Historical Evolution of Telecommunications in Brazil

Historical Evolution of Telecommunications in Brazil Marcelo S. Alencar, Ph.D. Senior Member, IEEE ´ Departamento de Engenharia Eletrica Universidade Federal de Campina Grande

IEEE Foundation, 2003

This work is dedicated to the memory of my beloved mother, who survives in my chromossomes and dreams.

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Prologue The aim of this work is to present some of the facts that marked the history of telecommunications n Brazil, since its inception in 1808. The idea is to focus on the performance of the sector throughout the years, regarding telephony, telegraphy and broadcasting. The research covers the first years of the Empire, the problems at the beginning of the Republic, the private owned stage, the military regime, which established the state owned companies, and the privatization process. The author acknowledges the support provided by the IEEE Foundation, through Grant 2002-076, which made this work possible. The author also thanks Waslon Terllizzie Araújo Lopes, who helped with the research and typing of the manuscript, Thiago Tavares de Alencar, who helped a lot in the translation, typing and revising process, Marcus André Matos, who was in charge of the translation and Walter Luiz Oliveira do Vale, who helped typing selected parts of the text. Finally, the author acknowledges the support of the Department of Electrical Engineering, UFCG, and Atecel.

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Contents 1

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Highlights of the History of Telecommunications in Brazil – The Empire Age

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The Forgotten Hero – What Father Landell de Moura Used to Do in His Spare Time

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Telegraphy Survives the Republic – Marshall Rondon Takes the Telegraph to the Inlands of the Country 19

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The State Age and the Autonomous Development Project during the Military Regime 33

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Privatization and the Current State of the Market – Liberalism is Back 53

A The Repercussion of Father Landell de Moura’s Inventions

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B Patents Awarded to Father Landell de Moura in the United States

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CONTENTS

Chapter 1 Highlights of the History of Telecommunications in Brazil – The Empire Age This chapter aims to present some of the facts that defined the history of telecommunications in Brazil in its first century. With a special focus on the data of achievements in this field throughout the years, in regard to telephony, telegraphy and broadcasting, this research comprises a period of time that ranges from the first steps of telecommunications in this country still at the Empire Age, moving on through the hectic first days of the Republic, all the way to the decline of the private concessions model, on the brink of the establishment of the Military Regime.

1.1

Communications at the Empire Age

The history of communications in Brazil started at the arrival of the Royal Family on January 22, 1808. The effects of the war in Europe probably influenced D. João VI’s decision to install the first semaphores in the country, in Rio de Janeiro. These optical telegraphs interconnected Morro da Babilônia, Morro do Castello, Villegagnon and the Fortress of Santa Cruz (Pachajoa-Burbano, 1991). The Brazilian population at that time topped 3 million inhabitants, of which 2 million consisted of slaves. Rio de Janeiro had 100,000 inhabitants, whereas the other two major cities in the country, Recife and Salvador, had around 70,000 inhabitants each. São Paulo was on average as big as Ouro Preto or São Lu´ıs, with

approximately 20,000 people (Henshall and Jr., 1974). The setting up of postal services in Brazil dates back to 1829. In 1843, just over two years after D. Pedro II had started ruling the country, the first Brazilian postal stamp was launched. It was known as ”The Bull’s Eye”. Brazil was the third country in the world to make use of postal stamps. The first telegraphic lines in the country date from 1852, a few years after the introduction of the telegraph in the United States by Samuel Morse. The installation of those lines were the result of the efforts made by Eusébio de Queirós Coutinho Mattoso Câmara, the Minister of Justice at that time, who counted on the assistance of an up-and-coming, dedicated Physics professor from the Escola Central, Dr. Guilherme Schüch de Capanema (Alencar, 2001c). The Brazilian population reaches 8 million inhabitants, of which 2.5 million were slaves (Henshall and Jr., 1974). In 1855, during the administration of the Baron of Capanema as Director General of the Brazilian Telegraphs, 20,000 km of telegraphic lines were built. The first long distance line was activated in 1856, connecting Rio de Janeiro to Porto Alegre, via Curitiba (Alencar and Alencar, 1998). Before that, only the optical telegraphs were known, used almost exclusively in maritime services, in Rio de Janeiro and in a few other provinces. The first attempts on the electric telegraphs were restricted to the capital of the Empire, where the first underground telegraphic line was inaugurated, connecting the Quinta Imperial de São Cristóvão to the Campo de Sant’Anna Headquarter, on May 11, 1852. Additional lines were installed later, to interconnect offices in the public sector (Fitzgibbon, 1974). On March 17, 1855, Dr. Capanema was appointed Director General of the Brazilian Electric Telegraphs, with an annual salary of 1,200$ réis, besides a few other fringe benefits that were inherent in the job. On the same date provisional instructions were issued for the execution of the service. These instructions demanded that immediate action be taken to carry out the act of January 17 of the previous year, which had determined the extension of the existing small network (“Fundaça˜ o Instituto Brasileiro de Geografia e Estat´ıstica”, 1986). The first by-law issued for the Department of Electric Telegraphs was the decree No. 2,614 of July 1860. By legislative decree of the 28th of that month, that service was transferred from the Ministry of Justice to the Ministry of Agriculture, Commerce and Public Works. This by-law created some job openings already required by the development of the service, upgrading the director’s annual salary to 1,800$ réis. The lines were franchised to the public under the payment of an established fee. With the decree No. 3,288 of July 20, 1864, a new by-law to 2

CHAPTER 1. HIGHLIGHTS OF THE HISTORY OF TELECOMMUNICATIONS IN BRAZIL – THE EMPIRE AGE

incorporate the optical telegraphs the Department was issued. One of the first military applications of the telegraph, for tactic purposes, took place during the war between Brazil and Paraguay, from 1864 to 1869. With the support of Germany, which, like England, had commercial interest in the dispute, General Solano Lopez managed to guide the movements of his troops from his camping site. This gave Paraguay a certain initial competitive advantage, partly owing to the work of the Director of the Telegraphs, Herr von Fischer Treuenfeld, appointed by Lopez (Beauchamp,2001). As the services developed, new reforms were introduced. As of 1864, by-laws for the Department had been issued. The first by-law established the following posts: one director general plus one assistant, one employee in charge of the lines, one office assistant, one caretaker in charge of the batteries, one employee in charge of billing collection, thirteen station staffs plus thirteen assistants, and two postmen. The by-law also created a class on telegraphy, a workshop for repairing faulty equipment, and opened positions for engineers and security guards for the lines. The by-law of 1870 created new posts: one vice-director, one secretary, one accountant, one project designer, one scribe, a number of line inspectors and station managers. Then came the service manager and chief telegraphers. With the by-law of 1881, the position of chief accountant was opened, but it was soon terminated. Other posts created by the same by-law were a cashier, a doorman, the manager and the assistant of the technical archive, and the administrators. In 1890 the Technical Department was created. By 1861 the Department had gathered a team of 34 employees. Twenty years later, the lines and the stations alone had a staff of 1,081 employees: three maintenance staffs, 6 engineers, 56 inspectors, 40 administrators, 677 guards and workers, 3 station managers, 182 station staffs plus 81 male assistants, 6 female assistants and 27 fiscal inspectors. Until 1855, the telegraphic network had not gone beyond the limits of Rio de Janeiro. The construction of the first line, which connected the Quinta Imperial to the Headquarter, was followed by the building of others whose function was to provide a communication link between public sectors. Only in August 1864 was the Central Station inaugurated. The construction of a line to Petrópolis was initiated in 1855, but the telegraphic station was inaugurated in January 1857. After that, the network began expanding northbound. With the declaration of war against Paraguay there were changes to the guidelines. Attention was turned exclusively to the south again and the line connecting Rio de Janeiro to the province of Rio Grande do Sul was built 1.1. COMMUNICATIONS AT THE EMPIRE AGE

