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Deregulation trends and policies in France
Report Deregulation trends and policies in France
0
Although the debates challenging monopoly in telecommunications, and promoting deregulation as the alternative, have become the classic method of analysing the industry, deregulation trends in France cannot be approached so simply. This report focuses on some of the features of the French monopoly, and presents a hypothesis on the direction deregulation could take in France.
The now-classic economic debate based on contesting the public monopoly in the telecommunications industry tends to impose a reductionist approach on the economic stakes, linked to a new situation which could be predicted or even imported from foreign countries. Such a reductionist view does not allow one to take into account the entire impact of the deregulation trend in France.
0
0
following its own path towards this mythological situation of competitive markets. The speed and direction of that move depends on at least three elements:
0
This kind of approach tends to reduce the analysis to only one economic dimension, focused on market structure (monopoly 1’ competition). It neglects other dimensions of the problem, particularly the strategic and political ones, so important for a country involved in the dynamics of the European Economic Community. Focused on the rules of competition, this approach reduces the political environment to competition policies, as if other components such as industrial policies (inherited from a long tradition in France) were not relevant to the telecommunication sector.
0 However, the analysis could be focused on the economic conditions of the evolution from a traditional market structure towards a competitionbased market structure. France, like any other national economic system, is
308
It is very difficult to destabilize the legal monopoly, the French DGT (Direction Generale des Telecommunications). The DGT. within 10 years (197% has succeeded in X5). fulfilling the political goal of raising the country’s standards of telephone equipment and service to those of other developed countries. In doing so, it gained an important technical and financial legitimacy. The French videotex/minitel strategy is viewed as a success for the DGT, combining the advantages of monopoly in network supply and the advantages of private initiative in communication service supply. The ISDN strategy is seen as a national challenge that could require endorsement by powerful economic actors. The traditional relationship between the national network operator and national manufacturers is being broken and reshaped. With the merger of CGE and ITT’s telecommunications activities through the formation of
ALCATEL NV and the entrance (once again) of Ericsson into the French national public switching market. the national telecommunications industry is looking for a new equilibrium, beyond the constraints of international competition and European Community policy. The rules for sharing the valueadded produced by the sector under constant negotiation. The experience of IBM trying to enter the packet-switched market through its joint venture with PARIBAS (an international French bank) and SEMAMETRA (an information system provider) is one of many examples showing the uncertainty about new rules on value-added services. The long hesitation about new rates and tariffs for the ‘kiosque’ videotex system is also of interest.
These are at least three reasons why the monopolistic structure in telecommunication network supply is likely to be maintained. (This is despite the fact that, with conservative parties in government, the current political environment offers a good opportunity to anticipate an evolution towards a more liberal scenario. The PTT minister did try to introduce some competition into telecommunication markets; however, he did so mostly in peripheral activities of the DGT.)
0
0
0
In cable, local government have the option of having their network provided by a constructor other than the DGT, but this does not seem to be of much concern. In the radio mobile market, technical difficulties in radio spectrum facilities seem to stop any evolution towards competition. In public call box activity, so far almost no competitor has made public a will to enter the market.
So far, every attempt at ending the monopoly has shown its limits very rapidly within the present context of telecommunications business in France. In order to prepare what is so far a
TELECOMMUNICATIONS
POLICY
September
1987
RepporrlConferetm report
hypothetical law, the PTT minister charged an internal organization, ‘La Mission a la Reglementation’, with preparing different possible drafts, and with organizing public debates on economic and strategic topics related to the deregulatory trends. These public debates, held in March and May 1987 in Paris, showed clearly that there was not much pressure in France to deregulate. the international context Firstly. now does not promote a dominant competitive model as obviously as it did two years ago; even in the USA. the deregulation trend is beginning to show its limits in terms of the structure of the competitive market. Secondly, there is some difficulty in imagining a change in the DGT’s public administration status and a dramatic evolution towards a still unknown alternative. In that situation. there are two comparative European scenarios:
l
The duopoly the UK.
0
The strong monopoly settled in FR Germany.
model
as settled model
on as
If a new law on telecommunications is it may promote an inproposed, termediate situation with a precisely delineated duopoly, competition in value-added services supply. and a still dominant actor, the DGT. But these are only conjectures. Perhaps one will have to wait until the 1988 political elections to see any dramatic changes in French telecommunications.
