As 1998 begins and a new century beckons, the wireless industry finds itself riding the wave of landmark free trade agreements that will open telecom and information technology markets and force countries to address the far-reaching implications of the Digital Age.
What worldly thinkers have begun to discover is that pagers, mobile phones, satellites and other information delivery systems do more than just help people communicate. Digital devices are transforming governments, economies, societies and the individual.
The United States and other countries helped lay the foundation for the new global order by aggressively pushing for free markets and democratic reforms in developing and developed nations.
But the global information revolution, which has compressed distance and obliterated national borders, was in full force long before politicians got into the act.
Technology, manifested in the marriage of computers and telecommunications, is the master change agent of our time and is fueling a major paradigm shift to a global economy that is knowledge based.
The best that is known about the global digital transformation is that it is not well understood.
“The changing perception of what constitutes an asset poses huge problems in expanding or even maintaining the power of government,” former Citicorp/Citibank Chairman Walter Wriston wrote in the September/October 1997 issue of Foreign Affairs. “Unlike land or industrial plants, information resources are not bound to geography or easily taxed and controlled by governments.”
“Our laws and systems of measurement are becoming artifacts of another age,” Wriston observed.
Wireless technology makes the information revolution highly mobile and compact. It fits in the palm of a hand. Supporting infrastructures can be built with far less money and in less time than that required by wireline networks.
The United States is the prime beneficiary of telecom services free trade-which was scheduled to begin Jan. 1-and telecom-information technology equipment detariffing-to be phased in by 2000-because of its competitive edge in high technology. At press time, it appeared the World Trade Organization Jan. 1 effective date could be pushed back several weeks as countries await approval from their own governments.
Not only does the Clinton administration believe the trade pacts will reduce America’s huge trade deficit with the rest of the world, it sees democracy being exported in the process as well.
China, with market liberalization and human rights abuses coexisting, is severely testing that notion.
Pointing to failed markets in Asia, some observers believe that market reform without true democratic reform is doomed to eventual failure.
In the meantime, a $600 billion world market for telecom services and products awaits wireless companies, as does the huge growth potential in the emerging economies of Asia, Latin America, Eastern Europe, India and Africa.
The European Union will continue to be a big player on the global telecom scene, but its influence may not be as great as once predicted because of continuing struggles within and amongst Western European nations.
“We’ve had great success internationally in wireless,” said Cathy Fowler, spokeswoman for U S West International. “You really need scale and scope to be a success.”
Other Baby Bells, AT&T Corp., AirTouch Communications Inc. and Nextel Communications Inc. also have set their sights beyond U.S. shores.
“I think it offers plenty of opportunities for wireless to leapfrog antiquated wireline technology,” said Jay Kitchen, president of the Personal Communications Industry Association.
PCIA is showcasing wireless technology Jan. 21-23 in Singapore, and will focus on Central America at its conference next September in Orlando.
Thomas Wheeler, president of the Cellular Telecommunications Industry Association calls wireless technology “the ultimate demassifying force. With wireless technology,” he explained to Depauw University journalism students in a 1995 speech, “the information goes to the user, anytime, anywhere, rather than commanding the user to come to it.”
Dispatch radio and wireless local loop networks are making headway overseas, too.
“Dispatch systems are attractive in developing countries because of the low infrastructure costs to get started. I am very optimistic about the world market,” said Alan Shark, president of the American Mobile Telecommunications Association.
As such, PCIA, CTIA and AMTA and are extending their planetary reach.
“I think you’ll see more cross investment and partnering,” predicts Michelle Farquhar, a communications lawyer and former chief of the Wireless Telecommunications Bureau at the Federal Communications Commission.
Farquhar, adding that global roaming of wireless communicators will increase as a result of liberalized trade, noted that streamlined regulatory procedures should make it easier and faster for U.S. telecom carriers to attract foreign capital.
But the huge global wireless market, which many U.S. carriers are turning to because of saturated wireless markets in the states, comes with risks:
economic-The Asian meltdown;
security: the Russian espionage charges against Qualcomm Inc. technician, Richard Bliss;
political: the ever-present danger that in emerging markets, owing to the fragile state of young democracies, organized crime or crony capitalism, seemingly solid business deals can go down in flames in a heartbeat.
Moreover, complex issues involving encryption, antitrust, radio-frequency radiation safety, infrastructure security, content regulation, privacy, intellectual property rights and high-tech crime could become land mines on the global telecom landscape.
Who is in charge? On paper, the World Trade Organization. But, as the United States proved in its veiled threats against Japan after losing the WTO Kodak case, there is still wiggle room for unilateral trade sanctions.
The International Telecommunication Union’s regulatory role will ratchet up in the global telecom market. Trade ministers, like U.S. trade representative Charlene Barshefsky, will become even bigger actors. Wall Street will share the money-lending spotlight with the World Bank and the International Monetary Fund.
Opinions differ on whether global information proliferation promotes democracy by empowering the individual and making possible the electronic town hall or destabilizes democracy by undermining governments’ ability to tax, to regulate or to otherwise control their own economic and political destinies.
“Depending on whom you ask, the information revolution is either the salvation or the destroyer of democracy,” states Ann M. Florini in a paper for the Carnegie Endowment for International Peace.
“One argument claims that the information revolution is the basis for, or at least a major contributor to, the spread of democracy: Hard-to-control information makes for hard-to-control people,” said Florini, a resident associate at Carnegie. “The opposite view contends that information technology fragments societies and undermines the civic consensus necessary for a stable democracy.”
Arthur Schlesinger Jr., a historian and former aide to President Kennedy, agrees with the latter view and predicts the “hyper-interactive state … poses problems for democracy” in part because it “encourages instant responses, discourages second thoughts and offers outlets for demagoguery, egomania, insult and hate.”
Anne-Marie Slaughter, an international law professor at Harvard, is not as worried and believes a new reality is materializing that is neither anarchy nor overarching dominance by powerful global entities, like the WTO.
Writing in the same edition of Foreign Affairs as Wriston and Schlesinger, Slaughter said the nation-state is not evaporating but rather “is disaggregating into its separate, functionally distinct parts. These parts-courts, reg
ulatory agencies, executives and even legislatures-are networking with their counterparts abroad, creating a dense web of relations that constitutes a new, transgovernmental order.”
