Saturday 25th May 2002
| ICTs, mobility and globalisation
Saturday 25th May 2002
|
Ladies and gentlemen
Firstly, my thanks European Students' Forum for the chance to speak here today.
I imagine by now that more than enough references have been made to the Wall, to jam doughnuts, to the more decadent aspects of this city or at least to the things that people imagine happened or perhaps still happen in Berlin.
I am old enough to have been born a few years before the Wall and to have visited Berlin when it was still divided. It has changed a great deal and in many places it is unrecognisable.
I have been involved in the debates and discussions about telecommunications policy since the mid-1980s. Since 1999 I have been engaged full time. I spend some of that time at places like the International Telecommunication Union (ITU), the OECD and the European institutions lobbying and debating these issues.
I must first explain that I represent users of telecommunications and not operators. Therefore I am happy to cast them in the role of the men in black hats, the monopolists and the oligopolists. I am heavily involved in several competition law cases against them for abuse of single and joint dominance. The leading two being international mobile roaming and the high price of calls to mobile telephones.
Let me try to draw on that experience to address the questions posed
by the organisers of this event.
We are asked to consider how:
To tackle the negative effects of ICT with regard to global mobility,First of all we must determine what are the effects of ICTs on global mobility, how do these interact. Then we must identify what we consider positive and negative. We may not agree at this initial stage. Sometimes what seems initially to be positive turns out to be negative and vice versa.there should be stricter rules regarding ICT services.
The framework for trade in ICT services comes from the World Trade Organisation in its General Agreement on Trade in Services (GATS). This has a Telecommunications Annex and a Reference Paper on Telecommunications, plus a separate agreement for hardware, the Information Technology Agreement (ITA). The WTO and before that the GATT have worked to reduce barriers to trade in services in general. Increasingly, that means services delivered by means of ICTs.
Within the WTO, telecommunications is unique. Countries volunteer for the commitments, rather than sign up as a result of intensive bargaining over fish or wool, bananas or steel. Inevitably there are exceptions, those countries that refuse or make commitments of no real value or with no intention of observing them.
In part this enthusiasm is because there is a long standing and well proven link between Gross Domestic Product (GDP) and fixed teledensity, the number of telephone lines per 100 population. Growth in telecommunications benefits all in the economy and a growing economy benefits telecommunications.
However, life has changed since GSMs have spread across Europe a lot faster than the Black Death.
It is much harder to assess the relationship of mobile teledensity with GDP. The very low barrier to acquiring a mobile phone removes some of its economic significance. This is the attraction to 10 and 12 year-olds. Yet even if it is very cheap to acquire it can still make an enormous effect on the economic behaviour of the individual with the phones, especially in developing countries. There is a need for much more economic research on this.
The framework for European Union policies for ICTs is set out in the eEurope Action Plan. This has the broad goal of making Europe the most dynamic knowledge-based economy in the world.
Recognising the specific needs of SMEs there is a Go Digital programme. Often, they do not have the specialist staff or people who are charged to explore the potential benefits of ICTs.
We have a new legislative package for telecommunications which will take effect from 25 July 2003. It will extend to the members of the European Economic Area (EEA) and to the Accession Countries (ACs) as they adopt the acquis communitaire.
The aim is, eventually, to create a single market for telecommunications and for communications services.
In addition to the sector specific measures, there are horizontal measures such as:
The United Nations has set out its Road Map for the implementation of the Millennium Declaration. This seeks to ensure that the benefits of new technologies, especially information and communication technologies are available to all. The UNDP, the Development Programme, includes Information and Communications Technology.
The World Bank has been involved in ICTs for decades, recently through its InfoDev Programme.
Last March, the International Telecommunication Union held its World Telecommunications Development Conference in Istanbul with a Declaration and Action Plan.
One of the findings of the ITU reports prepared for that meeting was of the unexpected contribution of mobile telephony to closing the digital divide. Many of us have been surprised by the extent of the contribution of mobile telecommunications. Everybody knows that mobile telephony worked in the developed economies where it has reached pandemic proportions. It has also succeeded in economies at all levels, including the least developed countries. In particular the pre-paid card makes it attractive to those on low and very low incomes.
GSM has proved to be much more than a bourgeois toy.
In December of next year there will be the World Summit on the Information Society (WSIS) organised by the International Telecommunication Union in Geneva.
The danger of these events is that a few very senior people come from a lot of countries and make some nice speeches at each other, drink some cocktails and return home. Those speeches will touch on the realities, but will seldom challenge anyone or any policy.