Jacques Arlandis IDA TE Bureaux du Polygone Montpelier, France
Conference report Communications scholarship reviewed Joint Session of the International Communication Section of the International Communication Association (ICA) and the international Association for Mass Communications Researchers at the ICA Conference on ‘Ecology of Communication’, Montreal, Canada, 21-25 May 1987
At the 37th Annual Conference of the International Communication Association (ICA) held in Montreal. Canada, in late May 1987. a special joint session of the International Communication Section of the ICA and the International Association for Mass Communication Researchers (IAMCR) addressed the history and current state of international communications research. Professor Hamid Mowlana of The American
University organized the panel which brought together leading scholars from four countries. including: Gertrude Robinson, McGill University, Canada: George Gerbner, Annenberg School of Communications, USA; James Halloran, University of Leicester and President, IAMCR, UK; Herbert Schiller, University of California, San Diego. USA; and Tapio Varis, Rector, United Nations University for Peace, Costa Rica. To a large gather-
TELECOMMUNICATIONS
September
POLICY
1987
ing of conference participants. the panelists provided a wide ranging. critical assessment of the fundamental assumptions guiding (US) international communications studies. and the achievements and shortcomings of work in the field over the past 40 years. Mowlana and Schiller traced the roots of US international communications research to the burgeoning military-industrial-academic complex in the years immediately following World War II. Mowlana reported that private foundations. including the Ford Foundation. funded early postwar studies and research programmes undertaken at major educational institutions such as the Massachusetts Institute of Technology and Columbia University. According to Schiller’s research. international communication studies throughout this period were also underwritten by, and performed for. the US government, military and intelligence agencies in particular. According to Schiller. the perspective guiding early international communications research paralleled two overarching objectives of post-war US foreign policy: to halt and, if possible. reverse the growth of socialism: and to incorporate the newly independent nations of the Third World into the then US-directed global market economy. He cited the involvement of many leading communications scholars in the activities of the US Air Force, the US Information Agency and the Voice of America as examples of the influence of anticommunism in the emerging field of communications studies. Quoting Daniel Lerner, a leading figure in development communications, Schiller argued that ‘development [communications]’ ideology and procedure’ responded to ‘postwar decolonization’ und to the expansionist objectives of US business interests. Combating socialist developments and advancing ‘modernization’ - as defined by US interests - in the new nations of the Third World, maintained Schiller. were (and remain in decision-making ing principles
circles) of post-war
al and development
the organizinternation-
communications
scholarship.
309
0
Although the debates challenging monopoly in telecommunications, and promoting deregulation as the alternative, have become the classic method of analysing the industry, deregulation trends in France cannot be approached so simply. This report focuses on some of the features of the French monopoly, and presents a hypothesis on the direction deregulation could take in France.
The now-classic economic debate based on contesting the public monopoly in the telecommunications industry tends to impose a reductionist approach on the economic stakes, linked to a new situation which could be predicted or even imported from foreign countries. Such a reductionist view does not allow one to take into account the entire impact of the deregulation trend in France.
0
0
following its own path towards this mythological situation of competitive markets. The speed and direction of that move depends on at least three elements:
0
This kind of approach tends to reduce the analysis to only one economic dimension, focused on market structure (monopoly 1’ competition). It neglects other dimensions of the problem, particularly the strategic and political ones, so important for a country involved in the dynamics of the European Economic Community. Focused on the rules of competition, this approach reduces the political environment to competition policies, as if other components such as industrial policies (inherited from a long tradition in France) were not relevant to the telecommunication sector.
0 However, the analysis could be focused on the economic conditions of the evolution from a traditional market structure towards a competitionbased market structure. France, like any other national economic system, is
308
It is very difficult to destabilize the legal monopoly, the French DGT (Direction Generale des Telecommunications). The DGT. within 10 years (197% has succeeded in X5). fulfilling the political goal of raising the country’s standards of telephone equipment and service to those of other developed countries. In doing so, it gained an important technical and financial legitimacy. The French videotex/minitel strategy is viewed as a success for the DGT, combining the advantages of monopoly in network supply and the advantages of private initiative in communication service supply. The ISDN strategy is seen as a national challenge that could require endorsement by powerful economic actors. The traditional relationship between the national network operator and national manufacturers is being broken and reshaped. With the merger of CGE and ITT’s telecommunications activities through the formation of
ALCATEL NV and the entrance (once again) of Ericsson into the French national public switching market. the national telecommunications industry is looking for a new equilibrium, beyond the constraints of international competition and European Community policy. The rules for sharing the valueadded produced by the sector under constant negotiation. The experience of IBM trying to enter the packet-switched market through its joint venture with PARIBAS (an international French bank) and SEMAMETRA (an information system provider) is one of many examples showing the uncertainty about new rules on value-added services. The long hesitation about new rates and tariffs for the ‘kiosque’ videotex system is also of interest.
