1. Theme and Objectives

The general theme of this research is communications policy in Portugal and its links with the European Union (EU)1. It is the aim of this study to examine how domestic policies have developed in the telecommunications and broadcasting sectors particularly since Portugal joined the EU, in the mid-1980's, and to investigate the impact of the EU communications policy in this member state. In Portugal, like in most Western countries, there has been a swift intensification of political intervention in the communications arena. The national broadcasting market was opened up and two private TV channels were allowed to operate. The telecommunications sector was re-organised and the main telecommunications operator, Portugal Telecom (PT) was later partly privatised. These interventions required not only structural political changes but also the development of new regulatory frameworks.

Some of the changes which have taken place in the country over the last decade have been accelerated by EU policies, although they cannot be perceived as a mere consequence of the Portuguese integration into the EU. Well established national traditions and nationally-based actors played a crucial role in the definition and implementation of recent political decisions for communications. This study is mostly concerned with national politics and its impact on domestic communications but it recognises that national issues are not disassociated from international changes at both regional and global level. International telecommunications and broadcasting organisations and companies are expanding their activities beyond the boundaries of the state and it is increasingly difficult to effectively legislate on national communications.

EU binding and non-binding legislation, external political and economic pressure, and the diffusion of ideas such as deregulation and privatisation must be therefore taken into account when analysing Portuguese communications policy. Yet, this thesis tries to demonstrate that - in this case at least - international forces have an impact but are far from determining most crucial political decisions in the communications arena. The empirical research will illustrate that various domestic decisions justified on the grounds of 'international developments' can only be fully explained by short-term governmental objectives and by the very concrete interests of a small number of national actors.

Amongst all international actors directly and indirectly involved in communications, the EU is - by far - the most relevant for Portugal. Despite great difficulties in entering into the telecommunications and broadcasting sectors, the EU has steadily established itself as an important player. Yet, its ability to develop a legislative framework varies considerably from sector to sector. Telecommunications are perceived as crucial to European competitiveness and, naturally, national governments with important telecommunications industries were keen to see their national companies getting EU R&D financing and to be able to place their products in a wider European market without constraints. The rationale to intervene in broadcasting was also linked to economic competitiveness, but this was a much more sensitive area in political terms. Due to its intrinsic connection with national electoral politics and national culture and identity, governments were less prepared to see it being regulated by an external body.

At the present time - and despite the fact that the EU considers broadcasting as a telecommunications service - there are critical differences in the EU's ability to intervene in each sector. Mainly after the crucial 1987 Telecommunications Green Paper, the Commission managed to open up the terminal equipment market and rapidly moved to areas such as value-added services, satellite services and mobile communications. Additionally, the EU has financed expensive R&D programmes (e.g. ESPRIT and RACE) which were significant to the competitiveness of the core countries' industries. In the broadcasting sector, however, the only relevant EU achievement was the 1989 Television directive which prevents national governments from impeding broadcasts to be received in their own countries and asserts that television products can circulate within the EU like any other product or good. In any case, because broadcasting is a sensitive political issue, a minimalist approach was taken and member states can introduce their specific legislation/regulation within wide parameters.

The impact of EU policies in Portugal has been greater in telecommunications than in broadcasting. The most relevant elements of the EU telecommunications policy (e.g. the liberalisation of equipment, services and, now, infrastructure) have not been specifically designed to benefit Portugal or indeed any Less Favoured Region (LFR), but the country benefited in some ways from EU financial assistance. The expansion of the network was speeded up and various advanced services were introduced thanks to the Telematique and STAR programmes. In broadcasting, however, the relevance of the EU policies has been minimal. The EU broadcasting regulatory framework is so minimal that it cannot have any significance for the country. Furthermore, the EU audio-visual production programmes are poorly financed and the national broadcasting companies have not used them to finance domestic television production.

At national level, telecommunications and broadcasting ought to be seen as part of the overall political process and, in fact, the policies for both sectors reflect general aspects of the Portuguese decision-making process. In communications, as in other policy areas, there is a tradition of political and geographical centralisation, secretism and inability to effectively deal with the most pressing issues. Yet, despite some common characteristics in the way the state/government acts in both sectors, Portuguese telecommunications and broadcasting have historically been distinct issue areas, under different governmental departments, with different regulatory frameworks and agendas. Telecommunications has been mainly related to economic growth while broadcasting has been mostly understood as an effective tool of political control.

