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Trends in World Communication

by Cees Hamelink




1. Introduction.

2. The trend towards digitization.

        1. What is digitization?

        2. Digitization: The Issues.



        Activity I.

3. The trend towards liberalization.

      1. What is liberalization?

      2. Liberalization: The Issues.

           Universal Service.

           Market access.

     3. Activity II.

4. The trend towards consolidation.

4.1. What is consolidation?

4.2. Consolidation: The Issues.

4.2.1. Implications for consumers.

4.2.2. Independence of performance.

Activity III.

5. The trends towards globalization.

         What is globalization?

         Globalization: The Issues.

                How global is 'global'?

                Towards a global culture?

         Activity IV.


6. Summary of main points.


7. References.

8. Bibliography for further reading.


9. Terms and abbreviations used (indicated by *).





In the past decades world communication* has developed into a rapidly expanding field with a large number of players. Communications across borders consist of flows of words, images, texts and data that move between and among individuals, governments, social movements, and business organizations. Flows of world news are carried across the globe by the major printed news agencies (Associated Press, Reuters, and Agence France Press) and the leading agencies for visual news (Reuters Television and World Television Network, and to a lesser extent CNN and the BBC). Flows of entertainment and educational materials, which include recorded music, feature films, textbooks, and TV entertainment are provided by the world's largest entertainment media companies. (see Table 1.) Flows of promotional messages, which consist mainly of commercial advertising in international newspapers, magazines, and broadcast media across the globe, are produced by the world's largest advertising agencies. (see Box 1). Flows of data, like in electronic data exchange, electronic funds transfers, remote resource satellite sensing, electronic mail and database searches, are carried by worldwide computer networks such as the Internet, or such inter-firm networks as the largest interbank network SWIFT*. Flows of voice messages -for both private and commercial applications- are facilitated by such major players as the world's largest telecommunication service providers. (see Box 2). Flows of text messages are transported through such media as telefax, telex and the mail services. The major players are the telecommunication service providers, the postal services around the world, and the leading courier companies.

Together the message producers, network operators, and equipment manufacturers that facilitate these flows represent a multi-billion dollar world communication market.

 This market is largely shaped by four major trends that originate in the 1980s and mature in the 1990s. These are: digitization, liberalization, consolidation, and globalization.



2.1. WHAT IS DIGITIZATION? The term digitization refers to the growing significance of digital technologies in the recording, storage and transmission of images, words, text and data. These technologies (such as digital cameras, digital computers, or digital discs) encode information in binary form. This means that information is represented in yes/no or on/off signals. This makes the recording, storing and transmission of information much easier, faster, and more reliable than is the case with more conventional analogue technologies. In the analogue technologies information is represented by continuously changing signals. As a result, digital music recordings, for example, are more reliable and last longer than the analogue recordings.


Digitization means that technologies for the processing and transmission of information have begun to use the same language. This facilitates the convergence of telecommunications, computers, office technologies and assorted audio-visual consumer electronics. This integration offers speed, flexibility, reliability, and low costs. The leading maxim of the digitization trend is 'faster, smaller and cheaper'. (Business Week, June 13, 1994, p. 48). Digitization means better technical quality at lower prices. Communication channels expand their capacity, there is scope for more consumer choice and more possibilities for inter-active systems. Digital technologies create multi-media interactive systems with a great variety of applications. Ranging from virtual (i.e. electronic) shopping in the world's largest department stores to instant audio, visual, and text and data communications between scientists in distant locations. Today's largest users of world communication (e.g. transnational corporations in manufacturing or services such as banking) are demanding broad, affordable, reliable, and flexible electronic highways around the globe. Only a digital global grid can meet these demands. This implies the development of new hardware and software. The digital grid will be expected to transport all signals that can be digitized: from the human voice to High-Definition TV imagery. This requires the replacement of conventional carriers such as copper wires with optical fibre cables, it means new switches, and new software to control the unprecedented large flows of information across borders.

Digitization provides the technical infrastructure for the much heralded "global information superhighway". This is a project that is strongly promoted by the Clinton- Gore administration in the USA where in 1993 an action plan for a National Information Infrastructure was adopted. According to Al Gore (in a speech on March 21, 1991 to the International Telecommunication Union conference in Buenos Aires), 'The President of the United States and I believe that an essential prerequisite to sustainable development, for all members of the human family, is the creation of a Global Information Infrastructure. This GII will circle the globe with information superhighways on which all people can travel'.

In response to the US initiative a frantic activity arose in other countries. In Japan the Telecommunications Council of the Ministry of Posts and Telecommunications published in May 1994 a report entitled 'Reform towards the Intellectually Creative Society of the 21st century'. In Canada the Information Highway Council was established. The European Union appointed the Task Force on European Information Infrastructure.

During a Summit of the G-7* on the information superhighway in February 1995 at Brussels it became abundantly clear that the information superhighway project receives strong support from the world's top political leadership. The political summit agreed to close cooperation in the development of a global information society. There was however some disagreement about the speed at which this would be established. The USA pleaded for fast liberalization of markets and open competition. Japan and Europe were more cautious and preferred a slower pace. The G-7 Final Declaration stated that key elements are dynamic competition and private investment. Although it is expected that the information society will enrich people worldwide, there are also serious concerns about the disparity between the information- rich and the information-poor and about future employment.



2.2.1. PRIVACY. Digital technologies expand the capacity to capture, process, and store information in dramatic ways. A precise tracing of an individual's movements has become possible through the "electronic trace" we leave behind as we use credit cards, rent cars, buy airline tickets, and purchase items in department stores. Data about people's conduct on the digital superhighway will be accessible in unprecedented ways.

The digital age arrives with a monumental invasion of people's privacy. Rapidly increasing volumes of personal information are collected, stored, and sold through vast electronic systems that are operated by governmental agencies (tax, security, police, etc) and by private firms. Early 1992 a scandal erupted in Spain when the police arrested Joaquin Gonzalez who had built up a very lucrative trade in privacy. His business was buying personal data from public and private electronic databases and selling them to marketing companies. Gonzalez's database had intimate knowledge about which Spanish men had mistresses. His data collection covered some 21 million Spanish citizens.

In order to make or cancel connections between subscribers in a network an extensive exchange of data is needed between subscribers and exchanges and between different exchanges. In digital networks all these data are easily recorded in a socalled Call Detail Record. This Record provides precise information about the ways in which individual subscribers use the network . The development of the Integrated Services Digital Network in many countries is another area with very complex privacy aspects. One of the possibilities of ISDN is automatic caller identification.

