By John Otis/CPJ Andes Consultant
The concept of network neutrality holds that all Internet traffic should be treated equal and that Internet Service Providers, or ISPs, should serve as free-flowing gateways for information rather than as filters. But in politically polarized Venezuela, neutrality is an increasingly rare commodity and now ISPs are feeling the heat.
The socialist government of President Nicolas Maduro is forcing ISPs to act as Internet policemen. Through currency controls, the Maduro administration is also restricting their access to dollars, which ISPs require to upgrade services and keep abreast of technological changes. ISPs are not even allowed to raise their monthly fees to keep up with galloping inflation.
“Venezuela is no Disneyland,” one frustrated ISP executive told CPJ.
ISPs have come under increased scrutiny as Venezuela’s economy has gone into a tailspin. Amid skyrocketing inflation, shortages, and other economic woes, the U.S dollar now trades on the black market for 10 times the official rate of 6.3 bolivars per dollar. Many people track this parallel market via Web sites such as www.dolartoday.com, which is based in Miami.
But President Maduro claims currency speculation is part of an “economic war” being waged against his government. Last month, the telecommunications regulator CONATEL began ordering ISPs to block Web sites that provide the black market exchange rate. So far, ISPs have restricted access to more than 100 URLs.
The order was based on Venezuela’s 2004 media law which makes it illegal to disseminate information that could sow panic among the general public. ISPs must comply within 24 hours or face sanctions, which could include the loss of their concessions.
“Of course we don’t like it,” said the ISP executive. “But for me to defy this would mean to lose the company.”
The government claims publishing the black market exchange rate encourages shopkeepers to raise prices. That undermines government efforts to rein in inflation, which at 54 percent annually is one of the highest rates in the world. But media analysts are alarmed.
Amid government pressure, self-censorship, and the sales of traditional Venezuelan media companies - like Globovision and Cadena Capriles - to owners friendly towards the government, many newspapers, TV, and radio stations no longer provide in-depth coverage of state entities and officials. Social media, blogs and other Internet sites are now the go-to places for critical news about the government, according to Carlos Correa, who directs Espacio Publico, a Caracas NGO that focuses on free speech issues.
Correa and others fear that cutting off access to exchange-rate Web sites is the first step towards a broader blockade of information that reflects badly on the Maduro administration.
“Right now it is dolartoday.com but tomorrow it could be a Website that reports on government corruption,” William Peña, editor of the Caracas newsletter Inside Telecom, told CPJ. “This is a very grave matter. It violates the principle of Internet freedom and the legacy of neutrality.”
Under pressure from CONATEL, the Venezuela version of www.tucarro.com, which allows people to buy and sell used cars, deleted automobile prices which had been listed in bolivars indexed to the black market exchange rate.
Pedro Maldonado, the director general of CONATEL, strongly defended the government’s action.
“The people who operate these Web sites are political actors who are linked to the opposition and who are trying to create grave economic distortions,” Maldonado told reporters last month.
Yet the blockade is full of holes. Dolartoday.com and other sites often change their IP addresses by adding a dot or a dash and then inform the public via Twitter. In response, Maldonado, on Nov. 19, sent a letter to Twitter asking the San Francisco, Calif.-based company to block such information. Twitter ignored the request.
Another target has been Bitly, the popular site for shortening URL addresses to make it easier to send them as links via social media. CANTV, the government-run ISP, which dominates the market for residential Internet users, has blocked the site though it is available on other Venezuelan ISPs.
Another Caracas ISP executive said CONATEL’S strategy is to wear down Internet users so they eventually give up looking for information the government deems subversive.
Besides serving as part-time censors, Venezuelan ISPs are being squeezed in other ways. For example, access to dollars at the official exchange rate is strictly controlled by the government. Dollar allowances for ISPs keep shrinking which makes it harder to import materials and technology to upgrade services. Such restrictions often force importers to purchase far more expensive dollars on the black market in order to make overseas purchases.
According to Venezuela’s Chamber of Telecommunications Service Companies, its affiliates received just $28 million at the official exchange rate this year, down from $377 million in 2012.
During that same period, the official government dollar allowance for affiliates of CANAEMTE, an industry group for Venezuelan firms that build telecom infrastructure, fell from $46 million to $6 million.
Meanwhile, the government has allowed ISPs to make only miniscule increases to their monthly fees despite soaring inflation. All this means Venezuela has one of the slowest Internet download speeds in the world. But given the government’s growing paranoia over information available on the Internet, that may not change anytime soon.
The Caracas ISP executive said his company has decided that it’s better to play by the government’s rules in order to continue providing Internet service. But, he added: “They really have the noose around our necks.”
John Otis, CPJ's Andes correspondent for the Americas program, works as a correspondent for Time magazine and the Global Post. He authored the 2010 book Law of the Jungle, about U.S. military contractors kidnapped by Colombian rebels, and is based in Bogotá, Colombia.
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