Portuguese telecommunications have been in private hands from the XIXth century up to the 1960's when Salazar decided to nationalise the three traditional operators. There were security issues at stake and the political dictatorship thought that it would be safer to bring telecommunications under the direct control of the government. After the 1974 revolution, the political instability was so acute that few changes were introduced until the mid-1980's. In any case, despite the economic significance of the sector, telecommunications have been perceived as a less sensitive issue than broadcasting. The general political objectives for the sector have been mainly related to the accessibility and quality of the services and overall economic development.

In clear contrast, since the very beginning, television broadcasting has been solidly under successive governments' direction. Not even the 1974 revolution brought in any structural change in the relationship between the medium and the political establishment. Albeit in different form, broadcasting has up to now remained totally dependent on political decision-making. The true governmental objectives for the sector were never openly disclosed. Since 1976, the country became a constitutional democracy and therefore all governments emphasised freedom of expression as a crucial policy objective. However, no government was prepared to concede to the public broadcaster, Rádiotelevisão Portuguesa (RTP), any real autonomy and editorial independence. The executive power believed that the control of RTP was an essential part of governance and the political output of the so-called public service was closely scrutinised by government's appointees within the company.

In the broadcasting sector, there has been an acute contradiction between expressed policy objectives concerning freedom of expression and the covert policy of control of information output. In the telecommunications sector, there have been undisclosed interests and contradictory political decisions but there has not existed a clear-cut contradiction between general policy objectives and actual political decisions.

Particularly since the late 1980's, under Cavaco Silva's leadership, both telecommunications and broadcasting sectors underwent fundamental reforms. The Social Democrat government, which has been in power for a decade, put telecommunications high on the agenda. Unparalleled national and EU financial resources have been channelled to the sector and important regulatory changes have been introduced. Digitalisation of exchanges and transmission has been done at an accelerated rate and value added services were steadily introduced. The three telecommunications operators were merged and 28% of the new PT went to private hands. The so-called PT lobby played a commanding role in the introduction of these reforms and a number of interests were totally neglected. The re-organisation of the sector and the privatisation of PT were presented to the public as 'inevitable' measures if the national telecommunications sector was to survive in the international market.

Television broadcasting was also high on the agenda and the opening up of the sector to private/commercial interests was also seen as inevitable. But, contrary to what has happened in the telecommunications sector, no public money (either from the national government or the EU) was injected into the sector. The economic implications of the introduction of competition in the television market were not adequately considered. The abolition of the license fee coupled with the beginning of the private channel broadcasts (1992/93) forced the companies to compete fiercely for a very small advertising cake of around £160m. Financially stretched to the limit, both 'public service' and commercial channels have poor quality programming and investment on national production (apart from news and sports) is all but ruled out. The opening up of the sector was not preceded by an informed debate about the implications of competitiveness on the overall programming output. Legislation was so crudely developed that the companies are exclusively competing for audience size rather than quality of programming.

Summing up, and in addition to the internal arguments of each chapter, this study tries to demonstrate that: i) although the EU is playing an increasingly important role in the communications arena, Portugal is still the crucial actor in terms of defining public policies for both broadcasting and telecommunications; ii) the general characteristics of the Portuguese policy making process are observable in the communications policy scene and iii) despite the technological convergence between telecommunications and broadcasting (and the associated political/legal difficulties), these sectors have developed quite differently and are still perceived as distinct policy areas.
 
 

2. Scope of the Study
 

This study analyses communications policy in Portugal which is the least researched EU member state. For the purposes of this research, we are solely concentrating on Continental Portugal, excluding the autonomous regions of Madeira and the Azores and the territories still legally under Portuguese administration such as Macau (to be handed back to China in 1999) and East-Timor, occupied by Indonesia since 1975. Macau and East-Timor are potential case studies in their own right and, despite legal considerations, we believe it to be inappropriate to bring them into the scope of this thesis. The autonomous regions of Madeira and the Azores are not considered, though we might occasionally refer to them, because these archipelagos have their own regional governments and assemblies. Furthermore, central government decisions are often interpreted and implemented in a very distinctive way.