For example the call can be automatically connected with a computer database. ISDN facilitates the connection between two databases and thus the combination of separate collections of personal data. ISDN facilitates networks through which data banks with name-linked data can be remotely accessed. Digitization has expanded the range of information-related activities people can engage in while at home: telebanking, teleworking are some examples. This home-telematics opens up new risk of privacy infringement.

Very illustrative are the dangers involved in teleworking. "Because the teleworker is beyond the range of the employer's physical supervision, the necessary supervision of the execution of the work will take place via the on-line telecommunication connection with the worker's terminal. Consequently, the worker is subject to the possibility of continuous supervision by an invisible employer. Moreover, the fact that the worker's terminal is located at home means that the employer can also monitor certain aspects of the worker's daily routine". (De Vries. 1990: 202).

Although privacy legislation is on the increase around the world, it fails to address the basic problem. It leaves the massive collection of data untouched. It does not stop the increasing surveillance of citizens by public and private entities. It only provides you with the right to know that information is collected and possibly allows you to correct it if it is inaccurate. Against the fact that so much detailed, personal information is collected and that one day a less benign state may abuse this, there is presently no legal protection. The violation of people's private sphere follows the spread of advanced digital technology around the world. Admittedly, people have very different conceptions of privacy. In most Western societies there is a much stronger emphasis on the protected individualistic life- world than in many Third World societies. Yet, across the globe people know that information about them can be used against them and that surveillance by powerholders is a worrying development. Moreover, privacy protection does not only concern individual citizens, it concerns whole nations. Digital technology creates transparent societies, 'glass-house' countries that makes them very vulnerable to external forces and that undermines their sovereign capacities.


2.2.2. SECURITY. The use of digital technologies involves risks. If they are tampered with, airline passengers may die in a crash, patients may be seriously injured, or companies may go bust. In many social areas (such as international finance and transport) there is today a strong dependency upon technology. This dependence creates a serious vulnerability to the failure of technology. The inherent unreliability of digital computers exacerbates this. Forester and Morrison argue in this connection that computers are inherently unreliable as "they are prone to catastrophic failure; and .... their very complexity ensures that they cannot be thoroughly tested before use". (Forester & Morrison. 1990: 468). Digital systems can suddenly fail totally or behave erratically. This is different in analogue systems (for example a simple thermostat) that have few discontinuities and that are unlikely to stop functioning totally or to operate in totally unpredictable ways. In digital systems, however, there can be numerous discontinuities since the execution of each state of the system depends upon the earlier state to be correct. And each state of the system represents a potential point of error. The magnitude of possible errors is therefore almost beyond imagination. Software bugs, systems malfunction, computer crime and hacking can cost millions of dollars and human lives. Computer software errors may cause over-billing, false arrest, but also loss of life and grave injury.

A special danger for computer systems is posed by socalled virusses. A virus is a computer programme that causes serious damages to hard disks or floppies by erasure or distortion of files. A virus can infect other programmes by copying itself on to them. When in November 1988 a computer virus disrupted the US nationwide ARPANET computer system this forced some 6,000 computers to be shut down for two days leading to a total damage of over US $ 99 million. (Russo, Hale, & Helm. 1989: 4-13). (New York Times, 1988: B-1). The Michelangelo virus of early March 1992 did not create as much damage as it could have since there was a timely warning across the world. Several reports did mention however that some 10,000 computers had been hit worldwide. The virus did wipe out contents of hard disks of the infected computers. A telling illustration of very real damage is the case of a Nevada woman, a Ms Julie Engle. Ms Engle underwent routine surgery in hospital. The operation was completed without complication. However, soon afterward Ms Engle was administered pain relief by a computerized dispensing machine. Unfortunately, the system mistakenly instructed hospital staff to pump more than 500 mg of pain-relieving drugs into Ms Engle's body and within 390 minutes of the successful completion of the operation, she was found to be in a coma. Five days later, she was pronounced brain dead. A damages suit was launched for incorrect and irresponsible use of an expert system. (Forester, 1990: 467). Somewhat similar cases occurred in 1986 when in Texas through computer malfunction lethal overdoses of radiation were given to cancer patients. An obvious manifestation of security issues is the possibility, and increasingly the reality, of computer abuse for criminal purposes. Several highly publicized cases in the late 1980s (such as access to computer systems in Canada from New York or access to NATO information systems in Norway from the USA) have shown that "the prevention of computer crime is of great significance as business, administration and society depend to a high degree on the efficiency and security of modern information technology". (Sieber. 1986: 119). With the proliferation of computer users and the growth of knowledge about computer operations, the chances of computer abuse have drastically increased. There are however no reliable data on the spread of computer crime or on the extent of possible damage caused by it. There is a relatively small number of known computer offences and a likely much higher figure for undiscovered abuses. Sieber attributes this "first to the low proportion of computer offences which become known due to the specific difficulties of detection and proof in the DP sector. Second, many of the offenses that are discovered are subjected to the internal disciplinary procedures of the companies concerned rather than being reported, due mainly to a fear of damage to the company's reputation and loss of confidence by investors, shareholders, and customers or in order to facilitate the compensation for the damage done. Third, cases reported to the law-enforcement agencies are not always systematically prosecuted since effective treatment requires special knowledge as well as high expenditure in terms of time and money. Finally, it is a matter of chance whether reported cases of computer crime are discovered among other cases of fraud and breach of trust, because the criminological term "computer crime" does not appear in official legal administration statistics". (Sieber, 1986: 33). Studies indicate that "losses in computer crime are much more severe than those in traditional crime" (Sieber, 1986: 34) and "the problems caused by computer crime are bound to intensify in the future". (Sieber, 1986: 35).

Among some of the earlier signals that pointed at the problem of technology- vulnerability is the 1978 report by the Swedish Ministry of Defense Committee on the Vulnerability of Computer Systems (SARK) "The Vulnerability of Computerized Society". In 1981 the Organization for Cooperation and Economic Development (OECD) held a workshop in Sigueenza (Spain) on the Vulnerability of the Computerized Society. In 1984 the American Federation of Information Processing Societies published a report on the matter and in the same year the Information Task Force of the Commission of the European Communities published "The vulnerability of the information-conscious society-European situation." In 1986 the Norwegian Vulnerability Commission presented a report called "The Vulnerability of a Computer Dependent Society". In 1989 a committee of the British Computer Society reported that current skills in safety assessment were inadequate and therefore the safety of people could not be guaranteed.

