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Institutions and Collective Action: The New Telecommunications in Western Europe

  • Wayne Sandholtz (a1)
Abstract

The member states of the European community are not just liberalizing telecommunications but are cooperating extensively in the sector. Breaking with a past dominated by rigid national monopolies (the PTTs), EC states in the 1980s undertook collective action in research and development, planning future networks, setting standards, and opening markets. This article seeks to explain telecoms liberalization and cooperation in Europe. Two conditions are necessary for international collective action to emerge. The first is policy adaptation at the national level, such that governments are willing to consider alternatives to pure unilateralism. In telecommunications, technological changes induced widespread policy adaptation in EC states. This adaptation was a necessary prerequisite for European cooperation. The second necessary condition is international leadership to organize the collective action. This paper extends the analysis of international leadership by outlining the conditions under which international organizations can exercise leadership to organize collective action. The case study, focusing on three dimensions of EC telecoms reform, shows how the Commission of the EC led in organizing collective action.

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1 Cowhey, Peter F., “The International Telecommunications Regime: The Political Roots of Regimes for High Technology,” International Organization 44 (Spring 1990); Krasner, Stephen D., “Global Communications and National Power: Life on the Pareto Frontier,” World Politics 43 (April 1991).

2 At June 1992 exchange rates, that would amount to U.S. $645 billion.

3 Commission of the European Communities (CEC), Establishing Advanced Communications in Europe: IBC Strategic Audit 1988 (Brussels: CEC, February 1989), 1.

4 Bar, François and Borrus, Michael, “Information Networks and Competitive Advantage,” in Organization for Economic Cooperation and Development and the Berkeley Roundtable on the International Economy (OECD-BRIE), Information Networks and Business Strategies (Berkeley: Berkeley Roundtable on the International Economy, October 1989), 3.

5 For examples of this approach, see Zysman, John, Governments, Markets and Growth (Ithaca, N.Y.: Cornell University Press, 1983); Gourevitch, Peter, Politics in Hard Times (Ithaca, N.Y.: Cornell University Press, 1986); Katzenstein, Peter J. Corporatism and Change (Ithaca, N.Y.: Cornell University Press, 1984); and Hall, Peter, Governing the Economy (Oxford: Oxford University Press, 1986).

6 See Cowhey (fn. 1).

7 See Borrus, Michael et al., Telecommunications Development in Comparative Perspective: The New Telecommunications in Europe, Japan and the U.S., Working Paper no. 14 (Berkeley: Berkeley Roundtable on the International Economy, 1985).

8 Numerous sources discuss the technological and regulatory changes in telecommunications during the 1980s. See, e.g., Borrus et al. (fn. 7); Cowhey, Peter F., “Telecommunications,” in Gary Clyde Hufbauer, ed., Europe 1992: An American Perspective (Washington, D.C.: Brookings Institution, 1990); Hart, Jeffrey A., “The Politics of Global Competition in the Telecommunications Industry,” Information Society 5 (1988); Hills, Jill, Deregulating Telecoms: Competition and Control in the United States, Japan and Britain (London: Frances Pinter, 1986); Nguyen, Godefroy Dang, “Telecommunications: A Challenge to the Old Order,” in Sharp, Margaret, ed., Europe and the New Technologies (Ithaca, N.Y.: Cornell University Press, 1986); OECD, Telecommunications: Pressures and Policies for Change (Paris: OECD, 1983); Office of Technology Assessment, International Competition in Services, OTA-ITE-328 (Washington, D.C.: U.S. Government Printing Office, July 1987); Ungerer, Hubert, with Costello, Nicholas P., Telecommunications in Europe, European Perspectives Series (Brussels: Commission of the European Communities, 1988).

9 See Borrus et al. (fn. 7).

10 Roundtable of European Industrialists, Clearing the Lines: A User's View on Business Communications in Europe (Paris: European Roundtable, 1986), 912; Dawkins, William, “High EC Telephone Charges Attacked,” Financial Times, July 5, 1988, p. 2.

11 By “cooperation” I mean something more than a class of outcomes in strategic games. When actors' independent choices produce Pareto-optimal outcomes, the result is cooperation only in the sense in which game theorists use the term. For my purposes, cooperation in international politics requires policy adjustment by each player; it implies that each participant follows a course different from what it would have pursued in the absence of a joint effort. In this essay, I use the terms cooperation and collective action interchangeably. Cooperation, or collective action, occurs when a group of actors seeks to provide a good (public ot private) through agreed-upon joint means.

12 Haas, , When Knowledge Is Power (Berkeley: University of California Press, 1990); idem, “Why Collaborate? Issue-Linkage and International Regimes,” World Politics 32 (April 1980).

