By David Sugar
Latin America's free software revolution challenges U.S. corporate domination
In 2002, then-U.S. ambassador to Peru John Hilton delivered a threatening letter to the Peruvian congress on behalf of a powerful American special interest. The letter stated that the Microsoft Corporation and its chairman Bill Gates disapproved of Peruvian politicians debating a proposed law, Special Bill 1609, which favored the use of free software in its government ministries. Hilton warned its passage would harm U.S.-Peru relations. The bill was quietly dropped after then-Peruvian president Alejandro Toledo was invited by Microsoft chairman Bill Gates to personally receive a donation for a Toledo controlled Peruvian foundation.
This incident was an early salvo in a brewing international conflict. As developing nations around the world increasingly turn to free software to cut costs and promote local development, powerful North American commercial interests have responded by outright bullying. Sometimes they have done so by proxy, using public servants like Ambassador Hilton. Other times they have threatened legal action to intimidate outspoken critics such as the president of Brazil’s National Institute of Information Technology, Sergio Amadeu da Silviera, who compared Microsoft’s business practices to that of drug dealers. Sometimes they have threatened governments directly, such as last November (2004), when Microsoft CEO Steve Ballmer threatened to sue Asian governments who choose to use free software.
Free as in freedom
The term “free software” refers to a burgeoning social movement which promotes the right of users to run, copy, distribute, study, change and improve software without restriction. The software itself may cost money to purchase, but the user is then “free” to modify and distribute it. Free software is often confused with the related “open source” software movement, which uses free software methods for writing software, but is not as directly concerned with users’ rights. Both free and open source commercial software use commercial software licensing to grant rights to others. By contrast proprietary commercial software often uses software licensing as a means to explicitly deny users the right or ability to modify software to fit their needs or access their own data, the right to speak about the functionality of the software they purchased, or to resell it to others when they no longer wish to use it.
While both free and proprietary forms of commercial software have co-existed in the past, what has made certain private North American commercial interests respond directly in Latin America is that many nations there have chosen to promote the use of free software in public administration. There already is a long history for the support and use of free software in Brazil by the Workers Party, starting from the days when they controlled the state government of Rio Grande do Sul and instituted private/public sector partnerships through projects such as procergs. Most recently the government of President Luiz Lula Da Silva has chosen to use free software solutions built around GNU/Linux exclusively in a project to make computers available to the poor, as recommended by MIT last month (2005).
Free software in public administration is not only about software for special government programs such as digital inclusion for the poor. This is a battle about the purchase and use of all software by national governments and the terms such software will be provided under. This is about the procurement of servers and database applications used to house government data. This is also about the software that will be purchased and used on the desktops of government office workers every day, and whether they will continue to purchase and use Microsoft Windows and Microsoft Office under the terms of a monopoly supplier, or free software alternatives such as GNU/Linux and OpenOffice.
The free software advantage
One reason that free software is being promoted by Latin American governments is initial cost. Brazil alone expects to save over $1 billion annually through the use of free software and elimination of costly license fees. Many other Latin American governments are also keenly aware of the cost benefits of free software. Peru and Argentina have tried passing special procurement laws to increase the adoption of free software in government. In Venezuela, the use of free software in public administration is now supported directly by President Hugo Chavez.
While it is true that the total cost of using software is not represented in the purchase price or license fees alone, free software offers the potential for significant long term cost savings for other reasons as well. Commercial free software will often work using older hardware rather than requiring new hardware to be purchased. And since proprietary commercial software publishers depend on the number of licenses they can sell, proprietary software publishers desire to make it necessary to sell as many licenses as possible for performing a given workload. It should therefore come as no surprise that the same workload that can be done, for example, with fewer systems running free software solutions, than may often be required with proprietary commercial solutions.
Free software also can result in lower costs through the absence of monopolies. One cannot have a monopoly in free software since there can always be another free software publisher that can supply the same goods at a lower cost. This is one of the main reasons why governments prefer using free software instead of proprietary commercial software: When money is spent on proprietary software, only a small proportion of that money goes towards funding useful services and software development, as a large part ends up as monopoly rent to the shareholders of the proprietary software company. In the world of free software, there are no monopolies, so money that is spent on free software is good for creating jobs and other local economic benefits. In Latin America money spent on proprietary commercial software serves mainly to make already-rich foreign software publishers even richer.
In trying to create a market for free software, many Latin American countries have used procurement laws, which determine how a government purchases goods and services. Government procurement is often done through the use of competitive bidding, whereby multiple suppliers can offer alternate and compatible products from multiple suppliers, and the government is then able to choose the best product at the lowest cost. Propriety commercial software, by its very definition and through the rights it takes away from users, is software which can only come from a single supplier.
Free software also provides oportunities for Latin American citizens to produce and directly participate in the worldwide commercial software market, rather than depending exclusivily on foreign suppliers. In doing so, free software offers incentives for forming a local software industry that can then compete on an equal basis with that of any other advanced country in the world. Commercial software development does not require expensive plants or high capital investment to develop, nor does it destroy the environment.
Commercial software development may only require people who are free to use their skills and natural talents. Certainly, the nations of Latin America can and do produce people with such talents and skills. Free software means these people can practice these skills for their own benefit and the benefit of their society as a whole without having to look for work in or migrate to foreign lands. By choosing to procure free software, the national government can directly encourage this.
If Latin American countries choose to create an economic environment that accepts participation by free software, existing corporations do not have to be excluded. Companies like Microsoft could choose, for example, to change the way they license their existing products. They are also free to adapt and offer services based on existing free software already in the marketplace. Instead of competing in these new markets, some companies have responded by trying to make it impossible for Latin American governments to choose and use free software at all.
The new banana wars
North American corporations have relied on the World Information Property Organization (WIPO) and the World Trade Organization (WTO) to promote treaties which favor corporate exploitation. The WIPO is often used to promote treaties and laws which export both pharmaceutical and software patenting to developing nations. Private corporations then using these same treaties to enforce existing North American patent monopolies, preventing the development of competitive local industry. In addition, the “Free Trade Area of The Americas” (FTAA) treaty contains an IP rights chapter which similarly benefits North American software giants.
One way Latin American countries have responded to WIPO, and other patent bearing treaties, has been to band together with other nations to promote a specific development agenda as ratified last October (2004) by the WIPO general assembly. Yet powerful American and European commercial interests have chosen to use the WIPO chair to explicitly bar NGO’s representing the interests of developing nations from attending or participating in WIPO discussions on this development agenda, even those organizations already duly certified and recognized with observer status.