However, this not the way to engage the domestic political process. Since reforms present very real political obstacles from many vested interests, there has to be a substantial measure of consensus if they are to succeed. If the process of reform is to succeed, it must be well established in a country, across political parties and with proper account taken of national circumstances.
There have been long arguments about reform of the accounting rate system for international telephony. It is the system by which large amounts of money are taken from the developed world and transferred to the emerging and least developed countries. It is done by setting artificially high charges for international calls to those countries. However, it lacks transparency and the money, a rare source of hard currency, is often siphoned off by governments for other purposes. It encourages the governments to run monopolies to ensure that they can keep their share of the money. Yet reform of this continues to take up valuable efforts, when it would be far better to replace it with open and transparent subsidies when there is a demonstrable need.
Two years ago the G8 at Okinawa established the Digital Opportunity Task Force DOT Force. Last year it adopted Genoa Plan of Action which it recently reviewed at its Calgary meeting in the run up to the Kananaskis Summit. Despite some concerns about its relevance, this programme has been greatly improved.
There is considerable discussion at national, regional and global level.
There is enormous effort put into the exchange of expertise and of best
practice, both in operations and in policy formulation.
Globalisation and mobility
We are also asked to consider:
To what extent do ICTs influence global mobility and globalisation?We live in a world where my mobile phone works most places I go. The obvious exceptions are Korea (North and South, for different reasons) and Japan. One of my two Internet Service Providers (ISPs) can be dialed anywhere I am likely to visit. With a laptop computer I can carry on my work almost as if I am in my office. If I go somewhere truly exotic, then I can get a satellite phone, say if want to row across the Atlantic or retreat to a Pacific Island.
There is a price to pay, but any of us can be extremely mobile if we or our companies wish it.
If nowhere else, we have seen the effects on CNN. News coverage is no longer constrained by fixed communications. Even in the most out of the way locations we have satellite video telephony.
To develop a bigger picture, let me use India as an example.
In the middle of the nineteenth century, Benjamin Disraeli wanted to re-brand Victoria Saxe-Coburg-Gotha as an Empress, he picked on India. Consequently, the Governor-General was upgraded to be a Viceroy. He had enormous powers, not least because he was a very long way from head office in London.
Until the arrival of the telegraph, communications were letters carried by the Royal Navy. In turn, the district commissioners were in a similar position, their communications were necessarily slow, even tedious, especially during the monsoon.
Gradually, telegraphy and the radio cut down that freedom and discretion. London and New Delhi tightened their grip over the administration of India. So that by the time of Independence, communication with London was reasonably effective. Mr Attlee was able to exercise much closer scrutiny than had Mr Gladstone.
Today, a telephone call that you make to an 800 freephone number in an English speaking country is quite possibly and increasingly probably answered in Bangalore or Hyderabad. It is simulacrum of a call centre in Leicester or in Boston. The staff will have watched the news reports and the weather forecasts for the country whose calls they are answering. You may never know that your call has been answered by a graduate of a leading Indian university.
It is important to realise just how keen India is to get more call centres and other IT-enabled services. It will take as many as it can get. It will fight off competitors to keep its existing market and do all that it can to get more.
India is also making considerable progress in the opening of software development centres.
It is a wonderful anti-colonialist twist that India can now take work away the UK and the USA.
In the last few years we have heard a lot about the "new economy". It was that period when the US economy moved to a higher level of growth, which it sustained through most of the last decade. The productivity gains did not come from all sectors of the economy equally. In the late 1990s six sectors made 99% of the contribution to productivity gains:
Economists are still struggling to understand how the recent recession in the USA effects the new economy. What is very clear is that the financial markets have changed their attitude to ICTs.
The dot com boom is gradually being seen with a little perspective, as that happens it becomes one of a number of unpleasant outbreaks of mass hysteria which characterise the behaviour homo economicus. Times where rationality are cast aside in favour of greed. The leading examples were:
In order to understand the dot com craze, Jens Arnbak, a professor of
telecommunications and not of English literature is advising people to
read We way we live now. It is a novel by Anthony Trollope not about
the building of railways, but about the selling of shares in companies
which might or might not build railways. Speculation is the way of life
that Trollope describes, combined with the unscrupulous and sometimes criminal
exploitation of it.