These various commissions and reports began to identify the risks that the use of international computer systems entailed. Such risks could be incorrect transmissions either by technical malfunction or by the intentional act of an intruder. Incorrect transmissions could include the transmission of data to the wrong computer, or of the wrong data, or of both. Transmissions could also be afflicted by delays or by the unexplained loss of data. Another risk could be the unauthorized access to the data traffic or the data themselves or both. A third type of risk could be the possibility of communicating with fraudulent persons. Risks could also be caused by malfunctions of networks that take care of Electronic Funds Transfers and such malfunctions may be caused by environmental factors, by equipment failures, errors in design architecture, or by human errors in data processing. Such errors could cause inadvertent changes in the contents of payment instructions. Vulnerability for societies can also be a result of the increased speed of transactions. As businesses use greatly reduced response time to lower their stocks of goods (spare parts, components) a computer virus could close down a factory if something goes wrong in the electronic communications between manufacturer and supplier. Since the risks of digital technology may lead to considerable damage a call for international rules that would establish liability and damage compensation has emerged. This concern for the adoption of international arrangements on data security confronted a host of complex problems. In conventional practice, for example, the operators of international networks could not be held liable for damages caused as a result of transmissions. In many countries the PTT has been the main network operator and in most national legislations the PTT cannot be held liable. The Convention of the International Telecommunication Union (in art. 21) simply excludes any liability for international connections. (ITU, 1989). There is recently, however, an awareness growing in the international community that the interests at stake may demand rules on the liability of network operators.



Take 15 minutes.

During the Summit of the G-7 on the Information Society (in February 1995 at Brussels) US Vice President Al Gore said that the biggest concern about the Global Information Superhighway was the protection of privacy. " We must protect the privacy of personal data and communications. Government and industry need to work together to develop new technologies, new standards, and new policies that will provide the necessary security and privacy protection".

How do you respond to this statement? Has digitization made the protection of privacy an illusion? Can policies be developed that make the Global Information Highway secure and reliable?



3.1. WHAT IS LIBERALIZATION? The trend towards digitization goes together with political and industrial pressures to shift from public-service type information and telecommunication services to a competitive environment for the trading of these services by private market operators. Liberalization refers to the introduction of competition in the supply of information and telecommunication services. The High-level group on the information society -chaired by European Commissioner Martin Bangemann- reported in June 1994 to the European Summit at Corfu that the information society is coming, whether we like or not. The process should be driven by the market and the market should be open. Liberalization is the key word for the future information society. One of the recommendations of the Group was to accelerate the continuing process of liberalizing all telecommunication infrastructures and services still under monopoly. (Bangemann, 1994). As many countries around the world are revising their communication and information structures, the leading stratagem seems to be "more market, less state" and the buzzword is "deregulation". Deregulation became the key policy orientation of the 1980s. The concept is somewhat misleading as deregulation in practice tends to imply re-regulation and it often leads to more rather than to fewer rules. The first period of deregulation commenced in the late 1950s within the USA. As telecommunication users "became aware of their growing dependence on telecommunications, they organized to lobby government authorities for specific, far- reaching change in the rules governing domestic telecommunications provisions". (Schiller & Fregoso. 1991: 198). By and large the telecommunication regulators affirmed business user's demands. In the 1980s telecommunications systems in the USA, UK and Japan shifted to deregulatory policies. On January 1, 1984 the mega-telecommunication operator AT&T was broken up into its 22 local companies. In exchange AT&T was now at liberty to enter new types of business. In 1985 the sale of 51% of Britain's nationally owned British Telecom shares to private sector interests was authorized by the UK government. Also in 1985 Japan developed a new policy towards the liberalization of its telecommunications operations. The largest operator Nippon Telephone & Telegraph lost its monopoly in exchange for the permission to begin new competitive lines of communication business. Part of the government's ownership of NT&T was sold to the private sector and new local voice carriers were allowed in the market place. A key policy issue in the GATT Uruguay Round of multilateral trade negotiations -which ended in December 1993- was the liberalization of markets around the world for providers of services (among them telecommunication services and audiovisual services).



3.2.1. UNIVERSAL SERVICE. Already in the early history of telecommunications a key notion was "universal service". This means that telecommunication should be available to all people at reasonable charges. A critical question is whether liberalization is compatible with universal service? What will happen to universal service in the competitive battle between private entrepreneurs? Given the levels of expenditure, will private entrepreneurs continue to meet the common standard of availability? The standard of availability obviously demands international coordination. It requires that telecommunication networks are technically compatible and that common rules are adopted about access to and use of these networks. From the mid-nineteenth century through to the 1970s this coordination was governed by a stable and robust multilateral accord. The world community had adopted common standards on the technical compatibility of networks and the price setting for access to and use of these networks. This public-service type agreement was based upon the principles of natural monopoly and cross-subsidization. Monopolies of equipment and services were seen to provide efficient and equitable public service. Cross-subsidization meant that tariffs for small users were not based upon real costs, but were kept affordable by subsidies from such revenue generating operations as international telephony. This arrangement was fundamentally challenged by the deregulatory reforms of the 1980's. The large users discovered that cost reductions were possible if they used alternatives to the networks controlled by the national monopolies. In some countries strong pressures to base telecommunication tariffs on a cost-based system began to have an effect on national policy. This new pricing policy raised serious problems for the availability of telecommunication for residential users at reasonable charges. As Hills observes, "Under liberalization cost-based pricing involves a reduction in long- distance tariffs, an increase in local call charges and an increase in the charges levied on individual subscribers (these subscribers being once again made responsible for meeting the cost of the local loop". (Hills, J. 1989: 134) The liberalization argument responds to this by stating that "if individual subscribers are too poor to meet the increased costs of access then they must forfeit telephone service and drop off the network. If governments wish the network to be 'universal' then they must pay a subsidy to have these people kept on". (Hills, J. 1989: 134). Although there is not sufficient strong evidence on large numbers of subscribers being forced off the network, there is evidence that liberalization has not increased the penetration of telephone networks. This is largely due to the fact that deregulation tends to increase costs of connection, rental and usage. "In the USA consumer groups argue that the divestiture of AT&T has disenfranchised groups of consumers from use of the telephone by the rebalancing of charges and the liberalization of the local network monopoly-these groups are the elderly, the poor and those living in high-cost rural areas". (Hills, J. 1989: 139). There are a number of initiatives developed to address this, such as subsidization schemes for emergency services. However, consumer groups argue that these measures are not adequate.

They provide access to the 'emergency box', but this does not constitute universal service. "The argument adopted by consumer groups in the USA is that access is not universal service - that the telephone should be priced at a level which makes it possible for disadvantaged groups to use it for social reasons rather than simply as an emergency service". (Hills. 1989: 141). The data on penetration in the USA suggest that since the AT&T divestiture national telephone penetration has not decreased (Fuhr. 1990: 187), but this may be different for actual usage. "Consumer groups claim that usage of the telephone has decreased among lower-income groups, such as the elderly. The American Association of Retired Persons argues that one in five people over the age of 55 years have had to reduce their telephone usage". (Hills, J. 1989: 142).