Communications policy is a relatively recent area of study. The rationale for its development has so far been related to the pressing need for analysing efficiently and thoroughly the social and economic impact of technological developments and the subsequent increase in public policy-making for communications. Particularly since the early 1980's, the traditional European telecommunications and broadcasting structures started to be eroded and politicians put aside well established concerns with content and function and concentrated - temporarily at least - on matters of economy and structure. The re-regulation and privatisation processes carried out in most Western countries implied a considerable intensification of political intervention in communications. As an area of study, communications policy reflects the effort of the academic community to develop some analytic tools to examine the increasing complexity of public policies for communications.

In this thesis, when we refer to 'communications policy' in Portugal, we do not mean that there exists any comprehensive and co-ordinated policy for telecommunications and broadcasting. In this country, there has never been a communications policy, if understood as a coherent body of political decisions geared towards the development of a publicly debated and expressed vision of a communications system. So far, Portugal has had fragmented elements of policy for communications but technological convergence is already demonstrating that this is no longer sustainable. As Cuilenburg and Slaa point out, traditional policy boundaries are no longer sufficient to realise policy goals: 'Technological and economic convergence confront us with a necessity for policy convergence' (1993:171).

In fact, recent technological developments are threatening formal distinctions between telecommunications and broadcasting. Mainly due to broadband technologies, technological convergence is happening, thus making the two sectors very difficult to regulate separately. The technological convergence is the main justification for integrating broadcasting within telecommunications definitions. The International Telecommunications Union (ITU), uses a broad definition of telecommunications which is defined as 'Any process that enables a correspondent to pass to one or more given correspondents (telegraphy or telephony), or possible correspondents (broadcasting), information of any nature delivered in any usable form (written or printed matter, fixed or moving pictures, words, music, visible or audible signals, signals controlling the functioning of mechanisms, etc.) by means of any electromagnetic system (electrical transmission by wire, radio transmission, optical transmission, etc. or a combination of such systems)' (ITU/CCITT/Blue Book, Volume VI, Fascicle VI 6, Recommendation Q9). Similarly, the EU Commission also defines broadcasting as a tele-service, which means, a service that can be provided by a telephone network.

The Portuguese law however implies that a distinction should still be made. According to the Basic Telecommunications Law (88/89, article 1), telecommunications are understood as the transmission, reception or sending of signals, representing symbols, writing, images, sounds or information of any nature using wires, radio electrical means, optical or other electromagnetic systems. This general characterisation of telecommunications would inevitably include broadcasting but another aspect of the same law suggests that a distinction should be considered. Article 2 states that telecommunications for public use are considered to be public telecommunications requiring an address procedure whilst broadcasting or telediffusion are public telecommunications in which the communication is unidirectional, to several reception sites simultaneously without prior addressing. Furthermore, the Basic Television Law (58/90, article 1) defines television as the transmission or re-transmission of moving images and sounds adressed to the general public.

In any case, broadcasting and telecommunications have the technological potential to come together into one electronic distribution system. On digital networks it is irrelevant to distinguish between transmission of images, voice, data or text. So, telecommunications organisations are considering entering the market for two-way video transmission (e.g. video conferencing, video telephony) as a way of exploiting the full capacity of the new generation of broadband fibre-based networks. For their part, cable TV companies are looking to provide higher value services - such as home shopping, electronic information services, pay per view - as a way of gaining new revenue sources from their existing subscriber base (OECD, 1993:87).

In technological terms, broadcasting is rightly perceived as an integrated part of telecommunications. However, broadcasting and telecommunications have a distinctive history and they have performed differentiated political tasks. Although recognising the technological convergence, telecommunications and broadcasting are still particular political fields and there is therefore a case to analyse them as distinct sectors. Because of the political emphasis of this study, we will refer to television broadcasting as terrestrial, cable and satellite television, and to telecommunications as a system which comprises the network infrastructure, i.e., the set of nodes, connections and equipment permitting the interconnection between two or more points (switching or processing nodes, layouts, radio electrical control centres, cables, satellites, microwave links, etc.), basic and value-added services (telephony, telex and broadband data, packet-switched data, electronic mail, videoconference, mobile telephony, among many others).

Within the boundaries (however loose) of communications policy, inter-related communications issues such as the press, radio, computing2, amongst others, could still be covered. There are relevant policy issues involved but - although we might occasionally refer to them - these are not within the scope of our study per se. We are concentrating on broadcasting and telecommunications because both at EU and national levels, these technologies were perceived as public goods 3 and therefore governments had a rationale to exercise weighty control over them. These have also traditionally been the most politically sensitive areas in the overall communications scene as telecommunications has been linked to national security and the military whilst broadcasting has been related to political control and the defence of national identities. Additionally, these are the two most challenging sectors in terms of political intervention in the near future.
 