Cybercrime
We are asked to consider new forms of crime:
Governments have the task and obligation to make sure stricter laws with regards to ICT are enforced to prevent internet-crimesThe overall policy framework for this is set out in Resolution 55/63 adopted by the General Assembly of the United Nations, Combating the criminal misuse of information technologies. This:
Expressing concern that technological advancements have created new possibilities for criminal activity, in particular the criminal misuse of information technologiesThere is relatively little dispute about the need to tackle innovation and the application of ICTs to crime. However, it is much harder to define what this means or how it should be done.
A particular problem is that crime becomes trans-national. It is performed not in one country, but across borders. This highlights the differences in:
As an example of differing legalities and moralies consider race hatred. Article 20 (2) of the United Nations International Covenant on Civil and Political Rights says that:
Any advocacy of national, racial or religious hatred that constitutes incitement to discrimination, hostility or violence shall be prohibited by lawThe United States of America has an unchanged Amendment to its Constitution from the eighteenth century granting a virtually unqualified right of freedom of speech.
Now, many Europeans are able to hide behind that "right" by placing web sites concerned with racial hatred on the other side of the Atlantic, even when they are clearly aimed at European audiences. They exercise the right, without any corresponding duties as citizens. While the countries where they are citizens are precluded from exercising their laws.
It seems strange in this city of all cities to have to wonder why statements of racial hatred might not be considered unlawful. We are so very close to the Olympic Stadium and to the street comemorating that great sprinter, Jesse Owens.
In this instance we have a trans-Atlantic divergence of view. There are dozens of other examples of divergences between countries around the world.
These were much less evident until we had ICT-enabled crimes.
Some law enforcement officers want the equality with criminals, the ability to operate across borders.
There is a need for a long and profound public debate about the measures necessary to support this.
We live in a world where what we see no longer needs to be real. Josef Stalin had individuals carefully and painstakingly removed from pictures. Today the motion picture companies in Hollywood are looking to the cost savings of raising the dead to make new movies. Jimmy Cagney and Sir Charles Chaplin may yet return to our screens.
Another example from the USA concerns morphing. That is the use of computer software to change images. Recently, the Supreme Court had to consider the legality morphing of images of small adults to make them look like children engaged in sexual acts. It becomes necessary to shift from making laws to proscribe images and movies of illegal acts to make it illegal to portray those illegal acts.
One of the most contentious questions concerns the retention of data. How long should a telephone company, a GSM operator or an ISP retain data in the event that the police or secret services wish to view it. The data protection people say only so long as is necessary to send you a bill and to allow you to challenge that bill. Some of the law enforcement people argue for periods from one to ten years.
In addition to cost of such storage and, of course, of eventual retrieval,
there are the questions relating to civil liberties. Remember, that with
3G it may be recording not only the URL you are looking up, but the location
at which you are doing so.
A global workforce
Several issues are up for consideration in terms of the workplace and the workforce:
Does globalisation change the workplace for all employees, or does it only involve the management?California has two vital centres, Silicon Valley and Hollywood. They reinforce each other. However, the image and the myth come from Hollywood.
Does the world need a international workforce?
Is there really such a thing as an international labour market?
If you ask a German to go to Munich for a high-tech job he will tell you it is not in Germany, but Bavaria. Outside Germany your response will be only slightly more positive. If you offer a job in Santa Clara people ask when the plane leaves. That is the difference.
There are locations where people will go to live and we have to accept
that.
The application of ICTs in the work place takes me back almost twenty years to the days of "office automation".
There were a variety of tasteless jokes at that time about the relative probabilities of the paperless office and the paperless toilet. Of course, the toilet got there first and the capability is being added that it can perform basic health checks.
How does ICT influence the workplace as such?As I indicated earlier we are seeing work being taken to distant places, such as the call centres in India. We are also seeing individuals being enabled to work anywhere on the planet.
To what extent do we 'think global, act local?'
One crucial constraint cannot be over come. I have regular global conference calls and some lucky person is always on the call just before going to bed and another just after getting up.
A key question for you is whether you want to run away to California
or want the work to come to your home?
We are asked to address two areas of assistance. The first concerns
the Accession Countries and the second companies in the sector.
Accession countries
There are long negotiations under way with a number of countries seeking membership of the European Union. We are asked to consider the possibility of:
It is a shared responsibility of the West and Centre/East of Europe to modernize the structure-poor IT sectors in the EU-accession countries.There have been a number of projects to assist accession countries, such as eEurope+ and PHARE. The Accession Countries are already present at all the major European Commission committees and have begun to play a role. They are also working to bring their regulatory regimes towards the acquis communitaire. It is a slow process, but much less contentious than in other areas.