Deregulation of telecommunication may also have an impact on international tariff structures. The concern has been raised that the new competitive climate for Intelsat* could lead to so called 'cream-skimming' on the dense routes and consequently problems for the financing of the thin routes (in particular for Third World traffic). Although opinions are divided on the effectiveness of this policy, there has been since the beginning of Intelsat operations a level of cross-subsidization. "Intelsat is currently responsible for the delivery of approximately 70% of the world's international telephone calls and virtually all international television transmission. Since its very beginning Intelsat has enjoyed a near monopoly status in the delivery of satellite communications. Through an economic policy of global price averaging, Intelsat has ensured affordable communications on a worldwide basis. To accomplish this, Intelsat takes revenues derived from high-traffic routes (eg the North Atlantic region, USA to Europe) and subsidizes the less profitable traffic routes that interconnect geographically isolated and/or developing nations". (Gershon. 1990: 249). By the mid-1980s a number of applications for the provision of satellite services had been received by the US Federal Communications Commission. Applicants were Orion Satellite Corporation (March 1983), International Satellite Inc (August 1983), RCA (February 1984), Cygnus Corporation (March 1984) and Pan American Satellite Inc (May 1984). Only the PanAmSat application asked authorization for international carrier services between the USA and Latin America. The others were only interested in the provision of private satellite services (information traffic within a network owned or leased by the customer) in the North Atlantic region. Intelsat clearly began to feel uneasy about the prospect of cream-skimming competitors. In 1985 the then Intelsat director general Richard R. Colino wrote "While deregulation and free- market competition are suitable in some business environments, in others they can cause ruinous failures with devastating social implications if not carefully and effectively managed". (Gershon. 1990: 252). In November 1984 the Reagan administration launched its "Open Skies" policy that would promote international competition in telecommunications as well as maintain the viability of Intelsat. If Intelsat will have to compete with other satellite operators, but also increasingly with fibre optic cable operators that will apply high-density routes based pricing systems, will the integrated global pricing system of Intelsat survive? (Gershon. 1990: 249).


3.2.2. MARKET ACCESS. What is the impact of a worldwide liberalized trade environment upon the markets of developing countries? What are the effects on infant service industries in Third World countries? What are the consequences of global open markets for local cultural production? Will trade liberalization benefit those countries that have large trade deficits in services? When the costs of telecommunications go down, one can expect a rapid growth of information-based services that are supplied by telecommunication-based delivery systems. The operators of such services will press for far-reaching regulatory changes to remove international trade barriers. One of the problems is that the regulation of service activities is often closely related to specific national goals. This is evident in such cases as the regulation of banking and insurance and the operations of airlines and telecommunications. Here considerations of national security or public interest have an import on regulatory measures. A principal question is when are national rules reasonable, and when do they constitute protectionism? Discrimination against foreign suppliers may be considered inappropriate and protectionist. However, particular countries may intentionally discriminate against foreign suppliers of cultural goods (such as films, television programmes, or advertising) that can be seen as eroding their cultural identity. It may also be that national policy makers want to tie foreign service providers to concessions in the field of the transfer of technology or employment. The policy challenge will be to find the equilibrium between the legitimate domestic concerns of national governments and the free trade rules of multilateral arrangements such as concluded by the GATT negotiations.

In the GATT multilateral negotiations on traded services much emphasis was laid on such standards as 'market access', and 'national treatment'. The latter means that foreign companies should be treated like national firms. This rules out any local protection of domestic service industries, inhibits the development of indigenous service industries, and diminishes local control over key service industries. Once one realizes that among such industries are the mass media, telecommunication services, advertising, marketing, and tourism, it is clear that the application of these norms reduces local cultural autonomy. Local cultural markets are monopolized by transnational corporations that leave little space for local cultural providers. Liberalizing world trade to the extent that smaller and less resource-rich countries open their services markets to outsiders, erodes the competitive capacity of people's own cultural industries. Providing open access to local markets has promoted in many countries the commercialization of their information systems. Where public broadcast systems have gone commercial, the issue has arisen whether this leads to a massive inflow of US produced TV materials or to increased opportunities for domestic TV production. It is likely that at least in the short term the creation of free TV markets would reinforce the controlling position of US exports of TV and film. This dominance to a large extent follows fairly simple economic mechanisms. The US exporters operate from a very large domestic market that provides the economic resources for a level of investment that facilitates the production of feature films and series that easily have a competitive edge in the world market. Commercialization may lead to price wars for the acquisition of successful foreign programmes. This could benefit the foreign sellers, but could also make the domestic alternative an attractive proposition. (Waterman. 1988: 147). It could be that commercial broadcast systems yield improved revenue bases as channel capacity increases. Initially this could indeed lead to more foreign imports, but with more advertising capacity it could create the resource base for more domestic productions. Waterman argues this on the basis of the premise that audiences prefer programmes produced within their own country. (Waterman. 1988: 144).

Liberalization has also facilitated the developments of markets for pay-TV. It is likely that in most pay-TV operations the dominant programme fare will be movies made in the USA. This is so because the USA still maintains a strong competitive advantage in markets for motion pictures and pre-recorded video-cassettes.

In any case it is likely that the pressures of liberalization will lead to more commercial programming to meet the demand of advertisers for large audiences. It will also render the public interest aspirations sought by broadcasters in many countries ever harder to attain. An important policy issue in this connection is whether measures to establish national or regional import quotas are effective in stimulating more domestic production. "In order for import quotas governing one media to be effective, alternative delivery systems must also be controlled. A profound blow to this possibility has been forever dealt by the videocassette recorder, a technology whose diffusion and usage is defiant of public control". (Waterman. 1988: 150).

Liberalization stimulates an explosive growth of communication markets and thus the question arises which companies will win the race. Many of them are looking for alliances that would give them a better position in the market. As a result, liberalization may not necessarily mean de-monopolization. It may in fact lead to more concentration. As the technological convergence leads to institutional convergence the outcome may be that a whole range of formerly separated communication channels (phone, broadcasting, computers, publishing) end up under the umbrella of one mega-conglomerate.


3.3. ACTIVITY II. Take 10 minutes for each comment.

Comment on the following statements:

A. 'Liberalization of the world communication market will lead to more competition and thus benefit consumers worldwide'.

B. 'Liberalization will benefit the largest operators more than consumers. It will consolidate their control over products and prices on the world communication market'.