These are at least three reasons why the monopolistic structure in telecommunication network supply is likely to be maintained. (This is despite the fact that, with conservative parties in government, the current political environment offers a good opportunity to anticipate an evolution towards a more liberal scenario. The PTT minister did try to introduce some competition into telecommunication markets; however, he did so mostly in peripheral activities of the DGT.)
0
0
0
In cable, local government have the option of having their network provided by a constructor other than the DGT, but this does not seem to be of much concern. In the radio mobile market, technical difficulties in radio spectrum facilities seem to stop any evolution towards competition. In public call box activity, so far almost no competitor has made public a will to enter the market.
So far, every attempt at ending the monopoly has shown its limits very rapidly within the present context of telecommunications business in France. In order to prepare what is so far a
TELECOMMUNICATIONS
POLICY
September
1987
RepporrlConferetm report
hypothetical law, the PTT minister charged an internal organization, ‘La Mission a la Reglementation’, with preparing different possible drafts, and with organizing public debates on economic and strategic topics related to the deregulatory trends. These public debates, held in March and May 1987 in Paris, showed clearly that there was not much pressure in France to deregulate. the international context Firstly. now does not promote a dominant competitive model as obviously as it did two years ago; even in the USA. the deregulation trend is beginning to show its limits in terms of the structure of the competitive market. Secondly, there is some difficulty in imagining a change in the DGT’s public administration status and a dramatic evolution towards a still unknown alternative. In that situation. there are two comparative European scenarios:
l
The duopoly the UK.
0
The strong monopoly settled in FR Germany.
model
as settled model
on as
If a new law on telecommunications is it may promote an inproposed, termediate situation with a precisely delineated duopoly, competition in value-added services supply. and a still dominant actor, the DGT. But these are only conjectures. Perhaps one will have to wait until the 1988 political elections to see any dramatic changes in French telecommunications.
Jacques Arlandis IDA TE Bureaux du Polygone Montpelier, France
Conference report Communications scholarship reviewed Joint Session of the International Communication Section of the International Communication Association (ICA) and the international Association for Mass Communications Researchers at the ICA Conference on ‘Ecology of Communication’, Montreal, Canada, 21-25 May 1987
At the 37th Annual Conference of the International Communication Association (ICA) held in Montreal. Canada, in late May 1987. a special joint session of the International Communication Section of the ICA and the International Association for Mass Communication Researchers (IAMCR) addressed the history and current state of international communications research. Professor Hamid Mowlana of The American
University organized the panel which brought together leading scholars from four countries. including: Gertrude Robinson, McGill University, Canada: George Gerbner, Annenberg School of Communications, USA; James Halloran, University of Leicester and President, IAMCR, UK; Herbert Schiller, University of California, San Diego. USA; and Tapio Varis, Rector, United Nations University for Peace, Costa Rica. To a large gather-
TELECOMMUNICATIONS
September
POLICY
1987
ing of conference participants. the panelists provided a wide ranging. critical assessment of the fundamental assumptions guiding (US) international communications studies. and the achievements and shortcomings of work in the field over the past 40 years. Mowlana and Schiller traced the roots of US international communications research to the burgeoning military-industrial-academic complex in the years immediately following World War II. Mowlana reported that private foundations. including the Ford Foundation. funded early postwar studies and research programmes undertaken at major educational institutions such as the Massachusetts Institute of Technology and Columbia University. According to Schiller’s research. international communication studies throughout this period were also underwritten by, and performed for. the US government, military and intelligence agencies in particular. According to Schiller. the perspective guiding early international communications research paralleled two overarching objectives of post-war US foreign policy: to halt and, if possible. reverse the growth of socialism: and to incorporate the newly independent nations of the Third World into the then US-directed global market economy. He cited the involvement of many leading communications scholars in the activities of the US Air Force, the US Information Agency and the Voice of America as examples of the influence of anticommunism in the emerging field of communications studies. Quoting Daniel Lerner, a leading figure in development communications, Schiller argued that ‘development [communications]’ ideology and procedure’ responded to ‘postwar decolonization’ und to the expansionist objectives of US business interests. Combating socialist developments and advancing ‘modernization’ - as defined by US interests - in the new nations of the Third World, maintained Schiller. were (and remain in decision-making ing principles
circles) of post-war
al and development
the organizinternation-
communications
scholarship.
309