Bandit Cable

Last month the Rio police, supported by marines in armoured cars and a cloud of TV cameras, stormed the Rocinha favela, unopposed by the drug traffickers. Behind the media theatre, the policy of reoccupation seems to be working. Police stations are followed by social services. Tourists and banks are venturing in. Shopkeepers don´t have to pay protection any more. The favela dwellers are delighted to be freed from the rule of mobsters, right?

Up to a point, Lord Copper. They now have to pay for their electricity instead of stealing it from the street lighting cables. Tough. They also – and here I have much more sympathy – have to pay a lot more for TV. As air reception is very poor on the steep hillsides, TV was supplied over an illegal cable network, the gatonet, controlled of course by the drug gangs. The going rate was 15-30 reais a month for up to 120 channels, including the free-to-air ones that carry telenovelas and football, and hacked paying film channels. I´m quite impressed by the bandits´ technical achievement here.

Favelistas are now being offered the service by legal providers for twice the price: 40 to 80 reais. The minimum wage in Brazil is 543 reais a month, and many favelistas will be living off less. 10 percent of their income just for TV!

The gatonet was provided by murderous outlaw kleptocrats, but their legal Brazilian counterparts are in this area even worse for the poor. My (non-poor) daughter in Lille pays 30 euros a month (72 reais) for 20-megabit ADSL (the slow offer!), 100 free TV channels and many others at a reasonable a la carte charge, and unlimited phone calls in France.

It´s not I think an accident that there are no low-power repeaters on Rio´s many hills to provide decent air TV reception, or that the municipality has not simply taken over the seizedgatonet and run it as a very profitable public service. There are TV satellites over Brazil, but owned by Globo and Sky (from which we buy a poor-value package). The selection of free-to-air channels is very thin. In Europe the TV satellites are owned by Astra, a Luxembourg corporation independent of the TV networks it carries, including Sky´s encrypted ones and FTA ones from the BBC, ITV, and Germany. There must be a profit opportunity in Rocinha for pirate satellite TV using hacked second-hand Sky receivers.

Brazil has the typical second-world problem of governance. It seems to lack a professional higher civil service; ministers are free to staff their fiefs with party cronies, which helps explain the high level of corruption and the serial scandals in Brasilia. In state capitals, it doesn´t even become a scandal. A technocracy can be a force for competition if it´s given a mandate. The European Commission is unideologically power-hungry, so it´s super-statist in agriculture (inheriting French policy) and strongly pro-competition in electricity and telecoms (inheriting German policy).

Lacking technocrats, it would still be possible for Brazil´s vigorous democracy to provide checks on monopolists. But the Brazilian left is typically soggy on competition. Partly it´s ideology; if you demonise all capitalists, you lose the ability to discriminate between useful and exploitative ones, and this continues when you make your peace with them. Partly it´s the organisational base: for the PT, the unions, representing a labour elite, many working for public and parastatal organisations. Monopolists can offer safe jobs with good wages. (A necessary but not a sufficient condition; see Amazon´s sweatshop warehouses.)

It´s possible for a right-wing party to be pro-competition, if it has a liberal ideology (in the European free-market sense) and a base representing small business, like Thatcher´s Conservatives or the German Free Democrats. If the losing conservative candidate in the last Brazilian general election, Jose Serra, had such a vision, he certainly didn´t articulate it.

Which brings me to the Republicans, another party of businessmen. GOP policies clearly only reflect the interests of big monopolistic corporations, not small ones. On credit card fees, the GOP backs the extortionate fees of the Visa and Mastercard duopoly (>2 percent per sale against 0.5 percent in Europe) against the interests of retailers, garage owners and Joe the Plumber. It opposed public works in a recession, a lifeline to small construction companies; and Obama´s moves towards universal health care, an obvious interest of every American employer. How many minutes a week does a Danish employer spend worrying about the health insurance of her employees, and how many staff does she pay to handle it? Zero.

Thomas Frank, in his famous What´s the matter with Kansas?, noted the ¨false consciousness¨ of Republican American workers who vote their cultural biases against their material interests. Does not the same apply to Republican small businessmen?

[Cross-posted at The Reality-Based Community]