Cause for celebration on the 20th anniversary of the Telecom Act?

This week marks the 20th anniversary of the U.S. Telecommunications Act of 1996.  Celebrations have been sighted in and around Washington, D.C.[1]

Helpful clarification of the substance of the Telecommunications Act of 1996 was provided by Patricia Aufderheide in 1999.[2]  Ostensibly passed to support and strengthen market forces in networking, and signed into law at the height of the competition fever that had gripped the citadels of American power, the legislation was part of a more encompassing structural transition.  The early 1990s, when about ten giant local- and long distance carriers ruled U.S. networking, turned out to be the last gasp of a tightly bounded industrial giantism.  This circumscribed mode of ownership and control was, however, now rapidly supplanted. A much wider range of participants together constituted the giantism that followed:  proprietary intranets, operated by big companies based in every economic sector; content delivery networks, operated by the likes of Amazon, Google, Facebook, and Microsoft; and a scattering of huge backbone Internet providers.  One might say that capitalism in communications had been opened to capital at large.
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There is little cause for celebration about this, as a quick review of the events occurring this week makes plain. Lawyers, engineers, executives and policy wonks:  these were the chief participants. Ordinary folk are as removed from these lackluster events as they were from the legislation itself.  On the dreary occasion of Congress’s vote on Public Law 104-104, if memory serves, the only praiseworthy statement came from Congressman John Conyers, a trenchant opponent.  Notable was the exceptionally strong bipartisan backing for the measure; and this was attributable to the extensive support that it gained from corporate America.  Less interesting was the parade of self-congratulatory speeches that ensued, in which legislators, lobbyists, and academic parrots declaimed on the virtues of competition.  Gas-baggery ruled.

Today’s party-ers are cast from the same mold.  They don’t seem to include many working people, let alone any trade unionists.  That’s not accidental:  these are the people whose interests were further marginalized by the Telecom Act of 1996. However, the revolving door between industry and government is spinning as fast as ever, as regulators and lobbyists exchange places.  The Center for Responsive Politics lists literally dozens of individuals who have moved between the Federal Communications Commission (FCC) and industry.[3

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U.S. Dominance Over International Communications: A Status Report

Two stories jump out this week. One concerns the Internet’s coordinating mechanism, the other the pact that enables European data to be sent to the United States.  Seemingly discrete, at a deeper level they are organically connected. The underlying issue is whether challenges to U.S. power over the system of international communications will intensify – or be shunted aside.

We have written before about the “Safe Harbor” agreement, which had governed data- transfers between Europe and the U.S. and which was struck down by the European Court of Justice three months ago because it did not offer sufficient guarantees that Europeans’ personal data were protected from eavesdropping by U.S. intelligence agencies.  Would a new pact be devised, incorporating Europeans’ demands to strengthen privacy protections? What kinds of guarantees would be supplied?

An answer is now at hand. Although the prescribed negotiating deadline passed without agreement, two days late a deal was announced.[1] The US firms escaped the obligation to store their data in European lands; while, a new “EU-US Privacy Shield,” the European Commission declared, “will provide stronger obligations on companies in the U.S. to protect the personal data of Europeans.” U.S. companies wishing to import personal data from Europe “will need to commit to robust obligations on how personal data is processed and individual rights are guaranteed.” The U.S. Department of Commerce will monitor that companies publish their commitments, which makes them enforceable under U.S. law by the US Federal Trade Commission. In addition, “any company handling human resources data from Europe has to commit to comply with decisions by European Data Protection Administrations.” E.U. citizens will have access to an ombudsman located in the United States. And, “for the first time, the US has given the EU written assurances that the access of public authorities for law enforcement and national security will be subject to clear limitations, safeguards and oversight mechanisms. These exceptions must be used only to the extent necessary and proportionate. The U.S. has ruled out indiscriminate mass surveillance on the personal data transferred to the US under the new arrangement.”[2]

We will need to see during the months ahead just what level of protection the “Privacy Shield” actually offers. What’s interesting, though, is that considerable effort needed to be expended to reach even such a seemingly minimal agreement as this.  Intense negotiations were conducted at the World Economic Forum in Davos, involving both governmental functionaries and trade groups. Satya Nadella, the CEO of Microsoft, editorialized that the Safe Harbor agreement – with its guarantee that corporations may transmit personal data from jurisdiction to jurisdiction – must be supplemented with “additional agreements, that enable privacy rights to follow data around the world.”[3]  Google, by appointing as head of its global policy unit a onetime Obama Administration negotiator known for her calm, conciliatory style, reportedly was “burying its confrontational stance” in favor of more moderate international diplomacy.[4]  Facebook publicized a report that it had commissioned, to emphasize disingenuously that the U.S. had actually become more “privacy friendly” than Europe.[5]  Transatlantic data flows are simply too important to be left to the lower echelons.

