15 August 2016

Once Again, We See Cooperation Working Better than Capitalism

A rural cooperative in Mexico has gotten a permanent license, andit has delivered a service an order of magnitude cheaper than the private politically connected crony capitalists running most of Mexico's cell phone services:
Until this month, Celia Pérez could only afford a brief weekly call to her husband, Rubén Martínez, who left left their remote rural community in Mexico two years ago to find a job in the United States.

Pérez, 25, was pregnant with their third child when Martínez headed north; he made it to New Jersey and regularly wires home money from his construction job, but the long separation and infrequent calls have been tough on everyone.

Now, a legal triumph by indigenous activists has cracked the monopoly enjoyed by Mexico’s powerful telephone magnates – including the world’s richest man, Carlos Slim – and opened the door to new services which will slash the cost of communication.

Indigenous Communities Telecommunications (TIC) last month won a long battle with the government to become the world’s first not-for-profit group to be granted a mobile phone concession.


A handful of public phone booths are hosted in the village’s few shops. Until recently, Pérez paid 15 pesos ($0.80) a minute to call her husband. Once a month, she would travel two hours to Tlaxiaco – the nearest town with mobile phone signal and 3G internet – to send him photos of their young children.


An experimental concession was awarded in May 2014, allowing affordable, community-owned telephone services to be installed in 16 communities in Oaxaca over the next two years.

In July 2016, TIC – which works alongside Rhizomatica - was granted the first-ever permanent licence.


Nuyoó is the first community to benefit from the July victory.

In all, it cost 180,000 pesos ($10,000) for the equipment and installation – a third of what one multinational provider wanted to charge.

Subscription is free, but each registered user must pay 40 pesos a month – 15 goes to TIC to cover overheads and serious repairs – and the rest stays in the community to cover the upfront running costs.

Calls within the network – which includes 17 communities so far – are free. International and national calls are cheap: one peso will buy five minutes to US.
My bad. It's not an order of magnitude. It's a factor of 75, so it's 7½ times more than an order of magnitude.

Carlos Slim is the richest man in the world because he can charge 75 times the actual cost, and he has the concession because he is politically connected.

When people talk about the virtues of capitalism, they ignore this sort of corrupt reality .


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