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'Sms' Capital of the World": a Political Economy of a Wireless Revolution in the Philippines

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'Sms' Capital of the World "'SMS' CAPITAL OF THE WORLD": A POLITICAL ECONOMY OF A WIRELESS REVOLUTION IN THE PHILIPPINES Maria Cecilia T. Paule B.A. Social Sciences, University of the Philippines, 1999 THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS In the School of Communication O Maria Cecilia Paule 2004 SIMON FRASER UNIVERSITY July 2004 All rights reserved. This work may not be reproduced in whole or in part, by photocopy or other means, without permission of the author. APPROVAL NAME: Maria Cecilia T. Paule DEGREE: TITLE OF " 'SMS' Capital of the World": A Political Economy of a THESIS: Wireless Revolution in the Philippines EXAMINING COMMITTEE: CHAIR: Prof. Gary McCarron Prof. Yuezhi Zhao Senior Supervisor, School of Communication, SFU Prof. Pat Howard Supervisor, School of Communication, SFU Dr. Jack Linchuan Qiu Examiner, Research Fellow, Annenberg School for Communication University of Southern California Date: / ?a h0,yJ Partial Copyright Licence The author, whose copyright is declared on the title page of this work, has granted to Simon Fraser University the right to lend this thesis, project or extended essay to users of the Simon Fraser University Library, and to make partial or single copies only for such users or in response to a request from the library of any other university, or other educational institution, on its own behalf or for one of its users. The author has further agreed that permission for multiple copying of this work for scholarly purposes may be granted by either the author or the Dean of Graduate Studies. It is understood that copying or publication of this work for financial gain shall not be allowed without the author's written permission. The original Partial Copyright Licence attesting to these terms, and signed by this author, may be found in the original bound copy of this work, retained in the Simon Fraser University Archive. Bennett Library Simon Fraser University Burnaby, BC, Canada ABSTRACT Market-driven development and the liberalization of the world's telecommunications sector has been a crucial component in the current process of globalization. The Philippines provides an interesting case study. Since the beginning, the telecommunications structure has been shaped by colonial powers and private market interests with telephone service primarily based on an 'ability to pay' principle. In line with neoliberal policies, the 1995 Public Telecommunications Policy Act of the Philippines deregulated the telecommunications industry and encouraged competition. This facilitated the entry of new domestic firms, backed by foreign partners, with commitments to rollout basic telecommunications infrastructure in exchange for licenses to operate international gateway facilities and cellular mobile telephone systems. While there has been a gradual growth in the number of landlines, the entry of imported technologies has paved the path for a wireless revolution in the Philippines characterized by the explosive growth of digital mobile phones with its unique feature of text messaging, formally known as Short Message Service (SMS). This thesis analyzes the phenomenal growth of cellular mobile phones in the Philippines, in particular, the ways in which Filipinos have appropriated the technology. It explores the dialectical relation between technology and society to avoid the pitfalls of technological determinist analyses. It discusses the broad economic and social conditions that contributed to the wireless revolution. It explores the ramifications of this revolution in communications technology. What are the trade-offs? Who are the winners and losers? What are the social and economic implications of the wireless revolution? DEDICATION ACKNOWLEDGEMENTS I share the joy of successful completion of this work with my supervisory committee, fhends and colleagues, and my family. I am deeply grateful for the intellectual support given to me by my senior supervisor, Dr. Yuezhi Zhao. I am indebted for Zhao's valuable critical insights and guidance throughout the process especially introducing me to several important sources. I am thankful to my supervisor, Dr. Patricia Howard, for her unwavering support. Many thanks to the external examiner, Dr. Jack Linchuan Qui, for his critical and constructive comments. A special thank you to Dr. Roman Onufiijchuk for sharing words of wisdom. I am also grateful to Dr. Gordon A. Gow for his encouragement. I would also like to acknowledge Dr. Paul Heyer for his support and faculty members whom I took graduate courses with including Dr. Robert Hackett, Dr. Rick Gruneau, and Dr. Dorothy Smith. Thank you to Hiromi Matsui. Thank you to the support staff especially Neena Shahani, Lucie Menkveld, and Evelyn Hassen. I also appreciate the library assistance of Penny Simpson and Sylvia Roberts. Friends at SFU, thank you. In the Philippines, I am grateful for the continued support of faculty members at the University of the Philippines Manila especially Prof. Rolando G. Talampas, Prof. Bernard Karganilla, and Dr. Cristina Torres. Thank you to Atty. Kathleen G. Heceta and Engr. Dante Vengua of the National Telecommunications Commission. Special thanks to Henedina Polo, and Jocelyn Hapal. My sincere appreciation to the Venturina family and Cabote family for their warm accommodations. Relatives and friends who got me "texting" especially Kuya Bong, Kuya Ariel, Ate Charisma, Jobert, Abi, Jenny, Jerome, Honey, Peps, Kristel, Marianne, and Abigail. A very special thank you to my best friend, Jack Victor M. Nera whose encouragement through letters, long-distance calls, and text- to-emails always made me smile. Finally, I am very thankful for the unconditional love and support of my family. I am deeply grateful to my parents, both of whom took the time to read my thesis. Dad, I appreciate your insightful comments. Mom, thank you for the wonderful cooking. Ate Cathy your calls of support from England were always appreciated. My brother-in-law and sister, Jorge and Cristina, thank you very much for the many treats and your computer expertise. My special brother, Conrado John (CJ), I draw strength from your courage and joy for life. Above all, I thank the Almighty. With God, all things are possible. TABLE OF CONTENTS .. Approval ............................................................................................................................ 11 ... Abstract .............................................................................................................................111 Dedication ......................................................................................................................... iv Acknowledgements ............................................................................................................v Table of Contents ............................................................................................................ vn.. List of Tables ....................................................................................................................ix List of Acronyms ................................................................................................................x Introduction .............................................................................. .........................................1 . Motivations....................................................................................................................... 1 Scope and Organization of the Thesis ..............................................................................5 Chapter One The Neoliberal Shift: From Local to Global Telecoms .........................7 Overcoming Time and Space ...........................................................................................8 The Neoliberal Agenda .................................................................................................-10 Beginning in the USA ................................................................................................ 10 . International Institutions............................................................................................. 15 Different Trajectories in Different Countries ............................................................. 17 The Social Dimension: Trade-offs .................................................................................19 Social Uses: The People and the Struggles .................................................................... 21 Summation .................................................................................................................... -24 Chapter Two Institutional Framework of the Telecommunications Industry in the Philippines. ..............................................................................................................25 From Colonialism to "Neo-colonialism" .......................................................................26 The "Dependent-Integrated State" ................................................................................. 30 Marcos administration (1 965- 1986): The Period of Command .................................30 Aquino administration (1 986- 1992): The Restoration of Democracy ....................... 37 Rarnos administration (1 992-1 998): The Golden Age of Telecoms ..........................39 Estrada administration (1 998-2001): A Revenge of Telecom Connectivity? ............ 46 Implications of "dependent-integrated" Development ...................................................48 Chapter Three Mobile Phones and
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