4.1. WHAT IS CONSOLIDATION? All signals, whether they carry sound, data, or pictures, converge into the digital format. They become, however different in substance, identical in the technical sense. As a result, telecommunication and broadcasting integrate, i.e. telecommunication services can be provided by TV cable networks or TV signals can be carried by telecommunication operators. Although today it is still possible to distinguish computer manufacturers, telephone service companies, publishing houses, broadcasters, and film producers as separate industrial actors, they are rapidly converging into one industrial activity. Increasingly, control on the world communication market is consolidated in the hands of a few mega-conglomerates. The emerging mega-industries combine message production (ranging from digital libraries to TV entertainment), the manufacturing and operating of distribution systems (ranging from satellites to digital switches), and building the equipment for reception and processing of information (ranging from HDTV-sets to telephones). Illustrative is the Japanese company Sony which was already active in the equipment sector when it acquired through Columbia Pictures and CBS-records access to the message component.

Business Week has christened the early 1990s 'the Age of Consolidation. "Everywhere you look these days, archrivals are falling into each other's embrace". (Business Week, 1991: 40). Megamergers in both manufacturing and services sectors are emerging. Particularly the US economy provides stark illustrations in such sectors as banking and aviation. As Business Week describes consolidation "It was inaugurated during the dealmaking 1980s, which left airlines, tires, and appliances in the hands of virtual cartels. And it's being propelled by ferocious foreign competition, a sluggish and capacity-glutted U.S. economy, and swelling research-and-development costs. Now, the wave is rolling into fresh sectors of the economy -banking, insurance, pharmaceuticals, retailing, commercial real estate. It's even touching youthful industries such as software and biotechnology". (Business Week, 1991: 41).

In the mid-1990s there is worldwide evidence of a new merger boom across old and new industries that also affects the communications market. In all its segments there are clear trends towards a high rate of concentration and all indications are that this will continue throughout the 1990s. Companies are looking for alliances and create new combinations, like in the most publicized deal of 1994: the Viacom, Paramount and Blockbuster US$ 8.5 billion merger.

Some examples will illustrate concentration in the markets for audiovisual products, international news, telecommunications and computers.

Audiovisual Market. On the world market for AV products (estimated at US $ 156 billion in 1992) the top 12 AV companies control in 1993 over 40%. (see Table 2).


In 1994 the market shares of major Hollywood companies were:



Source: Daily Variety, 1995.


News Market. Also the international news market demonstrates a strong trend towards consolidation. For printed news there are on the world market (after the sales of UPI to Middle East Broadcasting), only Associated Press, Reuters, and Agence France Press. For visual news there are two leading agencies Reuters Television (the former Visnews) and World Television Network. Reuters TV supplies TV news to over 40 broadcasters in 85 countries reaching almost a half-billion households. WTN provides to 100 broadcasters in 85 countries reaching an audience of some three billion people. Second in line for international TV news production and distribution are BBC World Service and CNN. CNN distributes around the clock to over 200 subscribers. Per average day some 160 items are broadcast of which about 30 are international. CNN is available in over 700 million households worldwide and thousands of hotels. For the provision of TV news programmes to European audiences new alliances have been built between Reuters Holdings and British Sky Broadcasting (owned by Murdoch), Pearson and the BBC, and NBC and the Financial Times.

Telecommunication Market. The world telecommunication market generated US $ 535 billion in 1992. The top ten companies had a 45% share. Market analysts expect that by the year 2000 only five telecommunication megacompanies will control global networks. These are: AT&T, Cable & Wireless, MCI, United Telecom, and British Telecom.

Computer Market. The world market for computer hardware yielded in 1992 US $ 114 billion. The twenty biggest companies represented an 80% share of the market. Among them are IBM, Toshiba, Fujitsu, Apple Computer, Unisys, and Compaq Computer.

Among the key factors that explain consolidation are the following. 1. Recent years have seen a considerable increase in the scale at which the world communication market operates. In order to remain competitive on this market, many companies have begun to integrate formerly distinct operations. As a result conglomerates emerged that combine the production and distribution of hardware products (such as videocassettes) with the related software (movies). 2. In order for companies to operate competitively on global markets, they need to achieve dominance on domestic markets and thus shake-out domestic competitors. 3. In recent years some sectors of the industry, such as the publishing houses, have been particularly profitable, and had to find investments for their cash-flows. Acquiring competing companies did seem an attractive strategy. 4. In some cases (for example the merger between Time Inc. and Warner Communications) a mega-merger would seem the only option against the foreign invader on the home-market (in this case the German firm Bertelsmann).

Consolidation is not without its problems as the case of Sony has demonstrated. In late 1994 Sony disclosed it had written off US$ 2.7 billion from its acquisition of Columbia Pictures. In dealing with the complexities of Hollywood the company had made some very expensive mistakes in film projects with high costs and poor box office results. In the early 1990s most mega-companies had very large debts to cope with. Time-Warner for example had a 16 billion dollar debt on its books, Murdoch's News Corp. had 8 billion dollar debt and Sumner Redstone' MTV faced a debt of US $ 2,4 billion.



4.2.1. IMPLICATIONS FOR CONSUMERS: ACCESS AND CHOICE. A key question is what consolidation means for consumers' access to the products of the world communication market and how much choice they will have.

Consolidation hinders competition as it effectively creates monopolies or oligopolies.* In most sectors of the economy this is to the disadvantage of the consumer. Conglomerates that control a market can use their market power to 'price-gouge consumers'. This means that in the initial stages of consolidation prices go down, but once the market is settled, there is a strong likelihood of rapidly increasing costs to consumers. This may easily mean that the access to information becomes dependent upon the level of disposable income. This implies that income differences exacerbate already existing disparities between information-rich and information-poor within and between nations.

Another problem is that -ideally- consumers should have access to a large variety of autonomous media managed by a diversity of individuals and groups. Consolidation may effectively diminish the number of channels that people have at their disposal to express or receive opinions. In consolidated markets it thus becomes easier for the controlling interests to refuse the distribution of certain opinions.

It is therefore relevant to question whether consolidation does guarantee sufficient independent locations for media workers, does it guarantee enough channels for audience reception and/or access, does it provide adequate protection against price controls on oligopolistic markets, and does it permit newcomers on markets? Even if the oligopolist would demonstrate quality, fairness, diversity, critical debate, objectivity, investigative reporting, resistance to external pressures in his offerings to the market place, there would still be reason to provide regulatory correction as the market place would effectively be closed for newcomers and thus not constitute a free market.

