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Telecom Travelogues, Post II: Telecom-Media-Internet (TMI) Developments and Internet Regulation in the neo-Ottoman Empire (Turkey)

Post two in the Telecom Travelogues

Walking down the back streets of Istanbul a week ago today, Kristina and I stumbled across an amazing find: the offices of Turk Telekom tucked away in a building that had been constructed in the 1890s to replace even earlier offices that had been put into place during the submarine cable and telegraph building boom of the late-1860s.

My colleague and I, Robert Pike, write about this history extensively in our book, Communication and Empire (Duke, 2007). Following strong and historically-sensitive theories of globalization as well as those that focus on the interaction between technology and culture, we write about the relatively enthusiastic embrace of new communications technology by the leading forces in the Ottoman Empire in the last half of the 19th century.

Communication technologies were adopted reasonably quickly by the Ottoman Empire because they were seen as tools of economic development and integration into the world economy. They were also seen as rich symbols of modernity and progress. They were also seen as tools of integration for an empire still striving to consolidate its control over regions that stretched from Cairo, Egypt in the South, to Baghdad and the borders of the Persian Empire in the west, and around the Balkans up to the borders of the Austro-Hungarian empire in the north and northwestwest.

The development of telegraph lines were initially driven on by the British and French in the context of the Crimean War (1854-56). Already by 1857, however, the Ottoman’s Central Telegraph Administration had been established and work begun on a national telegraph system.

In conjunction with British investors and engineers, the Ottoman Empire’s Central Telegraph Administration set out to build a national network “from Constantinople to the head of the Persian Gulf”. Long-term exclusive concessions were signed with a variety of dubious and failed projects from the late- 1850s on before the regime finally struck a deal with what became the nucleus of the British-based Eastern Telegraph Company’s system: the company with the world’s most extensive submarine telegraph system of the time, one that ran through the Mediterranean and onto India by 1865 and subsequently to China, Japan, Australia and the rest of the Far East by the early- to mid-1870s.

The interaction between Ottoman officials and engineers, on the one side, and their counterparts from Britain and Europe, on the other, was not unique to telegraphy. Indeed, as our tour guide and local historian told us, the substantial renovations done to the Ayse Sophia during these same years also leaned heavily on architects and experts brought in from Russia and Italy. So too did efforts to write a new Constitution for the country, and for Egypt, which was brought within the relatively cosmopolitan fold of the Ottoman Empire in the 1860s, rely extensively on French and Austro-Hungarian legal experts.

By the late-1860s and 1870s, the Ottoman’s Central Telegraph Administration served simultaneously as a back-up network to the submarine cable network linking India to Britain and Europe by way of the Mediterranean and Red Sea, but also somewhat as a rival to the lines of the Eastern Telegraph Companies. Indeed, the Central Telegraph Administration’s services were substantially cheaper than those of the submarine cable colossus, but the drawback lay in the fact that the Ottoman system was less reliable and traversed the unruly ‘wild zones’ of tribal lands, thus compromising network security and a system that imperial and military administrators sought to mostly avoid.

Be that as it may, by 1871 the Central Telegraph Administration accounted for nearly 20 percent of the revenue on the Euro-India telegraph route. The telegraph was the tool of overlapping empires, but they were also the media of massive capital accumulation and cultural exchange. They were instruments of technology transfer, to use the language of our time. They were also a boon for the development of a private and commercial press in the Ottoman Empire.

As the historian of the Arabic world, Juan Cole observes,

The founding of private newspapers occurred simulataneously with the extreme speed of telegraph lines – new politics and political journalism grew tegother. By the 1860s, telegraph services allowed reception of international news through the wire services, and Otttoman and European newspapers could be shipped Alexandria and taken . .  . to Cairo and the interior (p. 112).

And as the British consul in Cairo noted in 1871, “every town or village of importance in Lower Egypt has a telegraph station”.

So, when Kristina and I were walking through the old Eminounou district of Instanbul and stumbled across an old telegraph and telephone building originally built in the 1890s, and which now advertises the availability of 100 MBps broadband Internet services on a fluttering banner outside, I was driven to see if I could negotiate access to go inside.