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in only six months. This line went through Santos, Paranaguá, São Francisco, Itaja´ı, Desterro, Laguna, Porto Alegre, Pelotas, Rio Grande and a few other less important coastal locations (Lawrence F. Hill, Editor, 1947). Due to the high speed with which the construction was done, many defects occurred. However, these were gradually and successfully dealt with afterwards (Alencar, 2001d). In the late 1860’s, there was a telegraphic line that extended to the south of the country. In 1873, the line Recife-Maceió was inaugurated. In 1874, Rio de Janeiro was connected to Bahia by a new line. At that time, Brazil had a population of approximately 10 million inhabitants, of which one and a half million were slaves. The purchasing power of the population was still extremely low (Henshall and Jr.,1974). Fortaleza was connected to Rio via Bahia in 1881. The telegraphic line reached the Amazon in 1886 (Lawrence F. Hill, Editor, 1947). The services were initiated in different sectors, which resulted in interruptions. Maceió and Recife had had their telegraphic communications since April 1873. In 1875, the line reached the city of Para´ıba do Norte (João Pessoa). In February 1881, the general communication system up to Fortaleza was inaugurated. On December 14, 1884, the line extended to Teresina and São Lu´ıs, with several intermediate stations. On October 13, 1886, station Belém do Pará was inaugurated (“Fundaça˜ o Instituto Brasileiro de Geografia e Estat´ıstica”, 1986). The famous Lord Kelvin (1824-1907), whose real name was William Thompson, visited Belém do Pará between September 5 and 7, 1873. The Irish engineer was in Brazil accompanying his English colleague Fleeming Jenkin (1833-1885) so as to supervise the installation of a submarine telegraphic cable connecting Belém-Recife-Europe. The work was done by the Western and Brazilian Telegraphic Company (WBTC) (José Maria Filardo Bassalo, 2002). According to the newspaper ”O Liberal do Pará”, Lord Kelvin and Fleeming Jenkin were in Pará to carry out the supervision of the connection, which was inaugurated on September 5, 1873. By 11:00 a.m. that very day the work had been finished. Follow up to that event there was an exchange of telegrams between the presidents of the provinces of Pará and Pernambuco. Finally, the newsroom of that newspaper, on behalf of the Pará Liberal Party Central Committee, saluted the Pernambuco Liberal Party Board of Directors. At 11:30 a.m., a sumptuous lunch, which ended at 2:00 p.m., was offered to the guests of Sir William Thompson and Jenkin. According to the English tradition, the first toast was offered to his majesty Emperor D. Pedro II. The salutation was followed by the National Anthem, performed by the 11th Infantry Battalion Band and the Apprentice Marines’ Band. 4


A second toast, a homage to Her Majesty Queen Victoria, was proposed by the president of the Province of Grão-Pará, Domingos José da Cunha Júnior. On this occasion, the music heard was the English National Anthem, performed by the Philharmonic Society, invited by the WBTC to executed various pieces of their own repertoire during the event. When the performances were over, the people who gathered around were invited to see how the newly inaugurated telegraphic equipment worked. To close the festivities, at 6 p.m., a solemn Te Deum was celebrated at the Cathedral, which was attended by authorities and a large number of citizens. Over that period of time, advancements had been made to the southern line. Curitiba was connected to the main network on October 30, 1871, through an extension that originated from Morretes. In October 1872, the Jaguarão Station was inaugurated. Later on, communications with the Uruguayan lines were established through this station due to the closing of a deal between the Brazilian minister and Santiago Bottini, entrepreneur from a telegraphic line from the Eastern Republic (Uruguay), who, by decree, had obtain a ten-year concession to extend the line to the proximities of the Brazilian line in Jaguarão. The city of Santos, whose station was inaugurated on September 26, 1873, was connected to São Paulo by an extension. The campaign line was built in Rio Grande do Sul. That line extended to Uruguaiana, whose station was inaugurated in August 1874. Telegraphic communication between Brazil and Argentina began through that line on February 2, 1883. In 1884 the line to Minas Gerais was built with the opening of the Ouro Preto Station, followed by the Diamantina Station the next year, with a few intermediate posts. The government lines were 6,942 km long in 1880 and 10,633 km long in 1887. The sum-total of telegraphic stations was 171 in 1887, with 528,000 telegraphic dispatches. However, the revenue did not cover the expenses.

1.2

A Capitalist in the Monarchy - The Baron of Mauá Makes Huge Investments in Telecommunications

The first submarine cables were inaugurated by D. Pedro II in 1874, connecting Rio-Salvador-Recife-Belém. The line Recife-João Pessoa-Natal was established in 1875. The first international connection by cable was built in the same year, with Portugal, having been concluded by means of a contract with the British 1.2. A CAPITALIST IN THE MONARCHY - THE BARON OF MAUA´ MAKES 5 HUGE INVESTMENTS IN TELECOMMUNICATIONS

Eastern Telegraph Company. The link with Europe was the result of the entrepreneurial spirit of Irineu Evangelista de Souza, Baron and later Viscount of Mauá, who participated in the organization and financing of the installation of the submarine cable. Ironically, the inauguration of the cable practically coincided with the Viscount’s bankruptcy in 1875. For thirty years, he had been the greatest entrepreneur and financier of Brazil, owner of an industrial complex in the Guanabara Bay who produced from steel to steam vessels. In 1851, Mauá’s industry generated the equivalent to 1 million réis and employed 1,000 workers. For comparison purposes, the Brazilian budget for that year was 27 million réis (Henshall and Jr., 1974). The lines set along railroad tracks, which did not belong to the government, comprehended over 7,000 km. Added to the State-owned lines, the total length reached 18,000 km. At that time, all maritime provinces were connected by telegraphic lines. In 1889 there was already a submarine cable connecting Belém to Montevideo, which was over 6,000 km long and serving the main ports. The Brazilian telegraphic lines were connected to those in the Pacific through the Argentinean Republic. The connection of Goiás and Mato Grosso to the network only took place after the Proclamation of the Republic, in 1890 and 1891, respectively. Around the same period of time, studies for connecting Manaus to Belém were initiated. The attempt was a failure and the work was done by the Amazon Telegraph Company, which obtained the necessary concession by the decree No. 2,000 of April 2, 1895. The inauguration of the main cable between the two capital cities took place on February 16, 1896. On December 31 of the same year Station Belo Horizonte was inaugurated (Alencar, 2001e). In that year, all the state capitals and other important locations were connected by means of telegraphic communication. The telegraphic network did not cease to grow, though. There was construction work everywhere, preferably on lines that closed internal circuits that would be able to substitute the main line, in case of breakdowns. Some states contributed directly, which, as a matter of fact, has happened since the first years, to the construction of the lines, if their interests were met. The Department experimented with many different pieces of equipment. The first ones were the double-Morse built by Stohrer, from Leipzig. Then came the Breguet system, with a display. During the Paraguay campaign, both in the southern line and in the battlefield, crank activated electromagnetic devices and Werner Siemens displays were used. Since 1866, experiments with the double-Morse had 6