 

3. An Outline of the Chapters
 

I n the next chapter, we will try to formulate a body of theory which can be used to model the research. We will start by examining Portuguese communications and respective policies in the international context. International Relations (IR) theories will be used to analyse different levels of interdependence/dependence of both the telecommunications and broadcasting sectors. Although the so-called inter-paradigmatic debate gives us some useful insights, we will also apply integration theories particularly to further our understanding of the differences between national telecommunications and broadcasting in their relation with the European Union. Yet, in spite of the visible international links of Portuguese communications, this study will take a neo-realist approach in the sense that it will recognise the increasing level of interdependencies whilst arguing that the nation-states are still the crucial actors. The Portuguese case shows that the most relevant decisions in the communications field are still being taken at a national level. Cross border capital and ideas are being used according to the interests of the most powerful domestic actors.

Thus, if we want to analyse the Portuguese Communications Policy, we must - first and foremost - concentrate on the national level of analysis, attempting to understand the state/government in its complexity. In order to open up the 'black box', we will adopt an approach which draws on the strengths of several theories of the state. Elitism and its considerations concerning the concentration of power will prove to be particularly relevant, but bodies of literature dealing mainly with interest groups and interest intermediation (e.g. pluralism and corporatism) will also provide important elements to the discussion. More recent writings on policy networks emphasise the need to fragment even further the analysis of the state/government and might be seen as a critique of the clear limitations of the 'traditional' theories of the state. Summing up, this chapter attempts to deepen the understanding of the empirical research to be presented in the subsequent chapters whilst seeking to demonstrate that - despite numerous shortcomings - international relations perspectives and theories of the state can be advantageously used to explain political developments in Portuguese communications.

Chapter III examines Portugal in the international context. Although several international actors will be considered, our focus will be on the European Community/European Union. Since Portugal joined this organisation in 1986, the EEC became the most important public international actor for this country. Differently from the EU, most international bodies dealing with communications issues are mere policy co-ordinators and their policy orientations are not binding. Indeed, the EU has been steadily increasing the level of activity in the fields of telecommunications and broadcasting, and part of its legislative output is binding upon its member states. By comparison to other international organisations, the EU is an important communications actor and domestic communications policy cannot be fully understood without assessing this regional entity.

Still, this chapter argues that the rationale behind the Commission's intervention in both telecommunications and broadcasting has little to do with the specific needs of Less Favoured Regions (LFR's) such as Portugal. The EU communications policies were developed to support the European industries in their fight against US and Japanese competition and to enable them to compete on a world-wide basis. The poorly financed STAR and Telematique programmes were the only visible trade-offs obtained by Portugal for opening its telecommunications market. In the broadcasting sector, the abolition of restrictions to the free circulation of broadcasting products was not matched by any financial gain. Programmes like Media 92 and Media 95 had no impact in the national broadcasting industry.

In the fourth chapter we will move to the national level of analysis. We will investigate some aspects of recent political history which are most likely to have an impact on current communications policy. Communications policy is inherently linked to the overall policy process and any a-historical examination is bound to be faltering. Our analysis will go no further back than the political dictatorship (1926-1974). The main political and social features of the long-standing Salazarist regime are - despite the apparent repudiation which followed the 1974 revolution - still tangible. Political and civil liberties were restored (or put forward for the first time) but the administrative system, the judiciary, the police, the military and the Catholic church remained largely unreformed. Ten years of acute political instability followed by another decade of absolute majority rule have not favoured the introduction of substantive changes in the nature and functioning of the Portuguese state.

Over the last ten years, political power remained largely concentrated in the hands of the prime minister and a few senior politicians, mainly personal friends of his. In practical terms and similarly to what has happened during the dictatorship, the government fulfilled both the executive and the legislative power, with Parliament being little else than a mere talking arena. The elitism and/or 'limited' pluralism still observable in the actual Portuguese state has clear implications in the way policies are developed in the communications arena. Communications policies are indeed highly centralised, they reflect a continual lack of expertise by government officials and they indicate that in yet another policy area the government is secretive and largely unaccountable to its citizens.