Still, the data-hogging transnationals are not yet in the clear.  Europe’s national privacy regulators are slated to release their own decision tomorrow, February 3d, on how data should be moved between the two regions. And a clamor that the EC had sold out 500 million Europeans is already audible. It is possible that some nations’ data protection authorities will prove more vigilant than their colleagues in the Commission.  Thousands of U.S. companies, rooted in every sector, will be watching – eagle-eyed, we might say. No matter which way tomorrow’s decision goes, transborder data flows will still continue to constitute a crucial point of vulnerability for corporate capital.

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Free Markets In Action

Even when it isn’t election season in the United States, there’s a lot of noise made about “the free market” and “entrepreneurialism.”  Government, goes the refrain, simply needs to stand back to let the alchemy of capitalism proceed.  Already, the new year has disclosed two small but revealing news items that clarify the actual – contrary – reality.

The first concerns driverless cars.  Much ballyhooed, the major story has been whether the transition to software-powered vehicles will be shepherded by the big automakers – or by Silicon Valley.  The news peg, as we all have learned, is “disruption”: the competitive market in action.

Not so fast.  Consider recent disclosures that the U.S. Government will “expedite regulatory guidelines for autonomous vehicles and invest in research to help bring them to market.” The Obama Administration, it turns out, has pledged no less than $4 billion in its proposed budget for the next fiscal year, “to fund research projects and infrastructure improvements tied to driverless cars.”[i]  The relationship between government regulators and corporate carmakers is aptly described as “cooperative” – including with regard to vehicle safety as the National Highway Traffic Safety Administration (NHTSA) is ready to exempt carmakers from safety standards.[ii] Are driverless cars the answer to the environmental despoliation caused by automobiles?  An open-ended and inclusive public deliberation could give us the answer.  We won’t get it.  The objective of the Obama budget item is already taken for granted:  “to accelerate the acceptance of driverless cars on U.S. roads.”[iii]

Four billion dollars isn’t what it was; still, it’s a sum that would suffice to fund a lot of college scholarships for students from poor families – 49 million people are struggling to have enough food to eat in the US according to a report from the U.S. Department of Agriculture.[iv] But the government trough remains full, instead, for the big units of corporate capital – the ones whose executives so often pontificate about free markets and the evils of big-government.

Here’s another tidbit that imparts a comparable lesson.  It turns out that billionaire Michael Dell – of the eponymous PC company – has drawn on his investment fund to purchase a dozen or so mostly small U.S. television stations since 2011. Is Dell’s purpose to enter the broadcast market, and to innovate in ways that lead to further profitable success?  Not exactly.  His investment is based on his knowledge that the airwaves – the electromagnetic frequencies – used by these small broadcasters are going to be auctioned by the U.S. Federal Communications Commission later this year – bought, and then resold to big wireless operators like AT&T.

Dell acquired this whole lot of TV station frequencies for $80 million; he might be able to resell them to the government for as much as several billion dollars.  The several stations he acquired in Pittsburgh, for example, might garner as much as $1.47 billion; the $8 million he spent on KTLN in San Rafael California might win him as much as $370.5 million from the FCC.  And, the Wall Street Journal imparts, Dell “isn’t the only spectrum speculator.”  As might be predicted, likeminded predators hail from what is euphemistically referred to as the investor community: Fortress Investment Group and the infamous Blackstone Group in particular.[v]

Why couldn’t the airwaves simply be reclaimed by the government – what we so often term “our” government?  After all, despite storms of popular protest, they were preferentially allocated to commercial broadcasters without charge.[vi]  A fair reimbursement would be Dell’s purchase price for each station. This option, however, is not deemed worthy of discussion in mainstream policy discourse. Also off-limits is that the natural resource on which broadcasting, mobile telecommunications, and satellites each depend, the electromagnetic spectrum, is being transformed into a proprietary good rather than a public resource.  Is this its best use?