Is consolidation incompatible with the freedom of expression? The Strasbourg Court of Human Rights has judged (November 23, 1993, in Informationsverein Lentia a.o. vs. Austria) that the Austrian public broadcasting monopoly is incompatible with the freedom of expression. The Court stressed that states have a responsibility to guarantee an effective pluralism of information. If private broadcasters could use this principle against state monopoly, the question arises whether it could also be used against private monopolies?

Consolidation can erode the diversity of informational and cultural production. However, this is not always the case. It can be attractive for the oligopolist to bring competing products on the market. We see this happening quite commonly in such sectors as cosmetics or detergents. This intra-firm diversity helps to erect very effective obstacles against the market-entry of newcomers. This is important since market diversity frequently originates with new entrants. It is also true that large firms may support loss-making operations by compensating the losses elsewhere in the company accounts. In this way newspapers, for example, that otherwise would have disappeared can be maintained. However, the length of time this compensation will be acceptable to shareholders (and in particular institutional investors) is limited. Moreover, losses accumulate over time and in the middle- to longer term, products that are not profitable will have to be removed. In cases where consolidation occurs as vertical integration, meaning that production and distribution are controlled by the same actors, the real danger exists that they will exclusively offer their own products to the market. A common example is the newspaper that as part of a conglomerate places mainly reviews of its own books. The growing influence of institutional investors and commercial interests not genuine to the information sector tends to lead to an emphasis on the profitability of the commodity, rather than on its socio-cultural quality. As a result there is a preference for products that can be rapidly sold on mass markets. Illustrative of this is the tendency among film production companies and recorded music producers to concentrate on "blockbusters". This "Rambo" and "Madonna" tendency reinforces a homogenization of markets as the less profitable products are avoided. Markets tend inevitably towards identical, though marginally distinct, products since they address of necessity the largest possible number of buyers. Allowing competition on the marketplace does not necessarily lead to more diversity. There is some evidence that the deregulated, competitive broadcast systems of West European countries reflect less diversity in contents than the formerly regulated, public monopolies. This is largely due to the fact that on a competitive market the actors all try to control the largest segment by catering to rather similar tastes and preferences of that market segment.


4.2.2. INDEPENDENCE OF PERFORMANCE. An important issue is also the level of independence in information provision. Industrial concentration inevitably implies the establishment of power. The mega- mediacompanies are centres of power that are at the same time linked into other circuits of power, such as the financial institutions, the military establishments, and the political elite. A problem arises when the mass media that provide news and commentary are part of an industrial conglomerate. The conglomerate may engage in activities that call for critical scrutiny by the media, but that the controlling actors prefer to protect against exposure. The close interlocks between the US media and the military contractors may have contributed to the partisan way in which the Gulf war was reported. The National Broadcasting Corporation (one of the three leading US networks) is owned by General Electric. "As it turns out, GE designed, manufactured or supplied parts or maintenance for nearly every important weapons system employed by the USA during the Gulf War, including the much-praised Patriot and Tomahawk Cruise missiles, the Stealth bomber, the B-52 bomber, the AWACS plane, the Apache and Cobra helicopters and the NAVSTAR spy satellite system. Few TV viewers in the USA were aware of the inherent conflict of interest whenever NBC correspondents and consultants hailed the performance of US weapons. In nearly every instance, they were extolling equipment made by GE, the corporation that pays their salaries". (Lee. 1991: 29.). As a former NBC employee observed, "The whole notion of freedom of the press becomes a contradiction when the people who own the media are the people who need to be reported on". (Lee. 1991: 29). The independence of information provision is particularly important for democratic societies. At the core of democracy is the presence of a public debate about the distribution and execution of power. It is crucial for democratic arrangements that choices made by the power holders are publicly scrutinized and contested. In the public debate the informational and cultural products play a significant role. If the interests of the information and culture producers and the powers that be are intertwined, a society's capacity for democratic government is seriously undermined.


4.3. ACTIVITY III. Take 10 minutes.

Describe in a brief statement how you think the world communication market will look in the year 2025.




5.1. WHAT IS GLOBALIZATION? Globalization means that the world communication market expands and affects more and more local markets.

America's hottest export item to-day is pop culture. US movies, music, TV programming and home video now account for some US $8 billion trade surplus. Top sellers are Mickey Mouse, Madonna, Michael Jackson, McDonald's Burgers, Levi's jeans and Cola. In the past five years the overseas revenues of Hollywood studios have doubled. The US $20 billion music industry collects some 70% outside the USA. There is world-wide a clear trend towards an increasing demand for the American-brand entertainment. As the Fortune magazine observed "Around the globe, folks just can't get enough of America". (Fortune, 1990: 28). A remarkable feature of this trend is that Europeans and Japanese are buying into this successful export commodity. Of the five global record companies, Warner, CBS, EMI, and Polygram, only Warner is still an American corporation. The Japanese have invested in the past years some $12 billion in the US entertainment companies. In November 1990 Japanese hardware manufacturer Matsushita bought MCA for US $ 6 billion and acquired with this purchase: Universal Studios, Universal Pictures and MCA Records. Foreign investors have acquired traditional US film "majors", such as Twentieth Century Fox (acquired in 1985 by Rupert Murdoch's News Corporation) and Columbia Pictures (purchased by Japanese Sony in 1989 for 3,4 billion US dollars).

The very big media companies have outgrown their saturated home markets and the logical way towards further growth is cross-border expansion. In particular West European and Japanese firms entered the US market loaded with cash from very stable and profitable revenues. There are obviously also movements from US companies towards European markets. European and US firms have also begun to invade the promising consumer markets of the Asian region. Murdoch's News Corporation provides an excellent illustration. On July 26, 1993 the owner of Star-TV Hong Kong billionaire Li Ka-shing sold 64% of this first Asian satellite TV network to Murdoch for US $ 525 million. As Business Week projects, "With Star, Murdoch now has a signal that will reach 70% of the world's population by 1995, from Japan to the Middle East". (Business Week, 1993: 21). The deal between Li Ka-shing and Murdoch was largely motivated by the pressure on his network caused by the announcement of Turner (CNN which spends some US$ 15 million to develop production capacity in Asia), Time-Warner's Home Box Office (on cable in some eight Asian countries), Capital Cities/ABC ESPN (the sports network), the Discovery Channel, and Hong Kong-based Television Broadcasting Inc. to compete with Star TV in 1994 after the launch of a Chinese communications satellite. Other companies entering the huge Asian markets are Dow Jones & Co. and NBC. Both firms are interested in promoting business broadcast news from operations based in Singapore and Hong Kong.

Among the driving forces of the globalization processes, we find the following factors.

Technological development. Technological innovations, especially in the field of informatics, telecommunications and their convergence have largely facilitated processes of globalization. In fact, one could argue that communication/information technologies provide the essential infrastructure for global transactions.

