Many months back we wrote about Movistar/Telefonica’s rural franchising scheme. Well it has become a reality, and it seems the local franchisee in Oaxaca is intent on following us around and attempting to install wherever we have already established our networks. While on the one hand this is a positive step – these communities have been practically begging to be connected for over a decade, on the other hand it represents the worst aspects of business-as-usual with regards to this and other telecom companies.
There are two aspects to what is going on in the Sierra that are most objectionable. The first is that the community must pay for all the upfront capital costs of setting up the network in order to have the “opportunity” to pay the exorbitant rates the incumbent providers charge per minute. The second aspect is that, at least with regards to the Movistar franchisee in Oaxaca, there is a very clear intention to descredit the work of Rhizomatica and our community partners by claiming we are operating pirate networks.
Here is what is going on: the Movistar franchisee has partnered with a local politician, and the two, it seems, have started some sort of shady business venture in which the politician puts up a small part of the money and convinces the villages to put up much more (around $40,000 USD). Then, perhaps, the franchisee and the politician split up the money, possibly greasing the palms of some of the local authorities. In order to convince villages to spend this amount of money, the local politician actively defames us and our model, which costs about 20% of the total cost of the Movistar option. All of this is nothing new. What is unfortunate is how the franchise model has been totally distorted and is being used to extract money from the local economy, rather than sharing a part of the money generated by the traffic, as originally proposed.
Oswaldo Martinez, the coordinator of Fundacion Santa Maria, Rhizomatica’s partner in Santa Maria Yaviche, Oaxaca, was recently interviewed by the state’s most important newspaper about this issue and stated, “it’s good that [the telecom companies] are coming, provided they respect us and vice versa, because we are competing legally. We want people to decide which of the two options to opt for based on a comparison of quality and costs … people who have money, go ahead and spend it, but we will continue with our project”.
According to Movistar’s own documents regarding the franchising model, the local operator keeps around 40% of the profit from the traffic, under the assumption that they (the local operator) have made a capital investment to put up the network. What is happening in the Sierra is that this capital or investment costs are being passed on to the communities themselves and none of the profit is being shared with them. Instead, it is all taken by the franchisee, who risked nothing. We have heard that America Movil/Telcel, the country’s largest, causi-monopoly operator is doing something similar in rural areas, requiring investment by the community of up to $90,000 USD (1.2 million pesos) in order to have service. Although a jaw-dropping figure, at least they don’t pretend to have any intention of sharing profits with the communities.
Speaking about the entrance of the large telecom companies under these new schemes, Oswaldo offered the following: “unfortunately, for our indigenous communities, the looting continues. A few are getting rich while the rest of us pay expensive service costs. In the case of phone calls, they are very expensive, but now we understand that there is a difference between what the service is really worth and the price we pay. A real and affordable rate is our right”.
The issue is not only economic. This situation is also telling of the way that these multinational corporations operate and their abhorance of competition and, god-forbid, conceiving of telecommunications as anything other than a money-making venture. Rhizomatica decided to work in the Sierra Juarez because we feel confident that the communities can resist the logic of capital and the way telecommunications and other services attempt to introduce this logic.
Oswaldo’s words are important in this respect. “What we seek is to restore autonomy to the people; that the State give us … concessions to operate our own communication services … The community telephone network supports our organization’s ability to generate alternatives … and share options that apply knowledge to [increase the quality of] daily life.”
Oswaldo Martínez, promotor comunitario de la Fundación Santa María en Yaviche nos habla de los usos y beneficios de la Telefonía Celular Comunitaria en su comunidad y nos enseña como funcionan los equipos.
Oswaldo Martínez, a community activist with Fundación Santa Maria in Yaviche talks about the uses and benefits of the Community Cellular Telephony system in his community and shows us how the equipment works. [VIDEO in Spanish. Subtitles coming soon.]
First off, an apology to folks who have supported us and continue to follow our work for not being more steady with the posts on the site. Lots has happened and we have less and less time to keep the site and social media updated. We are excited about a whole bunch of stuff that has happened recently.
As of last week, Rhizomatica operates 3 cellular networks in the Sierra Norte of Oaxaca and two additional networks in the Chinantla area of Oaxaca in conjunction with a local partner. With this 5 networks we should be connection our 1,000th customer any day now. We are planning a more than dozen installations in Oaxaca and Puebla before year’s end. We have also received lots of interest from other countries in Latin America who are interested in replicating our model.
But the biggest news is that we finally have possession of our concession papers. The concession was never really in doubt, but it took forever to actually be able to go and pick up the piece of paper from the government. Officially, we are allowed to work in 5 Mexican states (Oaxaca, Puebla, Veracruz, Tlaxcala and Guerrero) in the 850mHz band for the next two years. We are also waiting for the secondary Telecom laws to be finalized, at which point we will request a more permanent concession, allowed under the new law.
Continuing on the legal front, but at the international level, we had the good fortune to attend the recent World Telecommunication Development Conference in Dubai and continue our collaborative efforts with the Mexican government to find innovative solutions for how to connect rural and remote populations. We have been working on the proposal that became Recommendation 19 of the ITU-D on Telecommunications for rural and remote areas for some months now, shepherding it through the various committees and regional meetings. Now that it has finally passed, we’d like to explain a bit more about it, and how it could be useful.
The purpose of the recommendation is to recognize the lack of robust policies to connect rural and remote populations, and try to crystallize some of the positive experiences from around the world that use emerging technologies to provide broadband and other telecommunications to decrease costs, increase range and capacity and that make connecting rural areas a feasible option.
We would like to highlight two aspects that the resolution deals with, amongst many. First, the use of new spectrum access approaches that recognize that rural and remote areas have huge amounts of unused spectrum available. However, there are many regulatory bottlenecks to overcome for locals to be able to run their own services.
Second, telecommunication/ICT services and applications can be provided by small and medium enterprises, local governments, non-governmental organizations using appropriate business models and the need to develop local technical expertise and adoption capacity to operate such services as well as maintenance and operation programs in order to keep the infrastructure and associated equipment in good working condition.
For us, these two aspects are the root cause of why so many places on earth are not connected: none of the traditional providers see the benefit and those who want the service (local people, their governments and organizations) are many times blocked from even trying to get something off the ground by a lack of access to spectrum, training, and so on. At least now we have made a small step towards gaining recognition at the international level for initiatives like ours. And the best part is that wherever you are, your country has already adopted this recommendation!
Thanks for sticking with us and stay tuned for more information. We will be at HOPE X in NYC this summer if you want to catch up with us personally, otherwise we’ll be here in Mexico, as always.