Wiring the World / THE NEW AGE OF GLOBAL TELECOMMUNICATIONS : Legal Impact : Laws Set Up Speed Traps on Information Highway : Some nations try to block the invasion of U.S. culture and commercial giants by restricting programs and raising prices.
The Clinton Administration’s call for a global telecommunications revolution is meeting resistance from many nations intent on protecting their citizens from everything from MTV’s Beavis and Butt-head to the invasion of such American corporate giants as AT&T.;
From Malaysia to France, telecommunications and trade officials--concerned about outside political, cultural and economic interference--have been slow to reduce regulatory barriers despite intense efforts by U.S. Commerce Secretary Ronald H. Brown, Vice President Al Gore and President Clinton himself to open foreign shores to the burgeoning telecommunications marketplace.
The very success of the American entertainment and telecommunications industry within U.S. borders “has incited a counterattack by foreign governments . . . whose aim it is to shrink the reach of American visual entertainment and to baffle the movement of our products in world marketplaces,” asserted the Motion Picture Export Assn. of America Inc. in a recent study.
Resistance takes several forms and makes uncertain the vision of an electronic global village. Australia and France, among other countries, limit the amount of foreign-produced TV and/or radio music programs that may be broadcast within their borders. Meanwhile, access to many components of the existing global information highway are often priced out of reach for ordinary citizens by regulatory red tape or is prohibited by direct government regulation.
Malaysia and China, for instance, are among several nations that ban or restrict the use of home satellite dishes to capture data and broadcast programs from other nations. And foreign phone carriers, many of which are government-owned monopolies, often keep rates for international calls originating in their countries far higher than U.S. carriers charge for the same calls originating here.
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As a result, there are about twice as many calls placed from the United States to overseas points as vice versa. Because of the complex formula for apportioning the revenue from international calls, that imbalance has spawned a $4-billion trade gap--a dollar drain exceeded only by the yearly trade deficits in the automobile, petroleum, electronics and apparel industries, according to the Federal Communications Commission.
“There’s been a lot of rhetoric” about encouraging global telecommunications competition, grumbled Vic Pelson, executive vice president and chairman of global operations for AT&T.; “A lot of folks would have you believe there are open markets” around the world, “but the facts don’t support that.”
The overseas resistance involves not only age-old concerns about trade policy and industrial development but also worries about U.S. cultural hegemony.
In a world where U.S. products like Coca-Cola, Nike shoes and Levi’s jeans already seem ubiquitous, many countries are loath to surrender their culture further to American dominance of high technology.
“Those kinds of concerns are almost endemic to state bureaucracies,” said Michael Gardner, a Washington lawyer who served as an ambassador to the International Telecommunications Union and runs a program to train telecommunications managers from developing countries.
“The new breed is intrigued by new technology but the old guard is worried about cultural imperialism; they are reluctant to invite change,” Gardner said.
Nevertheless, over the last decade, the U.S. high-tech telecommunications and entertainment industries have invaded places as remote as Borneo and as tightly controlled as Cuba--leaving their indelible imprint on indigenous musical tastes, fashion, lifestyles and even political and social causes.
“Spend a week in darkest Borneo and what you find these days are” not primitive scenes but “ . . . the latest episode of ‘L.A. Law,’ ” journalist James P. Sterba wrote after a trip in which he spotted natives with cellular phones, VCRs and other high-tech gear.
The computer operating software produced by giant Microsoft Corp. of Seattle, for instance, has been installed in more than 70% of the world’s personal computers, analysts estimate. Cable News Network and MTV are available by cable or satellite in many countries around the world.
To be sure, some nations such as Romania, Mexico and Britain, among others, say they are moving rapidly to encourage more investment by foreign telecommunications companies. And the Clinton Administration’s jawboning about the global information superhighway has helped some U.S. telecommunications companies recently score some impressive deals.
In one such pact, reported to be worth $4 billion, Saudi Arabia in May selected AT&T; to modernize its entire telephone network.
“We have absolutely the greatest interest in opening our markets to the highest technology,” said Emila Dumitru, head of international cooperation in Romania’s Ministry of Communications. “We have about 100 companies licensed to provide” cable TV service. Dumitru said cable in Romania offers such networks as CNN and MTV; two Romanian companies recently entered a joint venture with Telefonica of Spain to provide cellular phone service.
What’s more, overseas bureaucrats are not alone in their resistance to reducing regulatory barriers. U.S. regulators have also been criticized for not going far enough in cutting red tape.
It was only months ago that the U.S. government took the first limited steps to open the door for export of fiber-optic and other advanced telecommunications technologies to former Cold War enemies such as China and the former Soviet Union. And federal law limits foreign ownership interest in U.S. radio, TV and common carrier licensees to a maximum of 20%.
But U.S. officials including President Clinton, who this month called for a telecommunications summit among the world’s most industrialized nations to discuss opening markets, have now made development of a global information age a major initiative.
Clinton’s proposal, if accepted by the Group of Seven nations, builds upon overseas trips undertaken by Commerce Secretary Brown and the vice president to sell other countries on the Administration’s recipe for creating a global information superhighway.
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The three men say telecommunications development would promote political stability and help U.S. companies cash in on the more than $250 billion worth of telecommunications modernization that the Center for Strategic and International Studies estimates will be undertaken in the next decade in China, the former Soviet Union and developing nations.
While many U.S. executives support the Administration’s efforts, some point out that the effort to modernize the global information superhighway is not without risks.
Linking more people to electronic networks that provide instantaneous information and entertainment from libraries, studios and data banks around the world may seem inviting but such linkups “can make the (information) market more subject to governmental regulation,” said Neil Turkewitz, senior vice president, international, at the Recording Industry Assn. of America.
“Once things have to get distributed over government or quasi-government-controlled communications networks, the dangers are greatly enhanced that programs can be controlled” or manipulated to suit a government’s purpose, Turkewitz said.
“To the extent the information highway reduces regulation by moving program choices from (industry or government) decision-makers to consumers--that’s good,” he added. “But we don’t know how the information highway will develop.”
AT&T;’s Pelson said he is amazed at how rapidly technology and markets are changing in the face of the information highway--despite regulatory strictures.
“This industry is booming around the world,” he said. Based on his talks with government officials and industry executives around the world, Pelson added: “The notion of an information superhighway is certainly sinking in with the people I talk to.”
