Date of publication: 22/4/1997. Editorial 068.

One must draw back in order to leap better

Well, well, well, our only transnational is rubbing shoulders with the big ones! Telefonica (along with Portugal Telecom) has got its foot in the door of the Concert consortium, where British Telecom and MCI already share 27,3 million telephone lines with a turnover of 6 billion pesetas. This figure now makes these four (perhaps it’s better not to call them sister companies lest some groups feel, justifiably, angered) the second biggest telecommunications group in the world. As soon as the news broke this weekend it dredged up two memories in my mind. The first was a breakfast we had during Inet’96 in Montreal almost a year ago. Vint Cerf, one of the creators of the Internet, held a brilliant press conference on the future of the Net. Cerf, a real snake charmer, did not just address us as architect of cyberspace, but mainly in his capacity as vice-president for the Internet of the first cable corporation in the world which at the time was a power in the making in the telephone business: MCI. This company is, in addition, one of the cornerstones of the Net because a huge chunk of part of the US data network, the famous “backbone” of Internet, belongs to it.

Cerf told us that was precisely one of his main concerns: constructing a global backbone which would make it unnecessary for everyone outside the US to navigate on the Internet via the present backbone and thereby avoid the associated problems that this was creating there. He expanded on the nature of this global backbone, which would mean the beginning of specialised services within the Internet and, possibly, a breakdown of its prices depending on certain characteristics. The idea was that internauts could choose different speeds, types of activities (telephone, video, etc.) and also the kind of visits they would make to certain webs filled with all the paraphernalia of multimedia. In conclusion, he told us with a friendly smile, “Shortly Internet will be paid for, but not on the basis of connection, instead each individual will pay for the services he/she chooses on the Net”.

The other thing this news reminded me of was something much more recent and less seductive in its presentation: The Spanish government decree of 27/3/97 which authorised Telefonica’s increase in price of local calls by 10%. Our sharp “real world” commentators in the field of telecommunications (who, given the nature of their intelligent analysis, I am willing to bet have never been connected to the Net not even via a relative’s computer) have spent the last few weeks rambling on about the implications of this new rise in tariffs. Almost nowhere have I read any reference at all to the repercussions this might have on the Spanish cyberspace community. Because, and there can be no doubt about this, the new tariffs are fundamentally directed at them. Local calls represent 80% of Telefonica’s total turnover. So, when our most emblematic of companies assures us that the average use of each telephone line does not exceed 9 minutes a day, they are talking fundamentally about local calls. Well, over the last year this rate has risen to 10 minutes, a spectacular jump if we take into account that this means, amongst other things, that 215.000 users (the company had expected 42.000) made a total of 36 million “new” local calls (they expected 5,4 million) adding up to a total of 10 million connected hours (they estimated 2,2 million). These are the official figures for the use of Infovia during its first year.

In other words, and I won’t go into too much detail here because, luckily, the readers of this column are well-versed on the subject, when Telefonica managed to get an increase in the cost of local calls they had their eye on the main growth sector: the users of Internet. One might think that, basically, and as always, their only intention is to make their clients dig even deeper into their pockets. However, as this is supposedly a constant in their strategic behaviour, a person who has not been present at the company’s board meetings, and in addition, has a penchant for conspiracy theories, in general, and for those relating to Telefonica, in particular, might be inclined to think that the measure is based on other hypotheses as well. For example, that Telefonica is not that keen on a sudden rise in the internaut population. Or, at least, that they would like the use of the Internet not to increase quite so much and to redirect it to Infovia itself, where banks, large department stores, the police and governments have a vested interest in the possibilities of developing promising electronic commercial activity within a “safe environment”, where one always knows who’s who. Once these services are created and operative, the question of different tariffs for accessing Infovia as an alternative, proprietary network or as a means of accessing the Internet, i.e. Cerf’s backbone, could be discussed. If this hypothesis even vaguely approximates to the truth, it makes it easier to understand Telefonica’s recent to-ing and fro-ing. Some days they seem to be preparing the definitive launching of Hispanic cyberspace, but on all the others they use irritating measures to obstruct the initiatives of thousands of users who view with increasing desperation how their time, money and imagination are wasted by monopolistic practices so shrewdly exercised by this company in the name of free market practice.

We will have to keep a sharp eye on the next board meeting attended by Mr. Juan Villalonga, president of Telefonica, and the ethereal Vint Cerf. Although, I’m afraid, we are going to have to use our imaginations once again to figure out the reasons for the beating they will almost certainly announce, all smiles, that they are going to give us. The difference now is that Latin America will also have to join us in watching them, because the new consortium has, according to a spokesperson for Telefonica, “strong pan-American ambitions”. The question remains: apart from using their lines as though we were telephonic psychopaths, what have we done to deserve this?

Translation: Bridget King.