what Andrejevic and Burdon call a “sensor society”[5] actually possesses a deeper-rooted history.

The uses of statistics in prediction and control have long been entrenched, and have increased rapidly throughout the last century[6] – as is pointed out by a working group on “Historicizing Big Data” established at the Max Planck Institute for the History of Science. The group emphasizes that big data must not be stripped out of “a Cold War political economy,” in that “many of the precursors to 21st century data sciences began as national security or military projects in the Big Science era of the 1950s and 1960s.”[7]

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Appellate Court Ruling For Google Books: Fair Use, or Anti-Democratic Preemption?

After 11 years of battle between Google — now a unit of the just-named Alphabet conglomerate — and the Authors Guild,[1] a professional organization of published writers, the second US Circuit Court of Appeals has ruled that Google’s book project is protected under fair use [paper trail].  Responding to this judgment, the American Library Association (ALA) announced that “Libraries laud appeals court affirmation that mass book digitization by Google is ‘fair use’.”[2] Larry Alford, president of the Association of Research Libraries (ARL) concurred, stating that ”ARL applauds this victory for fair use regarding the Google Books project, which involved partnerships with many of our libraries.”[3]

Is this outcome truly a cause for celebration? For whom is this a victory? What this verdict actually signifies may be understood only by clarifying the nature of the conflict; and analysis needs to go beyond “access,” as if “access” constitutes an absolute virtue – the be-all -and-the-end-all.

Google’s search engine has long been the premier gateway to the Web, granting Google a dominant market position online (around 60+ percent of all computer Web searches). This has enabled Google to seize a disproportionate share of Web advertising. However, Google’s dominance is not guaranteed. Competition to control the Internet has intensified between Google and other Web giants — Amazon, Facebook, and Apple. From Google’s perspective the question of how to maintain its market position could hardly be more vital.

Its superb search technology — its secret algorithm — isn’t enough, in itself, to ensure supremacy.  An additional element is also required. Only by protecting and, if possible, expanding its user-base, to feed streams of data into the company’s means of production — its search algorithm — will Google’s dominance in Web advertising be protected. Expanding its user-base in turn may be accomplished only by introducing, or taking over, services and content with which to draw additional users, and with which to target ads at what the industry calls “most-needed audiences.” Read more