I’d given the chances of getting a guided tour of the facilities a one in ten shot of success, but five minutes later and we were in. Much to my surprise, a really nice young engineer fielded my entreaty, took it up with his superiors, and then took us on an hour-long tour inside. Amazing!

No pictures inside, I’d promised, because I’m not dumb and I know that all sorts of reasons, from competitive secrecy to national security, dictate a tight lid on how much information gets out. No worries, though, because I was more than happy to have just got inside. Later I was even able to negotiate a few exceptions to this rule, as we’ll see below.

The first thing one notices after walking passed the armed guard is the rows-on-rows of racks filled with equipment from Alcatel, Ericsson and, more and more as I gathered, Huawei, the Chinese upstart that has rocked the comfortable oligopoly that has ruled trade in telecoms equipment for much of the 20th century. With Nortel bankrupt, and ICTs a cornerstone of the ‘China-rising’ story, it was not surprising to see Huawei’s equipment filling rack-after-rack in the building, undoubtedly to the ‘old guys’ chagrin.

Some old Nortel digital switching equipment from the 1980s and 1990s can still be seen sitting in the racks, whirling away, but its days are numbered. As I listened to my hosts narrate a story about how Nortel had been a leading edge provider of digital telecom gear in the past, I couldn’t help but picture in my mind its former Canadian headquarters that sit not 25 kilometers from my home and how the once great company had fallen to the rapacious hands of the digital robber barons during the dot.com boom and bust that ripped across just four short years from1996 to 2000. Time, history, poof! We can learn something here.

Now, all that is left of Nortel are these old clunky machines waiting to be wound down, and a treasure trove of patents being scattered by auction on among today’s telecom and ICT leaders: Apple, Google, RIM, and so forth. Amazing what you can see from Istanbul when your eyes are wide open, and your mind as busy as can be.

The massive old building in the Eminounou district of Istanbul now dwarves the telecom gear inside. Processes of miniaturization have shrunk the space needed to house telecoms gear to a fraction of what was once required. Now, the bulk of the space in the four-floor building lies empty, just laying there dark and neglected or in some cases in the throes of being retrofitted for new equipment and purposes, as the following photo shows:

In the remaining areas where all the new and still functioning gear is held, the windows were all open but air conditioners still whirled away to keep the network switches, servers and data storage equipment cool from heat outside that hovered in the upper 30 degree range.

Crates of new equipment, most of them marked Alcatel and Huawei, lay scattered across the concrete floors of the four-floor building waiting to be opened, switched on. The 100 MBps high-speed Internet service advertised on the cheap banner hanging outside is right here, inside these boxes laying on the floor.

The advertising is, however, somewhat ahead of itself, given that only about five percent of Istanbuli business subscribers can access such high-end Internet services. However, the plans are for universal coverage of business districts across the city in the next two years. Facilities for the average Istanbuli resident, as the friendly and proud telecom engineers shepherding Kristina and I told us, will be rolled out aggressively as well, but against an unknown time frame.

Even more ambitiously from a technological sense, if not a social justice one, next generation networks (NGN) capable of blistering 10GBps information transfers are and will continue to be rolled out as part of these objectives. That is not just a pipedream, but rather could be seen in those crates of equipment lying scattered about the floor from Alcatel (France), Huawei (China) and a smattering of Ericsson (Sweden) stuff that I told you about a minute ago. In fact, some of its already in the racks.

Currently, while Internet service is relatively cheap in Turkey against OECD standards, actual levels of connectivity and use are some of the lowest amongst the OECD countries (see pp. 268-275 on prices and p. 354 for broadband Internet access levels). What takes place over the next five years or so will go a long way to determining whether those levels see a significant improvement.

Just like in the days that marked the rise of the telegraph and the commercial press in the 1860s Ottoman Empire, so too today are developments in the telecoms and Internet infrastructure fully intertwined with broad and faced paced changes taking places across the Turkish media as a whole.