Often, inequality is characterized as a condition that is inexorable.  Some are rich, some are poor:  it’s always been so.  In fact, inequality is continually extended and enlarged via routine political-economic mechanisms.  The state plays an essential role in this larger process.  In communications and information, the state endows companies with franchises and rights of way, allocates spectrum, makes supportive R&D expenditures, and contracts for services with private providers.  Boondoggling and corruption of course are regular features.  This, however, should not obscure the fundamental structural reality:  Capital needs the state, no matter how often individual capitalists may protest its supposed incursions.  That’s the lesson of these two stories – the beat goes on.

[i] Bill Vlasic, “Administration Proposes Effort on Driverless Cars,” New York Times, January 15, 2016

[ii] Allisa Walker, “Everything You Need to Know About Obama’s Autonomous Car Plan,” Gizmodo, January 21, 2016..

[iii] Mike Spector and Mike Ramsey, “U.S. Wants to Steer More Driverless Cars,” Wall Street Journal, January 15,  2016.

[iv] US Department of Agriculture Economic Services, “Food Security Status of U.S. Households in 2014.

[v] Thomas Gryta and Kate Linebaugh, “Computer Mogul Michael Dell Stand to reap Billions from FCC Auction ,” Wall Street Journal, January 19, 2016.

[vi] Robert W. McChesney, Telecommunications, Mass Media, and Democracy: The Battle for the Control of U.S. Broadcasting, 1928-1935.  New York: Oxford University Press, 1993.

Low-Wage Workers & the Internet Industry

What are the overall impacts of tech companies on occupational structures, employment patterns, and labor practices? This question is large, complicated, and vital.[1]

To engage it, a meaningful starting-point pertains to low-wage workers. As well-compensated engineers and entrepreneurs have been raised up as the Internet industry’s public face, low-wage workers have become a mere afterthought. The very terms that analysts use to characterize this category of workers suffer from ambiguity and imprecision: “flexible,” “independent,” “temporary,” “contingent,” “freelance,” “casual,” “precarious.”  The International Labor Organization (ILO) states, simply, that such workers fall within a “non-standard form” of employment.[2] Two facts, however, are certain. First, low-waged workers are crucial to the business models that are being advanced by Internet companies.  Second, low-wage workers in the “new economy” are increasingly pursuing “old-economy”-type job struggles and demands.[3]

To press ahead from here, a conception of the labor process is essential.

The Labor Process

Identified and explicated forty years ago by Harry Braverman,[4] and further clarified by historians and political economists, the labor process provides an irreplaceable analytical fulcrum. Both to cheapen costs and to augment control,[5] capital has continually attacked the labor process as it exists, with the aim of altering and even reconstituting everything from the content and sequencing of specific job-tasks, to the technical division of labor within companies and industries, to the location of production processes. Beginning during the 1970s, a new and expanded cycle of innovations around networks and other ICT tools permitted capital to intervene in the labor process across an unprecedented range, which encompassed an increasing number of information-processing jobs.[6] Making explicit, aggregating and codifying what had been workers’ tacit knowledge, and/or generating and collecting new categories of data, corporate suppliers and corporate users of networks worked to standardize more tasks and to quantify more outputs. Managers, as Huws explains, gained new freedom to disaggregate and reorganize work, and to relocate or contract it out in line with their varied corporate strategies.[7]

Prominent recent examples of this much wider trend include Uber and its rival, Lyft, alongside rental platform Airbnb, labor outsourcer TaskRabbit, the Instacart grocery delivery service, and the dry cleaning service Washio. Such companies invade existing industries by deploying network resources to compile, codify, rearrange and contract out existing labor processes. In the process they extract data from, and push costs onto, workers and users alike.

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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{17f48941629941408d54a014d0f93d93b36accbdc22b35d759326eee58f33f56} 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{17f48941629941408d54a014d0f93d93b36accbdc22b35d759326eee58f33f56}), Argentina (20{17f48941629941408d54a014d0f93d93b36accbdc22b35d759326eee58f33f56}), Cuba (14{17f48941629941408d54a014d0f93d93b36accbdc22b35d759326eee58f33f56}), Uruguay (10{17f48941629941408d54a014d0f93d93b36accbdc22b35d759326eee58f33f56}), and Bolivia (5{17f48941629941408d54a014d0f93d93b36accbdc22b35d759326eee58f33f56})[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{17f48941629941408d54a014d0f93d93b36accbdc22b35d759326eee58f33f56} 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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