We have seen dramatic increases in teledensity, both fixed and mobile. There is a long way to go, but much of the historic legacy has already been overcome.
One of my colleagues on the panel will address this issue in more detail
tomorrow, so I will leave to him
Assisting companies
The European Union and the European governments have the responsibility to help companies that have suffered from the quick liberalisation of the telecom markets.I am afraid that I find this notion deeply offensive.
Let me quickly add, that there is a very different case and some very powerful arguments concerning help offered to individuals. I will return to that issue in a moment.
In the first instance, all steps towards liberalisation in the European Union have been signaled well in advance. Some countries had derogations, though some voluntarily gave these up or shortened them.
The operators, led by ETNO, fought the sort of rearguard action that would make a classic military campaign. Let me highlight just the issues from the unbundling of the local loop, a move approved by European Union heads of government to bring you broadband, always-on Internet access in your homes.
Local loop unbundling means that competitors have to share with the incumbent operator the copper wires from the local exchange to your house or apartment. Some operators claimed they had so space for the equipment of rivals. Some required insurance of the equipment and the staff. After 9-11 they asked dark about the security clearance of the individuals concerned, implying they might be planning to bring Western civilisation to its knees by sabotaging telephone exchanges. Sometimes it was more prosaic, the person with the key was off sick. Sometimes they refused to allow staff from rival firms to use the toilets.
The Director-General for the Information Society, Robert Verrue, has conceded that the European Commission had underestimated the capacity of the incumbent operators to delay the execution of this policy. He referred to the sportif tactics of the operators. Others call them bloody-minded or are taking action under competition law.
Despite or because of liberalisation, the incumbent operators are bigger and stronger. Often they are also meaner and nastier.
One example, is that Belgium will soon overtake the USA in broadband teledensity. However, it will lag South Korea for some years. South Korea is very much the global leader in broadband teledensity.
The operators have also exerted pressure on politicians to protect them. One of their core competences is manipulation of the political process.
Without the allegedly damaging effects of liberalisation the prices that you pay would have been kept higher for longer.
There is a long list of violations of Articles 81 and 82 of the Treaty of Rome. There are findings against operators and against member states.
For those of you sympathetic to propping up the mobile operator, let me tell you a secret.
The transmission of an SMS text message costs the operators something extremely close to nothing at all. The service was built into GSM for technical signaling. They had to have it for the handsets to work. The only question was whether or not to allow customers to use the service.
Pushing even very large numbers of text messages through the GSM network is done at almost zero incremental cost. The costs come from expensive billing software and marketing campaigns. Concerted price increases.
Anyone planning to get a 3G handset from their employer had been apply to operators or to companies in South Korea and Japan. There are no companies in Europe planning to buy 3G services for several years. Many are already looking to other technologies.
Just a few days ago, the International Labour Organisation (ILO) organised
a tripartite meeting on employment, employability and equal opportunities
in postal and telecommunications services, in Geneva 13-17 May. As preparation
for this, the ILO secretariat produced a very detailed report on Employment,
Employability and Equal Opportunities in Postal and Telecommunications
Services.
I think we have some very tough issues here and I do not imagine that we are going to agree, even if we had time. That is a good thing, since it forces you to decide which side of the various arguments is correct.
It also forces the panel to produce evidence to support their arguments. Assertion is not going to work in an area of such profound changes. There are no historical certainties.
Some of these issues are the sorts of topics that might make a book or a doctoral thesis. We do not have that much time today and I have already spoken too long.
We have also to remember that we cannot exercise as much control as we might wish. Technologists and entrepreneurs have an unpleasant habit of springing surprises on us. New technologies or new uses of existing technologies make life more exciting. Amongst those entrepreneurs are some criminals.
Consumers respond in quite unanticipated ways, as they did with the wild and quite unexpected growth of SMS.
We cannot predict how the uses of technology will interact with mobility over the coming years. Will we stop going to work and the work will come to us.
Clearly the existing members of the European Union have responsibilities to those countries seeking accession to the treaties. That process is underway and many changes have already been made. In information and communications technologies this is easier and less contentious than in many sectors, notably agriculture and the freedom of movement of people.
We also have responsibilities towards less economically developed countries. The question is how to exercise these responsibilites effectively and responsibly.
I will put the text of my remarks on our web site at www.intug.net
Thank you very much for your attention.
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