been made. Its use was later generalized. In 1872, the Department received some units of the Hughes printing systems. The d’Arlincourt and Wheatstone A.B.C. were also tried in 1874, as well as the Jaite automatic. The Morse-Siemens, both the simple and the ink-printing ones with and without relays, had wide ranging applicability when there was a need to observe the determinations of the Saint Pittsburg International Convention, to which Brazil submitted in 1877. As translators, the polarized devices were adopted. These were identical to the ones built by Werner-Siemens for the Indo-European lines, which served as a model for the construction of the Brazilian Morse. 460 of those were constructed in the workshop of the Department. The first Duplex experiment was carried out in 1881. In 1885, the Estienne and the Wheatstone automatic were received. In 1889, other models were received. Among them are the Hughes, already modified, the automatic Morse by Meyer, the alternating current Duplex, and the Quadruplex by Siemens. In 1904, the Steljes were also experimented with, but without success. The traffic through the Baudot devices was inaugurated on November 15, 1897, between Central and São Paulo stations. In December 1901, three stations were equally upgraded: Central, Bahia, and Recife, with translation in Caravelas, covering a distance of 1,800 km. On July 14, 1903, the Baudot installations in the southern line were inaugurated between Central and Porto Alegre stations, with translation in Curitiba, in its triple variant and with extensions from Porto Alegre to Pelotas and Rio Grande, expanding to 4,500 km the complete extent of the lines operated by this system (”Fundaça˜ o Instituto Brasileiro de Geografia e Estat´ıstica”, 1986). On August 15, 1905. Station Fortaleza was also upgraded with double and triple Baudot devices, which extended to 5,500 km the length of the lines served by 14 double installations of the following types: double, triple, and with a scale, besides 14 spare sets. The service by the Hughes system, initiated in 1900 in Central, Petrópolis, and Juiz de Fora stations, was only kept in the first two, and even though it was underused, due to the shortage of service. Later on, in April 1906, the communication between Central Station and the urban station of Largo do Machado was established by means of this system. In the year of the Centennial Exhibition of Philadelphia, 1876, Alexander Graham Bell decided to set up an exhibit of his inventions for Sir William Thomson (Lord Kelvin) (Shiers, 1977). The telephone was developed between the fall of 1875 and the summer of 1877. 1.2. A CAPITALIST IN THE MONARCHY - THE BARON OF MAUA´ MAKES 7 HUGE INVESTMENTS IN TELECOMMUNICATIONS

Less than a year later, D. Pedro II inaugurated the telephone in Brazil. He had learned about it during the exposition of the first centennial of the United States’ Independence. It is said that the Emperor, upon making an attempt on the telephone, surprised, would have quipped, ”Holy God!! This thing speaks!” Enthused about the invention, he offered Graham Bell a sum of money to develop the telephone, on the condition that Brazil were the first country to use it. The inventor kept his word, and a line between the São Cristóvão Palace and the Imperial Family’s farm, Santa Cruz, was installed, long before the telephone was commercialized in the world (Lopes, 1997). In that year, Brazil adhered to the International Convention of Telegraphy (Lawrence F. Hill, Editor, 1947). The Bell Telephone Company was established in 1878 in New York, with 5,000 stocks issued and distributed among seven holders of the Bell Family and friends. The AT&T was created on February 28, 1885, in the state of New York, with the initial mission of constructing and operating long distance telephony circuits. In 1899, the AT&T became the holding company of the Bell Company (Chapuis, 1982). Here is a panorama of the evolution of the facts at that time. The first telephone exchange in Paris was activated in 1879. In the same year, D. Pedro II issued a permit to install one in Rio de Janeiro. The Companhia Telephonica do Brasil was created on November 15, 1879, with an initial capital of 1,5 billion réis, divided into 7,500 stocks distributed by the Western Telegraph Company, the first concessionaire of telephony in Brazil (Romano and Toddai, 1979). The telephone exchange in Rio de Janeiro is among the first in the world, inaugurated in 1881, the same period in which the Anglo-Portuguese Telephone Company installed the exchange in Lisbon (Kingsbury, 1972). In April 1885 Brazil had seven telephone exchanges in operation, with 3,335 subscribers. For comparison purposes, it is worth mentioning that, in the same year, the United States had 137,570 subscribers, Germany had 14,732, Italy 4,346, France 7,175, and Sweden had 5.705 (Kingsbury, 1972). Brazil also had experience in telecommunications: Father Roberto Landell de Moura had already made experimental transmission of telegraphy via radio in the country – years before Marconi (Avellar, 1985).

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Chapter 2 The Forgotten Hero – What Father Landell de Moura Used to Do in His Spare Time Father Landell, born in 1862, in Porto Alegre, built the first wireless transmitter for message transmission in 1892 (Carneiro, 1999). In 1894, he made the first transmission through hertz waves, with a broadcasting range of eight kilometers, from the top of a hill on Av. Paulista to the top of Sant’anna hill, in São Paulo (Oakenfull, 1912). Between 1903 and 1904, managed to patent three inventions in the United States: the wave (”hertzians or landellians”) transmitter, the wireless telephone and the wireless telegraph. The Brazilian patent of Father Landell’s device received the number 3279, in 1900 (Alcides, 1997). This chapter tells us a little bit about his history, so as to guaranty that his name shows among the great inventors of all times in the field of communications.