Indeed, a deluge of new newspapers and television channels makes Turkey one of the fastest growing media markets in the world, according to PriceWaterhouseCoopers’ (2010) Global Entertainment and Media Outlook, 2009-2013 report (see p. 66 and also OECD CommOutlook 2011, pp. 230, 246).

Between 2005 and 2010, newspaper circulation in Turkey climbed over 55 percent in Turkey, according the World Association of Newspapers. Couple this with fast growing Internet capabilities, albeit from a low base, and there is a sense that the media in Turkey are experiencing something of a golden age, at least in industrial development terms.

This is a far cry from the hand-wringing and whinging that has taken place in many circles in Britain, Europe, Canada and the US over the past few years around claims that the media — journalism in particular — are in crisis. From my view, these cries are often overwrought, but in Turkey the idea that the media could be in crisis, at least from an economic point of view, is the furthest thing from anyone’s mind.

There’s a giant paradox in all of this, however, and one that certainly takes the glow of any claims that this is a golden age for the TMI industries in Turkey. By this I am referring to the disconnect between liberal fantasies stretching back for centuries that more media will automatically deliver more personal liberities, freedom of the press and democracy.

Global rankings consistently rank Turkey low on the scale of journalistic, media and Internet freedoms (see herehere, here and here). More media and internet connectivity, in other words, does not seem to add up to a free press. In fact, they may even subvert such things.

Deeply problematic is the stranglehold of Internet censorship that is already bearing down on all that equipment I talked about above, and which is about to get a whole lot worse next month once the new “Bylaw on the Principles and Procedures Concerning the Secure Usage of Internet” kicks into action on August 22, 2011.

The new bylaws were passed by the Turkish Telecommunications Directorate, with the blessings of the Information Communication Technology Association (ICTA) as well as the Radio and Television Supreme Court, in May of this year. The new rules set out to create a managed Turkish Internet Space bound by the rules that life online in the country shall respect and protect:

(1)  Turkish national values,

(2)  Family Structure,

(3)  Youth

(4)  Moral values.

As Eda Çataklar, a professor at the Intellectual Property Research Center, Istanbul Bilgi University states, the new bylaw has come under much criticism by many NGOs inside and out of Turkey since being passed earlier this year.

The primary flaws of the bylaws, according to Cataklar, are:

  • It is overly broad and lacks transparency.
  • mechanisms to remove URLs and banned words placed on a proscribed ‘black list’ are either inadequate or missing completely.
  • Rules governing how users establish and maintain their online profiles are vague.
  • International norms are ignored.
  • Government coercion has displaced ISPs’ own initiatives as a means for dealing with whatever Internet security problems do exist.

The push is disturbing for all of those who see communication rights as fundamental human rights. It is disturbing to a rich legacy of a vibrant and open political culture and press in the country, even if the room for manouever within that space has always been hard to decipher and tightly constrained.

The clampdown on the Internet also subverts the technological capabilities and goodwill of the staff that we met touring the offices of Turk Telekom in Eminounou. They are an affront to democracy itself, and strongly suggestive that the new Ottomanism that I heard some local professors gloat so much about during the IAMCR conference may not be as open as the Old Ottomanism of the late 19th century that I outlined above.

First and foremost, and this struck me with particular force in a way that has previously escaped me, the clampdown poses an especially harsh and oppressive threat to Lesbian, Gay, Bi, Transsexual and Transgendered (LGBTT) communities that have come out of the closet in ways that I never saw when I first lived in Turkey in the 1990s. The LGBTT community is particularly concerned that the new rules, and more specifically, its list of 160 plus banned words, will bear down hard on them and issues of sexuality as a new kind of state seeks to consolidate its power over a society in heightened state of flux.

As one person stated, if the Bylaw on the Principles and Procedures Concerning the Secure Usage of Internet prevails, “LGBTT individuals will be non-existent in the cyberworld”.

There is some hope yet that the new provisions will yet be rolled back by Turkish courts as an affront to Turkish Constitutional principles regarding freedom of expression and its commitments under European Human Rights agreements and the UN convention on civil and political rights (1966).

