 | Issue: | Latin America III 2001 |
| Article no.: | 12 | |
| Topic: | Convergence: From Irrational Exuberance to Rational Opportunities | |
| Author: | H.E. Pimenta da Veiga | |
| Title: | Minister | |
| Organisation: | Communications, Brazil | |
| PDF size: | 24KB |
About author
Not available
Article abstract
Neither the computer, the telephone, the television nor the written word are universal privileges. The Internet, too, is limited to less than 10 per cent of the world’s population. Today’s economy is based upon knowledge, propagated electronically, principally by the Internet. One of Brazil’s biggest challenges is to promote the social, economic and digital inclusion of its citizens. Consequently, Brazil established sectorial goals for the mandatory universalisation of Internet access as well as programmes to develop and finance low-cost computers for access.
Full Article
The classical science fiction movie 2001: A Space Odyssey, shot in 1968 by Stanley Kubrick and based on the ideas of the writer and astronomer Sir Arthur Clarke, is an exercise in futurology. In the world they imagined at the beginning of the 21st century, a powerful and ubiquitous computer named HAL (letters suggesting IBM) would be able to make decisions by itself and even eliminate those that disagreed with its ‘ideas’. The prophetic date has arrived, but there is no evidence that we will have machines in our homes and offices with such human capabilities. Artificial intelligence is far from reality, except in Hollywood. In terms of robotics, mankind is far from the prophecies of the 1960s. In the telecommunications field, however, extraordinary advances are already part of our daily lives. We owe this to the almost inconceivable advances in mobile telecommunication technology and the astonishing applications of the Internet. The Internet is the most comprehensive source of information available to man. It allows us to understand our environment, to think and react with increasing rapidity. Just as neither the computer, the telephone, the television nor even the written word-with us for more than six thousand years-have yet to become universal privileges, the Internet, too, is a privilege of the few. Internet access is limited to 500 million users-less than 10 per cent of the world’s population-most of whom are concentrated in the northern hemisphere. Nevertheless, the number of people that can use the Internet-an increasingly necessary tool for their, and their nations’ access to development-will certainly grow. This growth in access is being encouraged by public administrations and regulatory agencies. These have established obligatory goals for telecommunications companies and the like, regarding the universalisation of access to the Internet. Less expensive, more convenient devices resulting from technological convergence will also facilitate citizen access to the Internet. Technological convergence makes it possible to access information anywhere, exploiting a variety of electronic devices-or a single one that combines the functions of three or four. These devices will access voice, Internet, Voice over IP (VoIP), video over ADSL and video on demand. Through our digital TV sets we will receive data, listen to songs, shop, exchange instant messages and whatever else our imagination and digitalisation will allow. Recently, we heard surprising news of the merger of a huge media content producer with an Internet provider. In the next years we may see the emergence of bigger companies that will control content and digital access by computer, TV and mobile devices. A convergent network is likely to have a scale equivalent to that of the public telephone network; this will result in great technological and, principally, regulatory challenges. Fernando Pessoa, one of the great names in Portuguese literature once said, “Half of me raves, half of me ponders”. It is worthwhile to reflect upon the environment that will result from convergence. Will we still need personal contacts to close a deal, or will teleconferences replace them? Will huge offices still be useful, or can we stay at home working and interacting with the same efficiency? We may be facing the advent of a new paradigm for our daily lives: the concept of relativity. Each change in a basic paradigm brings crises, as Thomas Kuhn said in his The Structure of Scientific Revolutions. The use of computer, and of the Internet, happened too rapidly to be assimilated; because of this, there is resistance from those averse to technological development. Charles Chaplin, for instance, was the last to start making ‘talking’ films. Many writers prefer an old typewriter to the resources of a computerised word-processor. Technological convergence, increasingly present in our lives, will redefine our concepts of space and time. The concept of productivity will suffer a fundamental transformation. Today, thanks to Internet, and in the near future thanks to convergence, we will be able, at any time from any place, to send messages, data and images to any part of the planet, be it by fixed terminals or mobile devices. If that side raves, this one ponders. Perhaps it is time to analyse the relationship between what the information technology industries put on the market and the technologies that people are really willing to use. The recent crisis in the world market, apparently generated by the slowdown of the North American market for technological novelty, shows us that technology, in and of itself, does not generate demand, hence the need to astutely judge market trends. There is no doubt that we are living at the beginning of the Digital Era. It is unanimously recognised that the economy is increasingly based upon the intensive use of knowledge, propagated by wire and radio waves, of which the Internet is the foremost instrument. It is though, perhaps, too early to believe that political and economic circles will guide their destinies exclusively by technological development. In the 1990s, the American economy experienced outstanding growth: great job offerings, investment opportunities with rapid and safe return and low inflation. Alan Greenspan, President of the Federal Reserve, coined the expression ‘irrational exuberance’ to designate this period, which contradicted economic theory, characterised by a substantial increase of rates in economic growth and productivity, rising salaries, declines in unemployment and low inflation. The values of rents, business mergers and acquisitions, sales of sites and applications exploded. The unchecked expansion of business