The bait hides the hook

— Like an algae that tends to take over all available space, Telefonica has now firmly set foot on the so-called digital platforms in Spain, the one backed by the Government and the one designed by the private group PRISA (publisher of El Pais newspaper), which other companies joined, in particular Antena 3 TV. Although the initial objective of both platforms is television, they include, in the medium term, data transmission via satellite and cable. So, Telefonica, at a pen stroke of 70.000 million pesetas, has become operator, content owner, broadcaster and quite a few other things that will be left in this user’s inkpot, though they are certainly recorded in the company’s logbook. What we have here is, undoubtedly, another phase in the evolution of telecommunications companies which we usually only attribute to corporations in more developed countries. Perhaps, for this reason Telefonica’s bursting onto the digital television scene has taken some people in Spain by surprise, especially some politicians and business people whom one would have assumed were better informed not only about the possibility of this operation, but also who they were dealing with. In other words, the first and (practically) only Spanish transnational which is starting to fit in better and better with the cultural particularities of corporations of its ilk. However, it is not only those who have to do battle with them at board meetings, but the ordinary internaut as well, who should remember to treat them with the caution needed for dealing with a member of the shark family whose biological and business culture they share: in the stormy seas of telecommunications nothing is more trustworthy than a sharp set of teeth, the ability to move very quickly and a timely bite to warn dozy navigators. The Spanish government will play guardian angel as far as its protecting hand will stretch, which in certain regions will be no short distance.

I will never forget the then president of Telefonica, the ineffable Cándido Velázquez, stating at a press conference in 1991 (the height of the monopolistic era of Socialist rule) at Telecom in Geneva, “Telefonica is in favour of telecommunications thriving and diversifying. Our aim is to be present in all sectors, old and new, and to be the major partner in them always. And, if possible, the only one.” No sooner said than done. The only thing is that being the only one these days is becoming more and more difficult. Being the major partner in the chain of telecommunications events where it already possesses the infrastructure —or can acquire it– is an obligation, in accordance with the corporate rules of transnationals.

That has, perhaps, been a miscalculation on the part of those who, in a display of great ingenuity, never thought that Telefonica was the company that was really under threat from the agreements being spawned by the digital platforms. One way or another, these opened up holes in the side of the Spanish telecommunications ship. Holes which could be used by the competition, particularly ATT, Deutsche Telekom, France Telecom or the Italian company Stets, not to mention those in Spain such as Retevisión and cable operators (all of them powerful enemies on paper, but also potential allies). The telecommunications market has let its amiable (never friendly) mask of public service to the welfare State fall, only to adopt the rough gestures of fierce battle in order to dig itself a trench in the sun.

These changes are bound to have increasingly direct repercussions on users, particularly those in cyberspace. Next year, Telefonica will break into the world of cable not just in television but rather to consolidate the initiatives being prepared for transmitting Internet this way. According to the Minister of Development, Retevisión as well as other telephone companies that will operate in Spain (amongst whom are the cable companies) will be able to establish their own Infovias. Although the decree promised for July has still not been approved, the watchdog committee of Spanish telecommunications (made up of Fomento, Telefonica and the corporate management of this sector) are preparing the legal body which will lift the ban on the hunting season so that the second telephone company (Retevisión), other PTT and Internet service providers –or whoever wants or is able to– can establish their own Infovias with their own access numbers, supply services and rates, all of which will only be available in a years’ time. By that time, Telefonica’s Infovia will have contributed 4.000 million pesetas to the coffers of the company. A very tasty morsel. Even more if the different operators agree to “sanctify” the present policies of Telefonica: making local calls more expensive ( where consumption is on the increase thanks to Internet) and competing openly in other segments of telecommunication services.

The profits of these policies are already obvious not only in Infovia, but also in what we could call “virtual cities à la Telefonica“, which bear no relation to citizen Nets, despite the similarity of their names. In Spain, the first prototype — christened with the noble “Spanish” name of Infoville— is being tested in the town of Villena in Alicante. With only 21% of its 5,000 homes fully connected so far to this local Net to access municipal, commercial and industrial services, telephone consumption has tripled in the last four months and by autumn the figure is expected to multiply by five. The project has already been extended to Catarroja, Vall d’Uixó and Torrevieja and will be established in three more towns next year.

In other words, what we are witnessing is a mild skirmish compared to the battle which is looming on the horizon. Initially, as all good liberals always say, the presence of various competitors can only be a good thing. But, with Telefonica and the other corporate sharks lurking in the ocean of bits, the first to blink is bound to get bitten where it hurts most.

Translation: Bridget King.