Financial markets. In the 1970s financial markets began to expand and offshore financial operations proliferated across the globe. As a result vast amounts of money began to circulate outside the jurisdiction of national governments. This triggered off the acceleration of globalization processes. The enormous growth of trade. Sweeping reductions in costs of air travel and shipping have facilitated phenomenal expansion of cross-border trading. In the process, not only has the volume of trade enormously increased, but also its character has considerably changed. The steeply rising costs of developing new technologies and new products have forced companies to employ on the emerging global markets the use of global brand-names and global advertising. Politics. Increasingly in many countries the political climate is very supportive of globalization processes. The creation of global electronic networks, for example, is largely facilitated through the privatization of public telecommunication services, the liberalization of electronics markets, and the deregulation of tariff structures. All such political and regulatory measures are intended to accommodate the claims of the large corporate users of world communication.



5.2.1. HOW GLOBAL IS GLOBAL? There are undeniably globalization processes at work today. However, despite these realities, there is a strong likelihood that we currently see the emergence of a "fragmented globalism" of the world economy (Lanvin. 1991: 99). A remarkable feature of much discourse on globalization is that it completely bypasses the fact that the world is very starkly divided and fractured on many counts. Highly visible fissures are present in the growing economic disparities between both the North and the South and between different social groups within nations. In the field of world communication, one certainly has to ask 'how global is global'? There remains today in the communication field a stark disparity between the affluent industrial nations and the countries of the Third World. The availability of telephone lines provides a good illustration.


The distribution of telephone lines in the world (1992)




Europe 31.9

North America 30.2

Japan 10.5

Asia 8.7

Latin America 3.8

Africa 1.7

Middle East 1.6

 (SOURCE: International Telecommunication Union).


If there is a global communications party, the majority of the world's population has not yet been invited to join. As Vijay Menon asks, "But how much a part of the global village is Asia?". (Menon. 1993: 29). As the technological infrastructures remain very expensive to acquire and maintain, an important issue will be the possibility that only a limited number of actors will have access to the emerging global circuits. It may well be that the developing countries will experience a "selective short-circuiting" (Lanvin. 1991: 99) of their trading opportunities.


5.2.2. TOWARDS A GLOBAL CULTURE? As the communication conglomerates extend their activities to more countries, the production of culture and information takes on a cosmopolitan hue and suggests the emergence of a global culture. The worldwide proliferation of standardized food, clothing, music, TV drama, Anglosaxon business style and linguistic convention, creates the impression of an unprecedented cultural homogenization.

We can indeed observe a rapid transnational proliferation of mass-market advertising and electronic entertainment produced by a handful of mega-conglomerates. There is a worldwide spread of commercially packaged cultural products. A uniform consumerist lifestyle is aggressively marketed across the globe. One could, however, argue that this 'McDonaldization' of the world does not yet create a uniform, global culture. And one could correctly point to the distinct cultural entities in the world to which the manifold inter-ethnic conflicts are ever so many dramatic testimonies. Or, one could cite the fact that non-Western values are by no means extinct and that an impressive volume of local customs is very much alive around the world. But even if "global culture" is not an adequate category of analysis, there is undoubtedly a process of "cultural globalization". A lively expression of this process are the Disney amusement parks, whether in Tokyo Disneyland or Paris Disneyland that opened in the spring of 1992. "We're going to be American because America sells really well", says Robert Fitzpatrick, president of Euro Disneyland, the 5,000-acre park just East of Paris. The French who occasionally have expressed strong fears of US cultural imperialism have received "this shrine of American pop culture" enthusiastically despite some critics describing the Disney invasion as a "cultural Chernobyl" (Marguerite Duras). As a matter of fact the French government has reduced the value added tax on theme parks from 18.6 % to 7%, lent 4 billion francs at preferential rates and provided 2.7 billion francs in infrastructure improvements, such as highways and rail roads. (International Herald Tribune, 1992: 1). Ironically, it turns out that Euro Disney is not very successful and has lost already over US$ 1 billion. Among the arguments for the limited interest that French people show for the American project, is that no wine drinking is allowed in the amusement park.

Probably the greatest success story of the process of cultural globalization is its marketing of consumerism. "McDonaldization" teaches people around the world very persuasively how to be consumers. The aggressive around-the-clock advertising, the promotion of resource-intensive lifestyles, the competitive advantage against local cultural providers, and the obstruction of local initiative, all converge into a reduction of local cultural space.

The process of cultural globalization has given rise to a concern about the nationality of media-ownership. Ironically, particularly in the USA, there has been an expression of serious worry about the Japanese take-over of traditional Hollywood companies. However, this concern tends to lead attention away from the more basic problem: globalization increases the mega-corporate control over the provision of information and culture. As Schiller writes, "The daily instruction of most Americans is now in the hands not of the schools but of the corporate multimedia packagers". (Schiller. 1990: 829). There would seem a very realistic chance that the "Lords of the Global Village" (Bagdikian. 1989) will control before the turn of the century most of the world's expression, creativity, and instruction. With the globalization of informational and cultural production, not only US transnational companies, but equally Dutch, German, or Japanese firms use information and culture to sell consumerism across the globe. Maintaining American style and production values, media products have now become "the generic material for all transnationals, whatever their ownership base". Fusing different sources of capital, the global transnational information and cultural producers are "turning the world into a shopping mall for those with sufficient disposable income". (Schiller. 1993: 29 and 40).

In the past years global operators have understood that adaptations to local taste make their exploits even more successful. The performance of the music television station, MTV, on the Asian markets is a good case in point. MTV beams its signals to Asian audiences through one of the channels on Satellite Television Asian Region (STAR TV). This Hong Kong based satellite operator reaches out to some 3.75 million households in Asian countries. With many Asian youngsters ready to spend on global tastes this is clearly a promising market for MTV advertisers. In order to accommodate local taste, some 20% of MTV programming is Asian. This includes the promotion of Thai and Chinese pop stars and Mandarin sung Mando-Rock music. MTV's products may be regionally customized, but its prime orientation remains to offer advertisers a profitable market for consumer products and to lure consumers, particularly young ones, to watch its programmes and in the process influence their tastes, life styles, and moral values.