2.1

The Fantastic Father Landell de Moura

Roberto Landell de Moura was born in January 21st of 1861, in the city of Porto Alegre, Rio Grande do Sul, on the Rua de Bragança, as it was called then, today it is Marechal Floriano, at a house located at the same curb as the old Praça do Mercado, being baptized, along with his sister Rosa, on February 19th 1863, at the Rosario Church, of whose attendants, years later, and until he passed away, would come to be a vicar. He was the fourth of twelve brothers, sons of Inácio

Jose Ferreira de Moura and Sara Mariana Landell de Moura, both descendants of traditional families of the state of Rio Grande do Sul (Fornari, 1960). Landell de Moura attended the Colégio dos Jesu´ıtas, in Sao Leopoldo, a city located next to Porto Alegre, capital of Rio Grande do Sul. He attended the course of humanities, known as Classic at the time, equivalent to High School today. In 1879, Landell de Moura transferred to Rio de Janeiro, to attend the Escola Central, previously known as the Academia Real Militar, founded in 1792, by order of Dona Maria I, Queen of Portugal, bearing the name of Real Academia de Artilharia, Fortificaça˜ o e Desenho, and today goes by the name of Instituto Militar de Engenharia (IME). Apparently, he got a job at a secos e molhados warehouse to pay for his stay at the capital of the Empire. At Rio de Janeiro, Landell de Moura only stayed a few months. His brother, Guilherme, who intended to follow an ecclesiastical career, stopped by Rio de Janeiro, on his way to Rome, Italy, and convinced him to embrace priesthood. In the Brazil of the 19th century until the beginning of the 20th century it was important that each and every traditional family had a priest, as well as a military officer. In Rome, Landell de Moura started to attend the Colégio Pio Americano and also the Universidade Gregoriana, as a Physics and Chemistry student, subjects to which he showed a certain inclination since a child. He was made a priest in November 28th 1886. Back to Brazil, he stayed at the house of priests at the Morro do Castelo, Rio de Janeiro, when he had the opportunity of exchanging some ideas with D. Pedro II, Emperor of Brazil, about sound transmission, a subject that fascinated D. Pedro II since 1856 and that led him to finance part of Alexander Graham Bell’s work in the United States. After a short stay at Rio de Janeiro, Father Landell de Moura was designated chaplain and professor of Universal History of the Episcopal Seminary of Porto Alegre. In 1891, he was nominated parochial vicar of Uruguaiana and, in 1892, was transferred to the state of São Paulo where, for seven years, he worked as vicar in Santos, Campinas and Sant’Ana. In 1893, Father Landell de Moura worked in the city of Campinas, in the inlands of the state of São Paulo. It had already been a few years since he arrived from Italy, and the calmness of the city permitted the development of his ideas about wireless transmission, the principles of which were enunciated by him: “All vibratory movement that until today, as well as in the future, can be transmitted through a conductor, could be transmitted through a beam of light; and, by that same fact, could be transmitted without 10

CHAPTER 2. THE FORGOTTEN HERO – WHAT FATHER LANDELL DE MOURA USED TO DO IN HIS SPARE TIME

the aid of that agent”. “All vibratory movement tends to transmit itself in the direct ratio of its intensity, constancy and uniformity of its undulatory movements, and in the inverse ratio of the obstacles that oppose themselves to its propagation and generation”. “Give me an undulatory movement as extensive as the distance that separates us from other worlds that roll above our heads, or under our feet, and I will make my voice get there”. That last principle caused the wrath of many parishioners and some ecclesiastical authorities - in 1893 a Brazilian priest assured the transmission between different planetary systems and, against the centennial teachings of the Church, insinuating the existence of life in other worlds. His laboratory, built at the cost of a lot of sweat and labor, was, more than once destroyed. But Father Landell de Moura, patiently, rebuilt his equipments and continued his scientific work. Father Landell de Moura used to carry his mysterious packages, which contained the parts of a device invented by him, and said device -he assured- could be used to speak to another person several kilometers away, without the need of wires (Fornari, 1960). Some people that were interested asked him for proof. The priest - with his still rudimentary device, accomplished several wireless voice transmission and reception experiments, and all of them were completely successful. These experiments, some of which were taken in effect with the purpose of getting the authorities interested and gaining sponsors for the perfecting and industrial exploitation of his invention, took place, on the hill of the Avenida Paulista to the hill of Sant’Ana, at an approximated distance of 8 kilometers, in a straight line - therefore more than a year before the first and extremely simple experiment accomplished, by means of hertz waves, by Guglielmo Marconi, in Pontequio, near Bologna, in Spring of 1895, and about six years before his first radiogram. Despite the persecutions he had to bear with, Father Landell de Moura, declared, at the time (Fornari, 1960): “I want to show the world that the Catholic Church is not an enemy of Science and human progress. Individuals, from the Church, may have regarding this case or that, opposed to this truth; but they did this out of blindness. The true Catholic faith does not deny it. Although they might have accused me of having something to do with 2.1. THE FANTASTIC FATHER LANDELL DE MOURA

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the Devil, and interrupted my studies through the destruction of my devices, I shall always assert: this is as it is and cannot be in any other way... Only now I understand Galileo crying out: E pur se muove!” In 1900, after being persecuted by all kinds of shame and financial difficulties, he finally obtains a Brazilian Patent, under the register of 3279, especially granted, as described in the document, “For a device appropriated for the transmission of the word at a distance, with or without wires, through space, earth and water”. It is also worth reproducing the note published in the Jornal do Commercio, of São Paulo, in June 10th 1900, about one of Father Landell’s experiments (Alencar, 2000c): “Last Sunday, on Sant’Ana hill, in the city of São Paulo, Father Landell de Moura did an experiment with several of his inventions, with the objective of demonstrating some laws he discovered while studying the propagation of sound, light and electricity, through space, earth and the aqueous element, which achieved brilliant success. These eminently practical devices are, like many corollaries, deduced from the above-mentioned laws. Were present at the experiment Mr. P.C. P. Lupton, representative of the British Government, and his family, among others.” Even more interesting is the description given by Father Landell himself, of two of his inventions: “The Anematophone is a wireless device which has the same effects of regular telephony, but with added clearness and safety, as it works even under wind and bad weather. This device is impressive by the entirely new laws it reveals to us, likewise, what follows: The Teletition, a kind of wireless phonetic telegraphy, which two people can use to communicate with each other without being heard by anyone else. I believe that with this system of mine we could transmit electric energy, through great distances and with a lot of economy, without the need of wires or conductor cables.” 12