In Chapter V, the evolution of communications policy in the country will be examined. This section tries to illustrate that despite the technological convergence and some common political attributes, telecommunications and broadcasting sectors have developed quite differently and have been perceived, up to now, as very distinctive policy areas. Historically, they have used different technologies, they had distinctive social significance and - crucially - they have been used by national politicians and interest groups for very particular purposes.

The telecommunications sector, has historically been related to economic development, though Salazar has also used the international telecommunications operator, Marconi, specifically to 'unite' the scattered parts of the Portuguese overseas empire. Because it was far more sensitive, television broadcasting has always been firmly under successive governments' control. Since the setting up of television in Portugal, in the mid 1950's, until the break up of the public service (RTP) monopoly in the early 1990's, no structural change took place in the relationship between the medium and the political establishment. RTP has served the interests of the political dictatorship and it has served the interests of all governments ever since. The political output (at least) has always been directly and/or indirectly under the control of the executive power.

Chapter VI presents an analysis of the national telecommunications sector since the accession of Portugal into the EEC. This chapter argues that the examination of Portuguese telecommunications requires an assessment of both domestic and EU policies. We will start by considering how Portugal has incorporated the EU legislation and we will also examine the relevance of the EU telecommunications programmes in the country. Indeed, a number of reforms were introduced because the country had to comply with the EU regulatory framework but crucial aspects of the 'telecommunications reform', such as the re-organisation of the sector and the partial privatisation of Portugal Telecom, have no direct relation with the EU policies.

Although apparently Portugal is merely following the liberalisation/privatisation bandwagon, recent changes in the telecommunications sector reflect also very concrete domestic interests. The three traditional telecommunications operators were merged into Portugal Telecom because the CTT/TP lobby was more influential than the Marconi lobby, for example, which fiercely fought the merger. Likewise, the partial privatisation of PT has taken place because capital was urgently needed. The public companies' pension funds had been used to finance the expansion of the network and the development of advanced services. The partial privatisation was perceived as the easiest way of generating cash to cover those funds. Moreover, the Treasury was also expecting to generate extra-funds. This chapter shows that, although the EU policies have been quite relevant, crucial aspects of the recent telecommunications reform were designed and implemented by the national government, induced by a small number of nationally-based actors.

In Chapter VII, the domestic broadcasting sector will be critically assessed. Differently from telecommunications, broadcasting policies have been quite independent from external political pressures or EU binding legislation. The EU faced great difficulties entering this domain and, so far, it has solely developed a vague and generalist framework which has no actual impact on the Portuguese broadcasting sector. In fact, broadcasting has been firmly under successive government's control and the main policies (though covert) have been related to the control of political output. This tradition of political subservience gave RTP such a poor reputation that the break up of its monopoly was understood as the only alternative. However, despite the rhetoric, no government was truly interested in losing its monopoly of power over television.

In the early 1990's, after his third legislative victory, the prime minister Cavaco Silva decided that two national TV channels should be granted: one to the Catholic Church and another one to a founding member of the Social Democrat Party and former prime minister, Pinto Balsemão. Though this represented an enormous structural change (indeed the first since RTP was set up), all political concerns and public debate was concentrated on who should get the new channels (even if the prime minister decided himself on the issue). The relevant issues associated with the introduction of competition in the sector were severely neglected. Specific legislation dealing with forms of financing, balanced/quality programming and national production was simply not developed. Therefore, four channels had to compete for limited advertising revenues and are now financially stretched to the limit. National peak time television has little more to offer than cheap fiction (mainly Brazilian soap operas and US movies) and populist programmes based on foreign formats (e.g. 'reality' shows and quiz shows). The recent introduction of Cable TV in some urban areas will fragment audiences even further and re-enforce existing trends.

Chapter VIII is the general conclusion of the thesis. In this section we will sum up the main general arguments of the study and we will relate the theoretical perspectives developed in Chapter II to the empirical evidence provided in the subsequent chapters.
 
 

Footnotes:

2. Within the telecommunications sector there is increasingly more intelligence in the network mainly due to the integration of computer technology and software. So, when we refer to telecommunications (infrastructure and services) it is assumed that the network incorporates ever more sophisticated micro-computers and software.

3. The concepts of 'public good' and/or 'public service' are developed in chapters VI and VII.