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University MicrOfilms International 300 N. Zeeb Road Ann Arbor, MI48106 8310827 Sussman, Gerald THE POLITICAL ECONOMY OF TELECOMMUNICATION TRANSFER: TRANSNATIONALIZING THE NEW PHILIPPINE iNFORMATION ORDER University of Hawaii PH.D. 1983 University Microfilms International 300 N. Zeeb Road, Ann Arbor, MI48106 THE POLITICAL ECONOt1Y OF TELECDr1f.1UNICATION TRANSFER: TRANSNATIONALIZING THE NEW PHILIPPINE INFORMATION ORDER A DISSERTATION SUBMITTED TO THE GRADUTE DIVISION OF THE UNIVERSITY OF HAWAII IN PARTIAL FULFILLMENT OF THE REQUIRE~ENTS FOR THE DEFENSE OF DOCTOR OF PHILOSOPHY IN POLITICAL SCIENCE r~ay 1983 By Gerald Sussman Dissertation Committee: Robert B. Stauffer, Chairman Belinda A. Aquino Deane Neubauer Syed A. Rahim Michael J. Shapiro iii ACKNOWLEDGEMENTS There are a great number of people to whom lowe special thanks for the time, patience, consideration and various other forms of support they have given for this study. Each of the dtsser-tation members provided insights, arguments and direction that helped me to frame difficult questions. In addition, Bob Stauffer inspired me with encouragement to see it through and with his own productive work habits. To the East-West Communication Institute and particularly to Syed Rahim I am deeply grateful for the material support that allowed me to undertake the doctoral program, field study and the first stage of the writing. Deane Neubauer, Herb scht ller, Dallas Smythe, Bob Stauffer and Tapio Varis contributed valuable critiques to pre-publication portions of the study. In th~ countries I visited as part of the research, there were countless people who in one way or another made available the necessary personal contacts and primary sources of information. The Institute of Philippine Culture and its director, Ricky Abad, provided affiliation status. The staff of the Third World Studies Program at the University of the Philippines» under its director Randy David, were generous in giving access to library materials as were Business Day (Manila), Sycip, Gorres &Velayo, the Asian Institute of t1anagement, the Ateneo de t1anila University and the University of the Philippines. I am specially indebted to the iv personnel of the Philippines Security and Exchange Commission who helped me find much of the key data on corporate ownership and control. The many Filipinos who took certain risks in uncovering sensitive and not easily obtainable documents deserve tribute for their spirit of friendship and resistance to the repressive order. Without such souls none of us would know what secrets the high-powered privatized sector keeps from the public. I also want to thank for their special kindnesses during the course of my research: Yowie and Hamoru Tsuda, the Rosales and Pargas families, Susan and Oscar Evangelista, Motoe and Richard Wada, Temay Padero, the Baraoidan family and Hang Regulo - who introduced me to the lives of squatters who have nothing to lose but their chains. Along the way many other individuals gave shelter and sustenance to guide a pilgrim's progress: Iwan Abadi and family, Fely and Gerry Rixhon, the scientists at the Indian Space Research Organization, the Nair family, the Hansens, Patty Kaitz, Claire and Dave Sussman and the Ozawa family. Gunder Frank and Rita Cruise O'Brien helped make my life in England both homey and intellectually stimulating. Most dearly appreciated is the continuous optimism, support and involvement of Connie Ozawa who walked and talked the'paces with me, provided labor at critical stages of this project and urged me to move it to completion. v ABSTRACT The transformation of international communication through the development of high-speed, long distance data/voice/video transmission systems augurs profound changes in international relations, production and economic distribution. In recent years a number of scholars have begun documenting the global impact of hegemonic communication media, extending the parameters of domination ever wider into the periphery and even into the periphery of the periphery. I have examined the transfer of telecommunication technology from the dominant transfer centers to one state which serves as a major outpost of foreign capitalist investment in east and southeast Asia: the Philippines. Based on extensive interviews and review of primary and secondary data in that country, this study attempts to (l) identify the Philippine ideological and technical rationale for the transfer model; (2) describe the fUfictional and financial state of the communication system in the Philippines and its historical precedents; (3) establish who communicates-what-to whom-through what media; {4} discuss the role of external actors; and {S} analyze the social, economic and political consequences of telecommunication transfer. The data support certain conclusions that may be placed within the Wallerstein "world capitalist system" approach. One of vi the central arguments that Wallerstein makes is that over the course of the past 400 years, and the rise and fall of various capitalist powers, capitalism as a system has persevered and expanded into global enterprise. And that despite serious antagonisms within it, i.e., socialism, the system continues to dominate international factors of production, supersede national boundaries and move toward the integration of separate capitalist subsystems against traditional core and periphery nation state prerogatives. Swept into its all-consuming vortex, the nation state prospers to the extent that it is able to establish ~ niche within the international division of labor and production. The world's largest telecommunication corporations - largely representing the U.S., Japan, the Federal Republic of Germany and the U.K. - have introduced "leading edge" technology to the Philippines and provided the conduit for other transnational corporations (largely U.S. and Japanese) to extract value and exchange from new investment areas, particularly in the export processing zones. Domestic economic elites intimately associated with President Marcos have shared in the largesse but have heavily committed the state to repaying rapidly rising foreign and internal debts while defending the growth model. The financial as well as cultural/ideological aspects of Marcos' communication order raise important questions concerning international communications and its relationships to the role of the state, the preservation of national sovereignty and the improvement of social welfare. vii TABLE OF CONTENTS ACKNOWLEDGEMENTS ••••••••••••••••••••••••••••••••••••••••••••••••••;;; ~ ABSTRACT fl ••••••••• ••••••••••••v LIST OF TABLES ••••••••••••••••••••••.••••••••••••••••••••••••••••viii CHAPTER I. INTRODUCTION ••••••••••••••••••••••••••••••••••••••••••1 CHAPTER II. THEORETICAL AND METHODOLOGICAL CONSIDERATIONS •••••••• 13 CHAPTER II 1. THE STRUCTURE OF Daru NATION ••••••••••••••••••••••••••57 CHAPTER IV. THE PRlr~RY USERS ••••••••••••••••••••••••••••••••••• 125 CHAPTER V. THE WORLD BANK IN TELECOt1r·1UNICATION TRANSFER •••••••• 156 CHAPTER VI. TELECOMMUNICATIONS AND THE INTERNATIONAL DIVISION OF LABOR •••••••••••••••••••••••••••••••••••209 CHAPTER VII. TOWARD A CONCLUSION •••••••••••••••••••••••••••••••••270 BlBL IOGRAPHY ••••••••••••••••••••••• "••••••••••••••••••••••••••••••285 viii LIST OF TABLES Table Page I Major Telecommunication Enterprises••••••••••••••••••••80 II RPN - DOt1SAT Broadcast Connections •••••••••••••••••••••85 III Major U.S. Satellite System Suppliers••••••••••••••••••96 IV Competing INTELSAT VConsortia•••••••••••••••••••••••••99 V Trans-Pacific Cable 1 (Philippines-Guam)