gave birth, in the last 18 months, to 295 communications companies in the USA devoted to the building of optical fibre networks, routers and switches, among others. The expansion during this phase seemed endless or, according Russian economist Nikolai Kondratieff’s theory of alternate cycles of prosperity, recession, depression and upturns, it would last at least 25 years. The cycle we just experienced was quicker. The slowdown of the American economy, as a function of the slowing demand for high-technology products, have weakened stock market indices, especially the Nasdaq, and has reduced investment portfolios, easy financing and low costs. The wages of North American Information Technology workers have suffered an average cut of 6 per cent compared to last year. The bursting of the bubble of technological consumption in the USA has scattered throughout the world. Some analysts claim that the United States is going through a ‘technology fatigue syndrome’, a well-known expression coined by John Dvorak, an information technology columnist. The American PC market grew 28 per cent in 1999 and 11.6 per cent in 2000, but in 2001 sales have already dropped 11 per cent compared to a year ago. There was a 15 per cent reduction in the use of the Internet during the last year. By mid 2001, the world economy registered 82,700 layoffs at the nine biggest ‘technology’ companies. In Brazil, we went through an adaptation, due more to the world crisis and global budgetary compensation than to a reduction in the domestic market which, conversely, continues to show signs of growth. The factors that differentiated us from the global market were: – The expansion of telephony networks, anticipating obligatory quality and universal service targets, in preparation for the new regulatory environment scheduled for 2002. The operators’ infrastructure investments reached US$9 billion in 2000. Even though investments this year should be 10 per cent lower, total expenditures by the telecommunication sector of US$11 billion are expected. – The auctions of the Personal Mobile Service concessions (bands D and E) generated huge purchases from equip-ment suppliers by the victorious groups. – Investments in the universalisation of basic telephony and Internet access by telecommunications companies and the Brazilian government. In this regard, Brazilian society is undergoing a huge national mobilisation. A large fast food chain, for instance, installed Internet access points in 51 of its shops in Rio de Janeiro and São Paulo. In the twelve months prior to May this year, revenues in Brazil’s electronic appliances sector increased by 22 per cent to R$26.5 billion, mostly due to the performance of the telecommunications and information technology sectors, which grew, respectively, 50 per cent and 15 per cent during the period. Brazil, like most of Latin America, entered late upon the stage of industrial predominance in the 1950s. Cepal (the Economic Commission for Latin America) calls it, for that reason, a ‘delayed industrialisation’ country. It is our obligation not to let the same delay occur in the Digital Era, in these times of the Internet revolution. Alert to these transformations, Brazil’s Federal Government determined that the private-sector companies that took control of the formerly state-owned telecommunication system must conform to ambitious goals for quality and universalisation of service. To complement these goals, the Brazilian Government launched FUST, the Fund for the Universalisation of Telecommunication Service. The first FUST-sponsored programme addresses educational needs; it will distribute computers to 13,000 schools and will ‘connect’ 7 million students in public high schools. The Government also launched its Information Society Programme as a means to universalise Internet access. The programme will, among its many accomplishments, provide all citizens with Internet access through public organs. In addition, the Federal Government is working with research institutions, universities and private IT companies to develop a low-cost computer terminal to be sold through a subsidised payment scheme. The purpose of this simplified PC, with simple software, is to give citizens their first contact with the worlds of information technology and the Internet. This way, millions of Brazilians will be given the opportunity to navigate the worldwide computer universe. The introduction of new, efficient production techniques and the constant technological modernisation associated with the opening of the country’s economy at the beginning of the 1990s led to an influx of foreign capital and companies. All this, together with the privatisation of state-owned companies, has increased the average productivity of the Brazilian economy. According to recent studies by the IPEA (Instituto de Pesquisa Econômica Aplicada)-Brazil’s Institute of Applied Economic Research-one of the bottlenecks of the Brazilian economy continues to be its inefficient infrastructure, the infrastructure needed to potentiate investment and labour. In the field of telecommunications, the reorganisation and the privatisation of the state-owned system are examples of how difficulties in the outdated Brazilian telecommunications system were successfully overcome. Telecommunications today drive development and are no longer just a consequence of it. Even so, the challenges are enormous. One of the biggest challenges that Brazilian society faces is to promote the social, economic and digital inclusion of its citizens. Conclusion Brazil currently has approximately 43.8 million fixed telephone lines in service. There are already more than 26.12 million mobile phones in Brazil. The number of fixed telephone lines in use by Brazil’s lower middle class (class C) grew 120 per cent. In the lower classes (classes D and E), fixed telephone lines increased by 638 per cent. The number of public payphones jumped from 600,000 to more than 900,000. The number of mobile and fixed telephones is expected to exceed 100 million by 2005. In June this year, according to the Ibope (Brazilian Institute of Public Opinion and Statistics) eRatings, Brazil had 11.3 million Internet users. It is estimated that, by 2006, Brazil will have 42 million Internet users; the greater part of this growth is expected to come from lower-income users (classes D and E). The universalisation of Internet access, targeted by the government’s FUST and Information Society programmes, should increase these numbers even more by including a growing share of Brazil’s population in the digital era.