Father Landell reached the point of offering his inventions patent to Mr. Lupton, so that England could industrialize the wireless transmitter. The priest’s relatives and old friends, when inquired about this matter, said that Mr. Lupton, who was a formalist man and was not scientifically enlightened, did not even send word to England of Father Landell de Moura’s offer, because he did not believe in the practical (and especially commercial) utility of wireless telephony. Another version asserts that the consul, dazzled by the invention, that promised to completely revolutionize contemporary science, had advised Father Landell to transfer himself to Great Britain, in order to get his inventions patented, and after that necessary formality, donate them directly to Queen Victoria, so that he could get what he wanted from the Ambassador, the credentials that would recommend him to his country’s government - an alternative which the priest did not accept because he would have to pay for his transportation and maintenance. A third version of the episode says that the offer was sent, but as the AngleSaxon bureaucracy was just as sluggish as the Brazilian, the papers referring to the offer, ten years later were still forgotten on top of someone’s desk. Landell de Moura decided to leave for the United States, in 1901, so that he could get his inventions patented, seeing as how hard it was to mass-produce them in Brazil. He gathered some money and left, at the beginning of the year, thinking of returning quickly. A specialized North-American journalist, in a column for the New York Herald of October 12th of 1902, describes Father Landell de Moura as ”a gentleman of about forty years old” that reached the pinnacle of his genius. Father Landell de Moura lived in the United States for a period of three years, and during those years he enraptured the North-American scientific sympathizers with his inventions, among them the three most important to the world: the wireless Telephone, the wireless Telegraph and the wave Transmitter. There is an explanation as to why he stayed so long in the United States: three months after his arrival, in a document dated October 4th of 1901, Father Landell de Moura filed a petition for the patent of his first invention, the wireless Telephone, believing that, once the phone was patented (what he thought was a matter of weeks), the remaining months would be enough to obtain patents for the other inventions. The Patent Office in Washington however was not satisfied with the theoretical exposition of his petition. ”His theories were so revolutionary - they declared to him at that division, his brothers Pedro and Dr. Joao Landell de Moura, respected well known people at Porto Alegre, said that - the patent could not be granted without the presentation of a model of the device, for practical demonstrations” (Fornari, 1960). 2.1. THE FANTASTIC FATHER LANDELL DE MOURA

13

It was through the course of these three toilsome years that he filed a petition, in documents dated of January 16th of 1902 and 9th of February of 1903, respectively for the patenting of two other inventions: the wireless Telegraph and the wave Transmitter. The Patent Office nevertheless required the respective models of these two last inventions, which was done. Once presented, he was finally granted the three patents, and only after meticulous proofs and second-proofs, which consumed two years. This happened because the responsibility that that republic had towards the world, with the dispatching of the official recognition of such relevant inventions, which would fatally create new and unpredictable perspectives for the entire civilization, and it would not be wise to register them without having absolutely positive proof of the exactness of his theories and the efficiency of his devices. After these formalities were taken care of, they gave him the patents under the numbers of 771 917 in October 11th of 1904 (Wave Transmitter); 775 337, in November 22nd of 1904 (Wireless Telephone), and 775 846, of the same date (Wireless Telegraph), which are presented in Appendix A. With a feeling of completing his duty, Father Landell returns to Brazil at the beginning of 1905. Although he came back, it was not for long. Father Landell de Moura thought of staying only three months in Rio de Janeiro, and afterwards returning to New York, as there he had more scientific resources he intended to not only go on with his studies and experiments, but also to get six more of his inventions patented, which are missing until today. However the future canon was going to stay in Brazil, and would be forced to leave his works of scientific investigation. Father Landell de Moura also knew the properties of selenium, relating to its sensibility to blue, violet and ultraviolet rays, and although that did not constitute an essential part of one of his inventions, he was already using it in some of his transmissions. Father Landell de Moura was already utilizing the photoelectric effect, studied by Prof. Ernest Ruhmer, which won Albert Einstein the Nobel Prize in 1905, for the transmission of information using a light beam. To better clarify the subject, here follows an abridgment of five aerial transmission systems that can be found in the three patents dispatched by the NorthAmerican Government (Fornari, 1960): Acoustic transmission of the articulated or phonographic voice at a short distance, by means of an air current sent in the same trajectory of the voice with the objective of strengthening it. ? Luminous acoustic transmission, by means of a beam of light. Father Landell de Moura discovered the influence 14


of this beam, and the air current in the first system. The electric transmission of the human voice, through a beam of light produced by a voltaic arc, or any other actinium irradiation source. The receptor, which is a selenium capsule, only works under the effect of actinium rays, a property discovered by the priest. Electromagnetic transmission of the phonic, harmonic and luminous systems, and of the human voice, by means of the superposition of irradiant electrical vibrations. In this case Father Landell de Moura used his lamp with three electrodes and many other devices that are included within his patents, that combined, generated the effects he had in mind when telegraphing or phoning without a conducting wire. The electrical transmission of the phonic system, of the spoken word and of the musical note, by means of scintillations produced by a lamp of his invention, called scintillating, and which figured in his Wave Transmitter. The description of what would be landellian waves, made by a newspaper in São Paulo, and that in 1900 was occupied with the priest’s scientific theories, sounds like what today is denominated soliton (Fornari, 1984). “Although they might appear to be of the same type as hertz waves, they differ a lot from them, because it is almost possible to reduce the impact of these waves, and they are produced by electrical vibratory movements and possess neither constancy nor uniformity, which decreases little by little, while those ones, - the landellian waves - are not affected by these kinds of transformations, and are produced by electrical vibratory movements which undulatory values are continuous and always the same.” In his theories about the superposition of the vibratory, acoustic, luminous, radiant, and electromagnetic movements, to transmit and receive the phonic, luminous, harmonic and acoustic signals plus the articulated, or phonographic human voice through space, earth, and the aqueous element, those waves have a definite action, because they project themselves in a continuous mode, between the transmitting and receiving stations, forming a permanent and uniform undulatory field. And it was by means of this field that he sent his telegraphic and telephonic messages. 2.1. THE FANTASTIC FATHER LANDELL DE MOURA

15

The concept of this ”ondulatory field through space” was not only an ingenious idea, but also a scientific reality, and was later made use of for several purposes. Father Landell de Moura expressed in interviews so many times, the possibility of transmitting image through great distances - anticipating television, which would only appear decades later. Father Landell de Moura, after returning to Rio de Janeiro from the United States, in 1905, requested two ships from the President of the Republic, Dr. Rodrigues Alves, to demonstrate his inventions. One of the President’s deputy officers was so astonished to know that the priest talked about transmission at any distance that he advised the President not to permit the experiment, thinking that the priest was crazy. With the cloaked denial of the President’s Secretary’s office and the doubt that was launched against the legitimacy of his inventions, Father Landell de Moura, completely disillusioned, and deeply shaken, on an impetus of irritation, destroyed his devices and boxed his books, notebooks and documents, and finally decided to go back to priesthood exclusively, where he would surely find consolation for his misfortune and disappointments (Fornari, 1984). The Monsignor Roberto Landell de Moura, the forgotten pioneer, precursor of the wireless transmission, the forgotten Brazilian inventor, died anonymously, at 67 years of age, on July 30th of 1928, in a modest room in the Beneficência Portuguesa, of Porto Alegre, surrounded only by his relatives and half a dozen faithful and devoted friends. Four years before his death, on November 3rd of 1924, at the time he was already the Penitentiary Canon Landell de Moura, he declared to an editor of the ´ extinct porto-alegrense channel Ultima Hora, which interviewed him because of the announcement of the deployment of a broadcasting station of great potency in Curitiba, by the Rádio Clube Paranaense (Fornari, 1960): “God used my humble person to raise the veil that covers the secrets of nature, although the radiotelephony system, in use at present, is based on the principle of the superposition of the electric undulatory movements and the application of a light bulb similar to the Crookes light bulb, with three electrodes, a bit modified, and which serves the purpose of transmitting and receiving telephonic and telegraphic messages alike, without the need of a conducting wire.” Indeed, the discovering of this principle and the invention and application of this light bulb (valve), we owe to Father Landell de Moura, and not only for those 16


means, but also for others, all of which possessing great scientific reach. No one before him had utilized electromagnetic waves (landellian waves, as it was said at the time) generated by the above-mentioned light bulb for the transmission of information. This extraordinary conquest is due solely to him, for only in 1907 would Lee De Forest present to the World his famous ”Three electrode light bulb” utilized by Howard Armstrong to develop the homodyne radio in the United States. Brazil, which had forgotten it’s greatest inventor in the area of telecommunications, was starting its Republic as a member of the International Postal Union and taking part in all the international deals that regulated telegraphy, submarine cables and marine signalization (Oakenfull, 1912).