This cultural adaptation is also a concern of those TV companies that are trying to cash in on the expansion of payTV markets in Latin America. Among the contenders are Turner Broadcasting, ESPN, NBC (with 24 hour Spanish-language news), MTV Latino, and Murdoch's Fox Latin America channel. Although payTV only reaches a limited portion of Latin American TV households, it represents an affluent and a growing market for advertisers. In order to make the programmes more acceptable to local audiences, they are given Latin looks. As the vice-president of Fox Latin America commented, "you have to add the salsa to it". (Fortune, 1990: 34). Opinions differ regarding the effect of cultural globalization. For the Asian region one finds those defending an optimist position, "We in Asia have a particular advantage..nobody has yet moulded us....even in the most economically advanced Asian societies, we are a very tradition-minded people". (Joseph Wang, advertising expert from Hong Kong quoted by Menon. 1993: 31) against anthropologist Santasombat from Thailand (Yos Santasombat, quoted by Menon. 1993: 31) "Thai society today is indeed in a state of confusion and expedient westernisation. McDonalds, Burger King, Dunkin Donuts. Fast foods and fast profits--Thai culture and traditions are becoming obsolete and irrelevant, if not outright obstacles to modernisation and westernisation".

The concern about the cultural and economic impact of cultural globalization is not restricted to Third World countries. The expansion of the US cultural industries has become a hot political issue in Europe. In September 1993 the French audiovisual industry took the initiative to protest against the inclusion of audiovisual products in the final text of the Uruguay Round GATT negotiations. In these negotiations, the USA demanded that the world trade in audiovisual products follows the principles of a free trade regime. This implied that a variety of protectionist measures (such as national import quota and state subsidies) which are common in European countries would have to be abandoned. The European film industry was concerned that subjecting its sector to free trade would promote a global spread of Hollywood materials and the effective annihilation of European culture. European concerns about Hollywood films are largely based upon the existing trade deficit with the USA in audiovisual trade and the fact that over half of the movies exhibited in European cinemas are made in the USA against only 2% European films released in the USA. For example: in the UK US-made movies get 84 % of box office receipts, in Germany this is 82%, and in France 58%. The GATT accord that was concluded in mid-December 1993 did not include the sector of audiovisual services. The most powerful players were divided between a free trade perspective promoted by the USA and a cultural policy perspective defended by the European Union. In the course of 1994 the key US actors (such as the Motion Pictures Export Association) and the European Commission began to negotiate a reconciliation of positions.


5.3. ACTIVITY IV. Take 10 minutes to answer the following question:.

Is the European (and especially the French) concern about US cultural imperialism justified?




Digitization means that the processing of information is increasingly done with digital technologies (which represent signals in digital form, i.e. with the use of digits). Digital technologies are the backbone of the projected global information superhighway. The main issues in connection with digitization are: the protection of privacy and security.

Liberalization is the regulatory effort to promote open and competitive markets. It represents the position that there should be no trade barriers for the world communication market. The main issues in connection with liberalization are: the protection of universal service and infant markets in less powerful countries and the commercialization of information services.

Consolidation means that fewer companies control a greater share of the market. The main issues in connection with consolidation are: the accessibility and the diversity of supply on the communication market as well as the independence of information providers.

Globalization means that the world communication market extends to and affects more and more local markets. The main issues in connection with globalization are: the persisting communication gap in the 'global village' and the process of cultural globalization.




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Business Week, 1991. October 14. Business Week, 1993. August 9.

Forester, T. & Morrison, P. (1990) Computer Unreliability and Social Vulnerability. In Futures. Vol. 22. No. 5. 462-474.

Fortune, 1990. December 31.

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Lee, M.A. (1991). Arms and the media: business as usual. In Index on Censorship. 10. 29-31. Menon, V. (1993). Tradition meets modernity on the path to the global village. In Intermedia. Vol. 21. No 1. 29-31.

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Schiller, D. & Fregoso, R.L. (1991). A private view of the digital world. In Telecommunications Policy. Vol. 15. No. 3. 195-208.

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Throughout this text the term world communication* will be used. I prefer this term against other concepts such as 'global communication' or 'international communication'. The adjective 'international' is too restrictive. What I address goes beyond the relations between states. It involves the interactions of both states and non-state actors. The arena of these interactions is more adequately described as 'world politics' than as 'international relations'. Cross-border politics can no longer be understood as relations between nation-states as exclusive actors. The world political arena counts today multiple actors. They include intergovernmental organizations, transnational corporations, social movements and individuals. But why not use 'global communication'? In my view there are certainly processes of globalization for example in the cultural area, but there is not yet a global culture. Globalization suggests the movement towards a one-world community. We are only on the way and the use of the term 'global' suggests we have achieved this condition. A global society is an aspiration, not yet reality. Global communication represents a goal rather than a reality.

GATT* stands for General Agreement on Tariffs and Trade. This multilateral organization for international trade policy was established in 1948. The basic aim of GATT is to liberalize world trade. Seven major negotiating conferences (known as 'Rounds') have brought about far-reaching reductions in tariffs and other trade barriers. In September 1986, the GATT ministers of trade launched at Punta del Este, Uruguay, the eighth Round of Multilateral Trade Negotiations. This Uruguaya Round was concluded in December 1993 and the final agreement was signed by Heads of State in April 1994 in Morocco. The agreement will be administered by the successor to the GATT: the World Trade Organization.

INTELSAT* stands for the International Telecommunications Satellite Organization. Intelsat was established by international agreement on Fenruary 12, 1973. The prime objective of the organization is to provide -on a commercial basis- satellite services for public telecommunications. Its main policy making body consists of all the member States. Although Intelsat is a commercial operation it is not a profit-making organization. SWIFT* stands for the Society for Worldwide Interbank Financial Telecommunications. SWIFT was established in May 1973. To-day it handles most of the world's financial traffic through operating centres in Belgium, the Netherlands and the USA.

Oligopoly* this term refers to a situation in which a market is controlled by only a few operators. In a monopoly situation a market is controlled by only one operator.

The G-7* consists of USA, Japan, UK, France, Germany, Italy, and Canada.


Table 1 The top fifteen media conglomerates in the world


Media revenues in 1993 in million US$

THORN-EMI UK 3.326  


Source: Statistical Yearbook 1994-1995, Cinema, Television, Video and New Media in Europe; European Audiovisual Observatory, Strasbourg, Council of Europe, 1994)


Box 1. The world's largest advertising agencies


  1. WPP(UK) includes Ogilvy & mather, J. Walter Thompson.
  2. Saatchi & Saatchi (UK) includes Backer, Spielvogel, Bates.
  3. Interpublic (USA) includes McCanErickson, Lintas
  4. Omnicom (USA) includes BBDO, DDB, Needham
  5. Dentsy (Japan)
  6. Young & Rubicam (USA)
  7. Eurocom (France)



Box 2.

The world's largest telecommunication operators

Revenues in US $ billions


AT&T USA 67,2 N.T.T. JAPAN 60





Table 2. The twelve top AV companies in 1993

AV revenues in millions US$











CBS USA 3.510



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