In the last few days while I’ve been Twittering away about these ideas in rudimentary form, one wag has repeatedly tried to tell me that the actions in Turkey are no different than those taken by governments in Australia, Canada, the US and China to regulate and control the Internet. I beg to differ.

They are much broader in scope, more opaque, and more severe than anything on offer here, although in a post that I plan to write in the next few days I will argue that things are going in the wrong direction in North America and Europe, and seem to be really coming to a head at breakneck speed in these summer days on account of:

  • the stronger push to turn ISPs into gatekeepers on behalf of the copyright industries that has gained much stronger footings in the US, Britain and the OECD countries as a whole in just the past week and the backlash against those proposals emerging from just mainstream groups (see here, herehere, here, and here),
  • the strong clamp down that seems to be occurring with respect to national security (and here)
  • the guerrilla information warfare being conducted between Anonymous, LulzSec, and a wide range of others, on the one hand, and the ‘security-state’ and military-information-media-entertainment (MIME) apparatus, on the other, are deeply disturbing (see here, here, here, and here).

Overall, standing from the shores of the Sea of Marmara and at a critical juncture in world history, one thing became somewhat clearer to me and that is, yes, what happens in Istanbul is deeply interconnected with what unfolds here. And for me, perhaps we can take some solace in the hope that the Turkish people struggle to find and secure their own freedoms, we will do the same with respect to ours, as will Internet users worldwide.

And on that point, well, we need to think of the politics of TMI issues not just in terms of whether they occur in Turkey, Canada, China or Britain, but as essential to our everyday lives wherever we live, and thus in need of the strongest recognition possible that Internet freedoms and communication rights are fundamental human rights regardless of where we stand.

On this point, there is more than a ray of hope, as some of the latest thinking about Internet access and connectivy as a fundamental and universal human right so ably and eloquently demonstrates. This is quite hopeful, actually. I hope you feel the same way, too.

Big, Brash & Bold: Drop all Telecom-Media Foreign Ownership Limits

A new report by the CD Howe Institute came out today. It’s not big, just 3 pages and seemingly informed by a bunch of guys sitting around a table at the Howe’s ‘inaugural meeting’ last week (June 17).

It is brash, and some might dress it up as bold: drop all limits on ownership of telecoms and media industries in Canada, it says. Full stop.

No phase out. No ‘newcomer advantages’, full stop again. No attempt to separate the ‘medium’ (wires, spectrum, sewer access) and the message (broadcasting, integrated suite of ‘content’ from mags to blogs) from one another. A digital free for all, you might say.

Perhaps the gentlemen, and they were with the exception of only a single woman, thought this might be a good idea while they sat around and chatted last Friday afternoon. Apparently, there were not so many women ‘law & economics’ types available to join them, given that all but out of the 16 places apparently went to the guys and boys from Bell (see below). I guess ‘law and economics’ types like Sheridan Scott, a hard liner in these matters, and Monica Auer, who generally takes the opposite tack by speaking eloquently and passionately on the telecom and media workers’ behalf, weren’t available, or any of the other smart dames roaming these circles as I saw, in the minority, at the CRTC’s hearings this week.

I looked at the composition of ‘the deciders’ not just because their gender was so obviously skewed, but because I recognized the names of most of the guys. One in particular leapt out, Jeffrey Church, a University of Calgary economics professor. By all accounts, he’s an excellent teacher. Professor Church caught my eye because, in addition to advising the ‘big 3Ps’ in Canada as I’ll call them — Petroleum, Alberta Beef Producers, Pharma — Professor Church just wrote an economic analysis for Bell as part of the very, very important vertically-integrated telecom-media-Internet hearings now being held by the CRTC.

According to Church in his voluminous 93 page submission on Bell’s behalf, vertical integration is good for consumers and for Canada (p.5). I disagree, strongly, for reasons set out regularly in this blog (e.g. here) and my column for the Globe and Mail on Monday.

It’s not just Church that is so closely tied to Bell, but also Marcel Boyer, Bell Canada Professor Emeritus of Industrial Economics, Université de Montréal, as the CD Howe report indicates on the back of this slim 3 page ‘report’. 2 out of 16 does not a majority make, obviously, but their presence does stand out.