2.1. THE FANTASTIC FATHER LANDELL DE MOURA

17

18


Chapter 3 Telegraphy Survives the Republic – Marshall Rondon Takes the Telegraph to the Inlands of the Country The stage of historic pioneers did not keep up with the republic. The lack of political orientation to mark out the boundaries of an ordered growth established a period of sluggish growth, which did not keep up with the pace of the real necessities of the Country. With the addition of a struggle of interests and pressure coming from international companies, which took over the area at the time (Alencar and Alencar, 1998).

3.1

Telegraphy Dominates the Scenario in the Beginning of the Century

In 1901, during the presidency of Campos Sales, is inaugurated in São Paulo the Canadian enterprise Tramway Light and Power Company, which had started the exploration of the hydroelectric resources in the Southeast in 1899, with the construction of plants in Serra do Mar (Dickenson, 1978). With headquarters in Toronto, this company would come to monopolize several kinds of public services in São Paulo and Rio de Janeiro – including communications (Ribeiro, 1985). Three years later the Tramway Light and Power Com-

pany would be deployed in Rio de Janeiro, through an association between the American and Brazilian entrepreneurs Percival Farquhar and Alexander Mackenzie. The same American entrepreneur that in the future would come to be involved in several controversial enterprises which would be harmful to the Brazilian economy (Ribeiro, 1985). In 1904, wireless telegraphy experiences are done in Brazil. The third PanAmerican Congress in Brazil was worthy of mentioning, watched by 80 representatives from 20 countries. During the Congress, the Brazilian government established at the Monroe Palace, in Rio de Janeiro, a complete telephony system, including telegraphy and postal service entirely free of charge for the delegates (Oakenfull, 1912). The following year the President Rodrigues Alves denies the priest Landell de Moura the opportunity to substantiate the telegraphic communication between ships at sea. The President thinks that the priest is crazy (Ribeiro, 1985). Affonso Penna takes on the Presidency in 1906. The Rondon committee advances, in 1907, at the construction site of the telegraphic cables that would connect Rio de Janeiro to Acre, Mato Grosso and Amazonas. Unfortunately the Nambiquara Indian reserve, which until 1907 had not been penetrated by Europeans, ended up being crossed by the telegraphic line which connected Cuiabá to the stations located at the Northwestern frontier of the Country, which until then was only accessible by a long journey through the Amazon River. The contact with “civilization” ended up reducing the numbers of that tribe of rudimentary farmers from approximately 10.000 to 1.000 inhabitants (Henshall and Jr., 1974). Marshall Cândido Mariano da Silva Rondon promoted, in parallel with the construction of the telegraphic cables, a scientific expedition for geological studies, of the fauna, flora and ethnology of Central Brazil and the Amazon (Ribeiro, 1985). Rondon is considered the Patron of Communications in Brazil and the Rondon award still remains the greatest Medal of Honor granted in the area of communications in the Country. The electric telegraph, launched in 1852, was already spread out over 31.000 km of cables in 1911, during the presidency of Hermes da Fonseca. The telegraphic station of Fernando de Noronha had already received messages coming from the Eiffel Tower, in Paris. The Olinda station was already receiving messages from Port Etienne, in Mauritania. The most important station in South America would be the one at Cabo São Tomé, Rio de Janeiro, reaching virtually all of the national territory and the South Atlantic (Oakenfull, 1912). Western’s underwater cables ranged from Brazil to Europe to the United States. A new kind of cable had been suggested for the connection with Asuncion, Paraguay. 20 CHAPTER 3. TELEGRAPHY SURVIVES THE REPUBLIC – MARSHALL RONDON TAKES THE TELEGRAPH TO THE INLANDS OF THE COUNTRY

The telegrams were forwarded by pneumatic cable, as were the express letters inside the county of Rio de Janeiro. The activity of the year before showed two and a half million dispatches. The Postal Department had organized, in 1910, a savings account, with deposits from 100 réis to 1.000 réis, for investing in public funds. The interest rate on the deposits was 4%. To make it easier to understand the values at the time, a mailman received between 100 and 300 thousand réis, and one kilogram of meat cost from 400 to 800 réis. Rio de Janeiro, Sao Paulo and Bahia could count on organized telephony services, as could Rio Grande do Sul. There were about 40 telephonic installations over the country, and just one electrical material factory, with a capital of 50.000 réis and 33 employees (Oakenfull, 1912). The following year, the Canadian subsidiaries in Rio and Sao Paulo combined themselves to form the Brazilian Traction, Light and Power Co. Ltd (Light) to exploit the services of trams and telephony. Around 1940, Light and the American and Foreign Power Co. produced together, 80% of all the energy consumed in the country. Later on the Brazilian Traction, Light and Power Co. Ltd. transformed into the Brascan Ltd. and would start to diversify its investments in Brazil. In 1965, Brascan’s expansion would involve the banking, food and beverage, wood, vehicles, mining, textile, and agricultural sectors. In 1974, Brascan would come to be the largest foreign company working in the country (Dickenson, 1978). In the fiscal year of 1913, the gross revenue of the Brazilian telephonic systems reached US$ 1,500,000, while the telegraphic systems achieved the gross amount of US$ 4,045,00. That summed up to a profit of US$ 47.50 per telephone, compared to US$ 33.00 in the United States (Kingsbury, 1972). On January 1st 1914, Brazil had at its disposition 39.183 telephones, of which 1.165 were in the hands of the government, and all the rest belonged to private companies. That summed up to 0,26% of the total number of telephones in the world, with 0,2 telephones for each 100 inhabitants. The United States already had 9.542.017 telephones and 64,09% of the telephones in the planet. Germany had 1.420.100 telephones, and all of them belonged to the State. Around 68% of Italy’s telephones belonged to the State, at a total of 91.720 telephones including those of private companies. The totality of the telephonic systems of France belonged to the government, at a total of 330.000 telephones. In Sweden, of the 233.008 available telephones, 158.171 belonged to the government (Kingsbury, 1972). The investment in the Brazilian telephonic system in January of 1914 amounted to US$ 11,013,800, corresponding to 0,53% of the world total and US$ 281.00 3.1. TELEGRAPHY DOMINATES THE SCENARIO IN THE BEGINNING OF21 THE CENTURY