13 Keohane, , After Hegemony (Princeton: Princeton University Press, 1984), 63.

14 Haas, Peter M., “Do Regimes Matter? Epistemic Communities and Mediterranean Pollution Control,” International Organization 43 (Summer 1989).

15 Olson, , The Logic of Collective Action (Cambridge: Harvard University Press, 1965).

16 Frohlich, , Oppenheimer, , and Young, , Political Leadership and Collective Goods (Princeton: Princeton University Press, 1971), 6.

17 See Kindleberger, Charles, The World in Depression (Berkeley: University of California Press, 1973); Gilpin, Robert, U.S. Power and the Multinational Corporation (New York: Basic Books, 1975); Krasner, Stephen D., “State Power and the Structure of International Trade,” World Politics 28 (April 1976).

18 Young, , “Political Leadership and Regime Formation: On the Development of Institutions in International Society,’ International Organization 45 (Summer 1991).

19 See Sandholtz, Wayne, High-Tech Europe: The Politics of International Cooperation (Berkeley: University of California Press, 1992), chap. 2.

20 International organizations do not act or lead; their officials do. Thus when I write that ios do something, or exercise leadership, it is a shorthand for describing the actions of 10 officials.

21 Cox, and Jacobson, , The Anatomy of Influence (New Haven: Yale University Press, 1973), 20.

22 See Odell, John S., U.S. International Monetary Policy (Princeton: Princeton University Press, 1982), 367–71.

23 After January 1989 the powers to authorize rested with the Conseil Supérieur de l'Audiovisuel (CSA), which replaced the Commission Nationale de la Communication et des Libertés (CNCL) created by the Chirac government. A decree of May 1989 created a Direction de la Réglementation, which functions as an independent regulator. This paragraph relies on Coriat, Benjamin, “Regime reglementaire, structure de marché et competitivité d'entreprise,” in OECD-BRIE (fn. 4).

24 See Hart (fn. 8); and Cogez, Patrick, “Telecommunications in West Germany,” in Borrus, Michael et al., Telecommunications Development in Comparative Perspective: Appendix (Berkeley. Berkeley Roundtable on the International Economy, 1985).

25 “From Bundespost to Telekom,” Telecommunications Policy 11 (December 1987), 407–8; “RFA: Les recommandations (en substance) de la commission Witte,” Telecoms Magazine 8 (October 1987), 91.

26 A brief note on some of the institutions of the European Community might be in order. The Commission is the executive arm of the Community; its members are appointed by the member state governments but do not take instructions from them. The Council (its full name is the Council of Ministers) is the body in which national governments are represented and vote. For general EC business, the foreign ministers meet and vote. But ministers with other portfolios can also constitute a Council when the subject under discussion indicates it would be appropriate. For instance, the ministers of agriculture meet and vote on agricultural questions, ministers of research handle technology questions, and so on. Most EC laws and policies must be approved by the Council of Ministers; votes of the Council carry equal authority regardless of which set of ministers is involved. The European Council is composed of the heads of state or government. It meets three times per year and deals with broad issues. Major new policies and institutions are always agreed on at this level. Meetings of the European Council are also referred to as European summits, the terminology I will use in this paper so as to avoid confusion with the Council of Ministers.

27 Interviews conducted by the author in 1987. Officials interviewed were promised anonymity. Interview notes are in the author's possession.

28 Agence Europe, November 7, 1979, p. 8; Agence Europe, November 26, 1979, p. 9; Agence Europe, November 28, 1979, p. 5.

29 CEC, Communication from the Commission to the Council on the Status of the Community Telecommunications Policy, COM (85) 276 final (Brussels: CEC, 1985), 5.

30 Agence Europe, June 17, 1983, p. 10.

31 Interviews (see fn. 27); CEC, Communication from the Commission to the Council on Telecommunications, COM (84) 277 final (Brussels: CEC, 1984), 2; Agence Europe, November 7, 1983, p. 7.

32 CEC, Communication from the Commission to the Council on Telecommunications: Lines of Action, COM (83) 573 final (Brussels: CEC, 1983).

33 CEC (fn. 31), 3–7, 10.

34 For a detailed account of the origins and operation of the RACE program, see Sandholtz(fn. 19), chap. 8.

35 GEC, ICL, and Plessey from Britain; Bull, CGE, and Thomson from France; AEG, Nixdorf, and Siemens from Germany; Olivetti and STET from Italy; and Philips from the Netherlands.

36 ISDN is the next step in telecoms evolution. It will constitute a digital network capable of simultaneously carrying voice, text, high-speed data, and low-quality images.

37 CEC, Proposal for a Council Decision on a Preparatory Action for a Community Research and Development Programme in the Field of Telecommunications Technologies: R&D in Advanced Communications Technologies for Europe (RACE), Definition Phase, COM (85) 113 final (Brussels: CEC, 1985).

