Date: Thu, 12 Mar 1998 19:15:30 -0800 (PST)
From: MichaelP <>
To: unlikely.suspects:;
Subject: Onward march of privatisation
Message-ID: <Pine.SUN.3.96.980312191348.6278A-100000@kira>
Precedence: bulk

Technical advance, ideological project: Selling off a heritage

Le Monde diplomatique, March 1998

On 1 January 1998, landline voice-telephony services in ten of the fifteen countries of the European Union were completely opened up to competition; the remaining five—Spain, Greece, Ireland, Luxembourg and Portugal—were given slightly longer periods, ranging from a few months to three years, to bring themselves into line. In France, four companies—9 Telecom (combining Bouygues, Telecom and the German company Veba), Cegetel (owned by the Compagnie Generale des Eaux), Omnicom and Siris (a subsidiary of ATT and Unisource)—will function as counterweights to France Telecom, which was partially privatised in October 1997. Currently, 20.9% of the latter's shares are held by financial institutions and individuals, and 2.3% by its employees.

With this part-privatisation, France's prime minister Lionel Jospin has taken two important steps: he has broken one of his most symbolic electoral promises, and he has overturned the public service mission of France's historic operator. As a result, France Telecom will no longer be a public service but will become a company like any other, with a priority concern to earn money for its shareholders. This was clear in the statement by Secretary of State for Industry Christian Pierret, when he said that his government would defend the profitability of the capital invested in the new telecommunications concerns. It was also clear from his action in going to promote Cegetel's services in Lyon on 31 January of this year. To say that private shareholders will be in a minority does nothing to change the basic picture. It only takes one small worm to spoil the apple.

This represents the first stage in a process of major overhaul that the European Commission in Brussels has been preparing for some years. In its systematic hostility to the public services sector, the Commission has committed Europe to following the model of deregulation that has already been pushed through in the United States. The short-term aim is to set up half a dozen conglomerates which will create a new world oligopoly, with American telecommunications giants holding the dominant positions. This oligopoly will be in a position to carve up not only the communications sectors (both old and new) in the Old World, but also communications networks at the international level (see the article by Pierre Musso in this issue). It represents an effective way of ensuring the day-to-day globalisation of Europe's economy.

In such a situation we should not allow ourselves to be taken in by the Commission's euphoric rhetoric and the similar rhetoric coming from France TÚlÚcom management in France, who are fully in favour of privatisation. The much-touted reduction in the price of telephone calls will certainly happen—but mainly for long distance and international calls, in other words, basically, for companies and the well-to-do. The average citizen, on the other hand, can expect to face rises in connection charges, service charges and the price of local calls. And as regards the consequences for jobs, one only has to look to the United States to be seriously alarmed. In the coming bout of deregulation it is already perfectly clear who are going to be the winners and who the losers.

In the privatisation of a public operator such as France TÚlÚcom what is crucially at stake is the shift from a logic of solidarity—particularly as regards fair charging systems for the less well-off—to a logic of selling off a common heritage which has been created over several decades by the efforts of taxpayers and employees alike. Economic predators in the shape of the Anglo-Saxon pension funds and insurance companies were not wrong when they mobilised up to $58 billion in order to acquire shares in the concern, a figure sixteen times larger than the value of the shares on offer at the time! But they have good reason to expect that this war chest will come in handy on a future occasion.