Theories of the Information Society, Third Edition - Cryptome

INFORMATION AND THE MARKET
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20 per cent stake in MCI (Microwave Communications Inc.), the second-largest
US long-distance telecommunications company, and later entered into an
agreement with North American giant AT&T to pool cross-border assets. The
motive behind these actions was to advance a market-orientated strategy which
recognised, first, that the fastest growth area of the market was increasingly international
and, second, that the really critical international market was that made
up of corporate traffic. Concert, the joint venture between BT and AT&T which
began in 2000, targeted ‘multinational business customers’. BT was clear-minded
about this, recognising that ‘[t]he largest customers . . . are typically multinational
companies with branches throughout the developed world’ (British Telecom,
1990, p. 6). Accordingly, BT had a ‘highly-focussed strategy of supplying networks
and network-based services to multinational companies’ (British Telecom, 1993,
p. 25). The stake in MCI, the alliance with AT&T and a cluster of partnerships
with European corporations were intended to enable BT to become a global leader
in the provision of corporate network services. That these ambitious ventures
dramatically failed (Concert was closed in 2001, and merger with MCI stalled)
takes nothing from the major issue, that there was no comparable push to improve
services to everyday domestic users. The aim of the investment is to provide a
global network for the 25,000-odd transnational corporations that offers them the
enhanced voice and data services essential for their effective operation. BT,
perhaps burned by several failures, has more recently emphasised ‘strategic partnerships’
with the likes of Cisco, Microsoft and Intel to best position for success
in turbulent circumstances.
BT feels no embarrassment by its prioritisation of the business market since
it reasons this ‘will be the source of the improvements in service and in techniques
which will subsequently feed down to the residential market’ (British
Telecom, 1990, p. 6). This is, of course, the ‘trickle down’ theory of economics
applied to the ‘information revolution’.
Third, BT has reduced its staffing while increasing its revenues: from a peak
workforce of about 250,000 in 1989, it dropped to 150,000 by the end of 1993,
and to just 91,000 in 2005.
None of this should be read as a complaint against BT. Rather it should be
seen as an exemplification of the primary role in developments in the information
domain of market principles and priorities. Largely freed from former restrictions
stemming from its days as a publicly owned monopoly, Britain’s telecommunications
giant acts like any other private corporation. Its aim is to succeed in the
market, and its services and practices are tailored to that end. If that means price
rises over the odds for ordinary householders, labour layoffs and targeting of the
wealthiest clients for new information services, then so be it. That is the logic of
the market and the reasonable response of an entrepreneurial management.
Finally, however, we might draw particular attention to the constraints this
market milieu imposes on participants such as BT. It is easy to believe that the
adoption of market practices is largely a matter of choice for companies such as
BT, but this is far from the case. Indeed, there are massive pressures disposing
them towards certain policies. One overwhelming imperative is that the provision
and servicing of information networks, while crucial for corporations in their
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