38 La Tribune, July 2, 1985; Le Monde, June 6, 1985.

39 CEC, Information and Communications Technologies in Europe, EUR 13413 EN (Brussels: CEC, 1991), 44; Agence Europe, March 7, 1991; CEC, Research and Development in Advanced Communications Technologies in Europe: RACE 1992 (Brussels: CEC, 1992), 1.

40 CEC, Towards a Dynamic European Economy: Green Paper on the Development of the Common Market for Telecommunications Services and Equipment, COM (87) 290 final (Brussels: CEC, 1987).

41 CEC, Information and Communications Technologies (fn. 39), 64.

42 Council Directive of April 29, 1991 (91/263/EEC), in Official Journal of the European Communities, no. L 128/1 (1991).

43 See, e.g., McKendrick, George G., “The INTUG View on the EEC Green Paper,” Telecommunications Policy 11 (December 1987), 325—29.

44 CEC, Towards a Competitive Community-wide Telecommunications Market in 1992: Implementing the Green Paper on the Development of the Common Market for Telecommunications Services and Equipment, State of Discussions and Proposals by the Commission, COM (88) 48 (Brussels: ECE, 1988).

45 Sunday Times (London), April 24, 1988, p. D6.

46 Target 92 (May 1991), p. 2.

47 Agence Europe, March 20, 1991; March 21, 1991.

48 Williamson, John, “Intervention Is the Slogan,” Financial Times, October 7, 1991, World Telecommunications Survey, p. 6.

49 Agence Europe, April 11, 1991.

50 Dawkins, William, “Ministers Baulk at EC Telecom Reform Plans,” Financial Times, July 1, 1988, p. 6. The definition of which services are “basic” and which are “value-added” is not that simple. In general, however, the consensus is that value-added services are those that involve something beyond simple transmission. Thus the transmission of a computer file in unchanged form is a basic service. Any sort of operation to alter the format or the content of the file would imply a value-added service. Clear examples of VANS include electronic mail, voice messaging, data banks, and videotex. The Commission argues that the only truly basicservice is voice telephony; the French argue that packet switching should be considered basic.

51 Dawkins, William, “EC May Delay Telecoms Move,” Financial Times, April 25, 1989, p. 24.

52 Dixon, Hugo, “Paris and Bonn Seek Accord on Telecom Market,” Financial Times, June 23, 1989, p. 2.

53 Dawkins, William, “Brussels and EC Countries Stake Out Telecoms Battle Lines,” Financial Times, May 5, 1989, p. 2.

54 Dickson, Tim, “EC Move to Open Telecoms Market,” Financial Times, December 8, 1989, p. 24; Times (London), December 9, 1989, p. 21.

55 Commission directive of June 28, 1990 (90/388/EEC), Official Journal of the European Communities, no. L 192/15 (1990).

56 Cowhey (fn. 8), 200; “Phone Service Monopoly under Review,” Eurecom 4 (February 1992), 3.

57 “EC Ministers Reach Agreement on ONP and Service Provision,” Telecommunicatie (January 1990), 11; Tim Dickson, “EC Move to Open Telecoms Market,” Financial T December 8, 1989, p. 24; Times (London), December 9, 1989, p. 21.

58 Council directive of June 28, 1990 (90/387/EEC), Official Journal of the European communities, no. L 192/2 (1990).

59 Agence Europe, February 23, 1991.

60 Agence Europe, October 26, 1991, and November 5, 1991.

61 Official Journal of the European Communities, no. C216/8 (1990).

62 CEC, Communication from the Commission to the European Parliament: Council Common Position on Procurement Procedures of Entities Operating in the Water, Energy, Transport and Telecommunications Sectors, SEC (91) 1609 final (Brussels: CEC, 1991); Agence Europe, September 26, 1991, and September 28, 1991.

63 Kellaway, Lucy, “A Definite Article of Dissent,” Financial Times, April 19, 1990, International Telecommunications Survey, p. 3.

64 CEC, “Guidelines on the Application of EEC Competition Rules in the Telecommunications Sector,” Official Journal of the European Communities, no. C 233 (September 6, 1991).

65 Grieco, , “Anarchy and the Limits of Cooperation: A Realist Critique of the Newest Liberal Institutionalism,” International Organization 42 (Summer 1), 485.

66 Moravscik, , “Negotiating the Single Act: National Interests and Conventional Statecraft in the European Community,” International Organization 45 (Winter 1991), 47.

67 Krasner (fn. 1).

* An earlier version of this paper was presented at the annual meeting of the American Political Science Association, San Francisco, August 30–September 2, 1990. I am grateful to the MacArthur Foundation, the Institute of International Studies, the Berkeley Roundtable on the International Economy, the Institut Français des Relations Internationales, and Scripps College for supporting this research.

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