The rest of the lot in this ‘law and economics’ crowd does not seem very adventuresome, either. I know one professor occupying a BCE endowed chair that won’t be called upon, Professor Robert E. Babe at the University of Western Ontario, for he has traced the propensity of telecoms historically to go from limited competition to ‘total consolidation’ on a regular basis.  Let us say that the fact that Howe ‘report’ has zero to say about such notions is not all that surprising.

The 3 page ‘report’ is candid that dropping the foreign ownership limits on everything – telecom, media, internet — will not increase the number of competitors in the market. As it states, “given the small size of the Canadian market, the consensus view saw no major change in the number of national competitors”.

Translation, the big three companies in wireless telecoms — Bell, Rogers, Telus — for instance will still account for about 94% of the market (according to CWTA 2010), but they might be owned by yet a larger foreign based telco (Vertizon, the ‘new’ AT&T, Deutsche Telekom, etc.) or may private equity funds. Me, I have doubts many foreign investors — telcos, priv equity funds, banks — will even come if permitted to do so (or if we want ‘em to on such ‘carte blanche’ terms). I’m not alone on this, and hardly radical, given that even the World Bank states that the keys to effective foreign ownership is a ‘strong state’ able to regulate and competition.

Instead, the Council of 15 wise men and 1 smart woman says, drawing on newfangled theory about ‘competitive innovation’ drawn from the right-wing side of Schumpeterian ‘innovation economics’, that “the gains from liberalization would likely result . . . from better performance by telecommunications market participants”. Umm, I hope so, especially because its this same crowd breying for the withdrawal of any meaningful conception of regulation or state intervention. The CRTC’s horizons have been blinkered and public ventures like CANARIE have had their wings clipped. How foreign capital will ‘improve’ performance standards in Canada is not clear to me/self-evident.

The report advocates this ‘regulatory shock and awe’ to be developed in one swell swoop, with no distinctions kept between telecoms and broadcasting, between networks and content, between incumbents and newcomers. The telecom-media-Internet sectors are now so entangled on account of digitization and how people use media that they must be treated together as a whole. Partial agreement there about treating things ‘holistically’.

More targetted measures are suggested as alternative to foreign ownership for whatever “cultural policies” might be left over. Some of these ‘targetted measures’ I believe in — securing financing for content production, shelf space, strong CBC — and they have been promoted by at least two of the same writers involved in today’s 3 page missive (e.g. see Hunter and Iacobucci, with a third author Michael J. Trebilcock).

There are several problems with this “report”, however, that make it’s contribution to public discussion dubious, despite the fact that it will gain much attention.

1. Three pages is not a report and should not be pitched as one.

2. The Council of the Wise is skewed along lines suggested above, ie. by Bell and by Gender. Bell has always had a visible hand in the telecom, broadcasting and media industries, indeed, since it began broadcasting speeches, songs and sermons in the 1880s and took-over the Chairmanship of the 1905 Mulock Commission which had originally been convened to look into the underdevelopment of the telephone system in Canada in the early days of the 20th century.

So, that Bell continues to be front and centre 100 years later, at the dawn of the 21st century, is both a marker of continuity and somewhat unsurprising, but equally suspect/problematic in each of these occasions. The presence of Bell’s hired gun (Church), a Bell sponsored ‘academic chair’ (emeritus, Boyer), and BCE CEO George Cope’s speech at the C.D. Howe two months ago all so bunched up in time and common stance has a whiff of something not quite right about it.