per telephone installed (Kingsbury, 1972). This investment per telephone was very high, if compared to the US$ 121.00 spent by the Americans, and only surpassed by the cost of installation in Bosnia (US$ 350.00) and in South Africa (US$ 303.00) (Kingsbury, 1972). In 1913 Brazil had a telegraphic network divided in five classes (Buley, 1914) (Buley, 1919): 1. The national service, or General Administration of the Telegraphs, that belonged to the Ministry of Communications and Public Works, controlled over 32.000 km of lines and approximately 700 servers. 2. The railway network telegraphs, with 20.000 km of lines and 1.500 offices over the country. 3. The submarine cables of the Western Telegraph Co., with 18.000 km of lines and nine offices. 4. The underwater cables of the Amazon Telegraph Co., distributed throughout 3.000 km of lines and 17 offices. 5. The Rio Grande do Sul system, utilizing 1.600 km of lines and 30 offices. However not all of the railway offices worked in consonance with the General Administration. There was a fixed rate of 600 réis, for the emission of telegrams, besides an additional rate that varied depending on the state. A telegram to France, Germany or Holland cost 3,63 francs. A franc amounted to 600 réis (Buley, 1919). There were six wireless telegraphy stations, called Marconi stations, in Rio de Janeiro, besides others in Olinda, Bahia, Santos, Santa Catarina, Rio Grande do Sul and on the island of Fernando de Noronha. And direct communication with Europe was intended with that last one (Oakenfull, 1912). The Amazon Region had stations in Santarém, Manaus, Porto Velho, Rio Branco, Sena Madureira, Santo Antônio, Pará and one in the territory of Acre. The maritime telegraphy suggested years before by Landell de Moura, was being used to its full extent. A connection to a German or Hollander Ship cost at the time just a little over a franc per word (Buley, 1914). The telephonic service was divided into Federal and private. The Federal Government had at its disposal lines in Rio de Janeiro that also had a connection with Petrópolis, Niterói, and Teresópolis. There were 25 private companies in Rio Grande do Sul, 14 in São Paulo, 10 in Rio de Janeiro and others in Piau´ı (3), 22 CHAPTER 3. TELEGRAPHY SURVIVES THE REPUBLIC – MARSHALL RONDON TAKES THE TELEGRAPH TO THE INLANDS OF THE COUNTRY

Bahia (2), Minas Gerais (2), Maranhao (2), Ceará, Pernambuco, Alagoas, Esp´ırito Santo and Paraná (1) (Buley, 1919). The amateur radio was burn in the 1910’s, which demonstrated an enormous growth assisted by the continental dimensions of the country. The broadcasting appeared in the same decade, product of the pioneers Augusto Joaquim Pereira’s and Oscar Moreira Pinto’s work. Augusto Periera founds, with a group of amateurs, the Rádio Clube de Pernambuco on April 6th of 1919. It was the first broadcasting station of the country and one of the first radiophonic institutions of the whole World. The other pioneer stations were the PCGG of Rotterdam, founded in November 6th of 1919, the KDKA of Pittsburgh, which appeared in November 20th of 1920, and the WWJ of Detroit, created in October 20th of 1921 (Carneiro, 1999). On November 2nMarconi stationsd of 1920, the Westinghouse Electric Co. experimented with the radio transmission in the country. The experiment would be renewed in 1922, in Rio de Janeiro. Oscar Moreira Pinto, one of the Navy’s radio telegraphers, joined the Rádio Clube de Pernambuco in 1922, being in charge of acquiring a 10 W transmitter from Westinghouse. This transmitter made possible the tuning of the station’s signal throughout the suburbs and downtown Recife. Recife had at the time, 250.000 inhabitants and was the main economic, political and cultural center of the North and Northeast. Pernambuco had 2 million inhabitants; one of the most agitated harbors of the country and was governed by Manoel Borba (Alcides, 1997). In Rio de Janeiro, in 1923, was founded the Rádio Sociedade do Rio de Janeiro, of Edgar Roquette Pinto, now in a more professional style (Carneiro, 1999). Taking place at the Academia Brasileira de Letras (Brazilian Academy of Letters), it would later be converted into the Rádio Ministério da Educaça˜ o. Roquette Pinto was a pioneer of the movies and television, conceiving them as instruments for popular education (Ribeiro, 1985). Together with Henrique Moritze, professor at the Escola Politécnica, he gave the first steps in the utilization of the radio as an educational vehicle (Lawrence F. Hill, Editor, 1947). In the words of Roquette Pinto himself (C. Neotti, Editor, 1980): “All the homes spread out over the immense territory of Brazil will freely receive the moral comfort of science and art; peace shall be a definite reality between the nations. All that shall come to be, thanks to the miracle of the mysterious waves that silently transport in space the harmonies.”

3.1. TELEGRAPHY DOMINATES THE SCENARIO IN THE BEGINNING OF23 THE CENTURY

The Rádio Sociedade, which prefix was PRA-A (later PRA-2), was acquired by Assis Chateubriand in the 50’s, becoming part of the Diários e Emissoras Associados (Morais, 1994).

3.2

Juscelino Wanted to be a Telegrapher – The Country Prepares Itself for the Process of Making Companies State Owned

Artur Bernades had succeeded Epitácio Pessoa for President. Juscelino Kubitschek, two years earlier, had been approved in a concourse to be auxiliary telegrapher in Belo Horizonte. He worked really hard to learn the Morse alphabet, and become José Maria Alkimim’s colleague (Ribeiro, 1985). The Rádio Clube Paranaenese, in Curitiba, is created in 1924 (C. Neotti, Editor, 1980). When it comes to scientific research in the area of communications, Brazil did not have an institute or a specialized society yet - what would only happen later on – but already had a few members in institutions in other countries. The Institute of Radio Engineers (IRE) was established in New York, in May 13th 1912, by means of the fusion of the Wireless Institute with the Society of Wireless Telegraph Engineers. At the time of the foundation, the Institute that later on would originate the Institute of Electrical and Electronics Engineerrs (IEEE) had less than 50 members that had paid their annuity (Institute of Radio Engineers, 1927). Around 1927, the IRE registered three members in Brazil: Mário de Barros Barreto (F’24), was director of the Serviço de Rádio Naval do Brasil, in Rio de Janeiro; Carlos G. Lacombe (A’25) and William G. Lush (A’20), worked at the Companhia Rádio Telegráphica Brasileira, also in Rio de Janeiro. All of South America had 12 IRE associates (of Radio Engineers, 1927). In 1930, the total amount of members of the IRE was of 5695, with 7 members in Brazil and 25 throughout South America. São Paulo already contributed with 2 members; the remaining members belonged to Rio de Janeiro. The president of IRE was the controverter Lee de Forest, who claimed to be the inventor of the valve and the radio, enemy of Edwin H. Armstrong, inventor of the FM radio and the regenerative amplifier. The Committee for the Standardizing of the IRE had published, in the Institute’s Yearbook of 1929, a list of standards and mathematical symbols that should be observed when writing articles for the IRE periodicals (of Radio Engineers, 1930). 24 CHAPTER 3. TELEGRAPHY SURVIVES THE REPUBLIC – MARSHALL RONDON TAKES THE TELEGRAPH TO THE INLANDS OF THE COUNTRY

