Creating a Global Communication Infrastructure

1. AL AKHAWAYN UNIVERSITY SCHOOL OF HUMANITIES AND SOCIAL SCIENCES COMMUNICATIONS STUDIES Creating a Global Communication Infrastructure Lecture by Dr. Mohammed Ibahrine based on

2. Globalization of the Telecommunications • 1. Free Trade in Communication • 1.1 Impact of WTO Agreements on International Communication • 2. Why Services are important • 3. Liberalization of the Telecom Sector • 4. Privatizing space-the final frontier • 4.1 Case Study: Intelsat

3. Globalization of the Telecommunications • 5. Key players in the global satellite industry • 5.1 Hughes Space and Communication Company • 5.2 Lockheed Martin Global Telecommunications • 5.3 Loral Space and Communication • 5.4 Regional satellite services • 5.4.1 Case Study: Murdoch’s News Corporation – Around the World, Around the Clock • 6. The world of telecommunications • 7. Implications of a liberal global communication regime • 7.1 Who benefited from liberalization and privatization?

4. Globalization of the Telecommunications • The globalization of telecommunications has revolutionized international communication • Global trend in telecommunications • Liberalization of telecommunications • Privatization of telecommunications • Deregulation of telecommunications

5. Liberalization of telecommunications • The state was for most of the twentieth century, the key player in providing a national infrastructure, equipment and regulation in international traffic • In the 1990s, the state monopolies of Post, Telegraph and Telecommunications were forced to give ground to private telecommunications companies

6. Liberalization of telecommunications • As telecommunications traffic increased, so did the demand from transnational corporations for the reduction of tariffs, especially for international services • In 1984, armed with his policy of “Open Skies”, Roland Reagan broke the public monopolies and allowed private telecommunications networks to operate in the national telecommunications arena

7. Liberalization of telecommunications • As a result, the US telecommunications sector was gradually deregulated, liberalized and privatized • In 1985, England followed suit • This shift has now affected telecommunications globally • The major European countries proceeded much more slowly in the process

8. Free Trade in Communication • Free marketeers wanted to end state intervention in world trade and promote liberalization and privatization • This position was strengthened with the move from GATT to the permanent World Trade Organization (WTO), which came into existence in 1995 • The WTO was set up with a clear agenda for privatization

9. Free Trade in Communication • The WTO also argued that dismantling barriers to the free flow of information was essential for economic growth • The proposed liberal global regime in telecommunications aims to create the conditions to enable transnational corporations to penetrate the “emerging markets” of Asia and Latin America

10. Impact of WTO agreements on International Communication • GATS Fourth Protocol on Basic Telecommunications Services (1998) is the most significant agreement for international communication • It obliges the 69 signatories, representing more than 93 percent of world revenues in telecommunications services, to liberalize telecommunications in their respective countries

11. Impact of WTO agreements on International Communication • Within GATS, the telecommunications sector is divided into two broad categories: • 1. Basic services: • Voice telephone • Telex • telegraph • facsimile • 2. Value-added services: • E-mail • Voice mail • Database retrieval

12. Leading Exporters of IT products, 1996?

13. Liberalization of the Telecom Sector • The International Telecommunication Union (ITU) was established on the ethos of perceiving telecommunications as a public utility, with operators having an obligation to provide a universal service • With a policy of cooperation, not competition, the ITU supported restrictions on ownership of and control over telecom operations, in contrast to the neo-liberal telecommunications agenda, which championed privatization and deregulation

14. Liberalization of the Telecom Sector • Under the new international communication regime, the ITU advices countries to dismantle structural regulations preventing cross-ownership among broadcasters, cable operators and telecom companies • ITU was following the communication agenda set by the world’s most powerful nations and telecommunications corporations based in them

15. Liberalization of the Telecom Sector • The policy of liberalizing the global telecommunications system was greatly influenced by the 1996 Telecommunications Act, which transformed the industry within the USA, facilitating the expansion of private US telecommunications corporations to operate globally

16. Privatizing Space • During 1990s, satellites have become the “trade routes in the sky” • Economic growth and technological progress have fuelled a huge rise in demand for global telecommunications services of all types, resulting in the phenomenal growth of satellite industry

17. Regional Satellite Services • The deregulation and privatization of the global telecommunications market, coupled with the perceived need for a strong communications infrastructure to open up new regions to the global economy, have resulted in fierce competition in regional satellite services • In the Arab world, the regional satellite operator, the Arab Satellite Communication Organization (Arabsat), established in 1976 by member of the Arab League is following the path of privatisation

18. Regional Satellite Services • Other satellites, Arabsat A1 and 2B will further improve telecommunications services in the region • Third generation Arabsat (3A) and the Arabsat BSS1 will cover the Arab world and Europe • Saudi government is the largest investor and owner (37 percent) • Thuraya Satellite Telecommunications Company was founded in 1997 with a capital base of $ 25 million

19. The World of Telecommunications • The expansion of global satellite networks is also having a significant impact on the international telecommunications industry • These technologies will converge at a single point and profoundly change the industry and the marketplace • The telecommunications and the dotcom industries are merging (examples)

20. Implication of a Liberalized Global Communication Regime • The global shift from state regulation to market-driven policies are evident everywhere • The WTO claims that the expansion of capital through the transnational corporations has contributed to the transfer of skills and capital to the global South • International communication is increasingly being shaped by trade and the market standards and less by political considerations

21. Who benefits from liberalization and privatization • The biggest beneficiaries of the processes of liberalization, deregulations and privatization and the resultant WTO agreements have been the TNCs/global players which dominate global trade • Microsoft tops the list of the world’s biggest corporations • Of the top 10 richest people in the world, Bill Gates leads the pack with a wealth of $90 billion