3. While I don’t actually have many problems with increasing competition and dissolving lines between the medium and the message, or the network infrastructure and content, we also need to be upfront about the fact that the former (media infrastructure) are generally scarce and the latter (messages) abundant. In today’s OECD Communication Outlook 2011, it is clear that, generally speaking, the top 2 ‘netcos’ in each of the OECD countries account for between two-thirds and three quarters of fixed and mobile telecom network markets in each of the OECD countries (pp. 56-59). This means:

  • that Netcos generally should be regulated for market power, ‘messagcos’ generally not.
  • ties between Netcos and Messagcos are congenitally fraught with problems and propensity for anti-competitive behaviour.
  • Free speech standards and the values of a ‘networked free press‘ are also at play (and here). As the United Nation’s Human Rights Council recently stated, those standards apply to the Internet and people should have, as Article 19 of the Universal Declaration of the Rights stated before it in 1948, the freedom to receive and impart any information, through any media regardless of frontiers. At the CRTC Hearings on vertical integration the other day, Bell’s Mirko Bibic and Shaw’s brass called the idea that people should have access to any content on any device “preposterous”. The C.D. Howe ‘report’ is oblivious to these considerations.

4. The C.D. Howe report misses reality and the ‘big picture’. Perhaps this is because there is not a whiff of heterodox thinking among the ‘law & economics’ experts who wrote it. Not one ‘ecclectic’ economists, not one wild eyed, crazy lawyer, not a communication and media scholars or a historian in sight.

This is too bad because as long as it continues to be the case, people will continue to talk past one another. And it also means that ‘reports’ like this one, and the policies and approaches that actually do follow close in tow in the ‘real world’, will lack legitimacy.

5. Without being able to expand their horizon, the authors of the C.D. Howe ‘report’ blithely countenance “North American integration”. Economically, as I said above, I don’t have a particular problem with that, although I doubt that things will pan out as they expect, and even that what the Howe folks do expect ain’t much (“better performance” from same number of players).

Politically and culturally, however, there is a problem, not with Cancon and ‘traditionalist/romanticist’ conceptions of culture, but ‘network culture’. Netcos and search engines are now closely allied with state security, military strategy and defense contractors.  It’s probably best to keep some clear blue water between these domains. The authors give no hint that they have even thought of this.

Netcos, ISPs, search engines, etc. are also constantly being badgered by lobbyists as well as politicians in Canada and the U.S. to play a greater role on behalf of  media and entertainment industries (for most recent and strong opposition to this from within just the mainstream’, see here). The approaches have differed, with the last government in Canada wisely turning down lobbyists push to have ISPs play the role of ‘copyright cop’, disconnecting people who repeatedly are identified as ‘copyright bandits’.

The International Federation of Phonographic Industries (IFPI) launched it’s efforts to lean hard on ISPs and search engines, and less on Digital Rights Management (DRM), in 2008. It has been picking off ‘wins’ for this agenda around the world, but not so much yet in Canada.

Yesterday, CNet journalist Greg Sandoval reported that AT&T, Comcast, and Verizon “are closer than ever to striking a deal with media and entertainment companies that would call for them to establish new and tougher punishments for customers who refuse to stop using their networks to pirate films, music and other intellectual property”.  That turn-of-heart, in turn, he reports, was eased by coaxing from the Obama Administration and the National Cable TV Association.

The pressure is already strong in Canada, but so far government and regulators have refused to make ISPs the deputies of the media and entertainment industries or to regulate the Internet as a broadcast distribution medium. On law and order, however, the push is for a stronger state and more compliant Netcos and Searchcos.

While there’s lots of dots to connect between all of these latter points, the key idea is that integration at the network and market levels is going to increase pressure to harmonize tougher matters that impinge greatly on network media, and thus network culture. That the blokes and one women from C.D. Howe have nary a word about this and don’t dare let the phrases ‘network neutrality’ and ‘open media’ cross their lips is a problem of the first order because those concerns, as sure as night follows day, are at the heart of the emergent network media culture. How can foreign ownership be reconciled with these concerns should be the question, rather than if it if good or bad altogether.

In sum, until we can start speaking one another’s language and stop passing off economic and policy platitudes backed by those with big stakes in the game, the nominal ideas presented in this “report” should be shelved and other big questions — vertical integration, for example — put on hold.

Ultimately, Pork, Petroleum and Pharma are not the same as telecoms and media. We need some new thinking for ‘new media’.

Until we recognize this, we’re not going to get very far, at least in a a way that takes into account the full range of issues at hand, rather than the economists narrow measuring rod of value.

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