Electrical recording and the microphone modernized the record industry, in 1927, raising its capacity. Simultaneously, the radio stations increase their potency and improved receptors appear in the market, which begin to be purchased by the masses. Washington Luis’s management inaugurates the radio age in Brazil (Ribeiro, 1985). The first experiments with television delighted Rio in 1929. The first automatic telephones are installed. Washington Luis also reopens highways, modernizes harbors and represses workers with the Celerada law (Ribeiro, 1985). The first automatic exchange in the country, of the Rotary type, was deployed in Rio de Janeiro in 1930. Buenos Aires had its first Strowger automatic exchange deployed years before, in 1924 (Chapuis, 1982). Between 1930 and 1955, the number of telephones in the country jumped from 160.000 to 746.000, while Argentina went from 280.000 to 1.080.000. A little more than 82% of all the Brazilian telephones were automatic in 1955 (Chapuis, 1982). Sponsored by the Diários Associados, which were controlled by Assis Chateaubriand at the time, Guglielmo Marconi pressed a button in Italy and turned on, by means of a radio signal, in October 12th of 1931, the Cristo Redentor’s lights, the symbol of Rio de Janeiro (Carneiro, 1999). Chateaubriand had met Marconi in Italy, in the 20’s, when he did a story as an international correspondent. A passage from the interview brings to mind something that Father Landell de Moura had said decades before (Carneiro, 1999): “Marconi had just finished trying a series of communications with the inhabitants of Mars, calling them with his short wave devices. – So did you speak to them? I asked him, as we were having tea, his treat, in the hall of the Grande Hotel, in Rome. Yes, I called them insistently, but they did not answer. I think the Mars operators are on strike”. Once the event ended, Marconi sent Chateaubriand a telegram, with the following terms (Carneiro, 1999): “Invio a lei e ai Diarios Associados le mie piu sinceri felictazioni per la loro importante ed elevata iniziativa destinada a far vibrare nello stesso istante il pensiero di Roma centro del cristianesimo e della civita latina ed il pensiero del grande popolo brasiliano”. During the 30’s, the production of electric engines, refrigerators and radios develops, although still depending on imported components. Its worth to mention 3.2. JUSCELINO WANTED TO BE A TELEGRAPHER – THE COUNTRY 25 PREPARES ITSELF FOR THE PROCESS OF MAKING COMPANIES STATE OWNED

the institution of the Código de Comunicaço˜ es (Communications Bylaws) in 1932 by José Américo Almeida, Minister of roads and tasks at the time, which was not used in his absence and was dropped. In that same year one of Getúlio Vargas’s Law-decrees authorizes the propagation of commercials over the radio (Monteiro, 1991). The Rádio Nacional was inaugurated in 1936, in Rio de Janeiro. A Hora do Brasil starts being transmitted all over the country in 1938. Two years later, in 1940, the Estado Novo would take over the Rádio Nacional. The department of Press and Propaganda (DIP) had been created the year before, with a budget of US$ 300 million, entrusted with the censorship of the means of communication. Lourival Fontes was chosen to lead it (Monteiro, 1991). The radio becomes an efficient means of promoting patriotism. Getúlio Vargas utilizes the radio’s communication power to make monumental speeches, while simultaneously prohibiting the União Nacional dos Estudantes and Oswald de Andrade of being transmitted by the press (Godoy, 1991). The schedule of every radio station is supervised by the Department of Press and Propaganda. Moreover, in small communities the use of the loudspeaker is still common at public squares as a news vehicle (Loewenstein, 1942). In 1941, the Rádio Nacional airs the first Brazilian radio soap opera: Em Busca da Felicidade (In Search of Felicity), written by the Cuban Leandro Blanco and sponsored by Colgate toothpaste. The Rádio Nacional (RJ) and the Record (SP) begin to transmit the news show Repórter Esso (Monteiro, 1991) (Ribeiro, 1985). Carmem Miranda is the spokesperson for General Electric, to convince the Brazilians to acquire the radio G.E. Tom Natural, while Philco International Corporation imports its Rádio-Fonógrafo from its headquarters in New York (Godoy, 1991). While the war went on in Europe, the great corporations made their international deals, which like this type of business, knows no ideologies or frontiers (Mirow, 1978). The first completely electric voice synthesizer, known as Pedro the voder (voice demonstrator), was invented by Homer Dudley and presented in 1939 at the New York world fair. The name Pedro, comes from Dom Pedro II, Emperor of Brazil, present in 1876 at the first Centennial Exhibition at Philadelphia, when the phone was demonstrated by Alexander Graham Bell. An episode involving D. Pedro that became famous was when he, after hearing a voice coming from the telephone, exclaimed: My God this talks! Around that time the multinational companies were not very interested in the extinction of the monopolies of public services. The Toronto Traction Light and Power, Light for short, for instance, monopolized the energy, light, gas, streetcar, 26 CHAPTER 3. TELEGRAPHY SURVIVES THE REPUBLIC – MARSHALL RONDON TAKES THE TELEGRAPH TO THE INLANDS OF THE COUNTRY

and telephony services in Rio de Janeiro and São Paulo. Eurico Gaspar Dutra, President at the time, did not appear to be worried about that exploitation of the public services by foreign companies. Nor did he manage to receive the enormous war debt that England owed to the country. Something around US$ 1 billion and two hundred million dollars at the time. Curiously, the enormous capital accumulated by Light since its creation, did not come from outside, it grew in the country, helped by the monopolist exploitation of public services. This fact is documented in an article by Américo Barbosa de Oliveira, published in the magazine Conjuntura Econômica da Fundaça˜ o Getúlio Vargas, in 1948 (Ribeiro, 1985). The same company that would be bought later on by the government, for twice the price that was asked for. There were just a few years left until its concession in the country ended, and its assets went over to the Union. Francisco Pessoa de Queiroz inaugurates the Radio Jornal do Commercio in 1948, in Recife. He rented two charter planes to bring guests in from other states. The inauguration had the presence of the President Eurico Gaspar Dutra and of the Governor Barbosa Lima Sobrinho, who later on would become the most longevous president of the Associaça˜ o Brasileira de Imprensa (ABI). The station’s equipment was the most advanced, acquired in England from Marconi Wireless Telegraph (Teles, 2000). In the following decade, on April 18th of 1950, a preview of television occurs in Brazil, with the transmission of a presentation by the friar José Mojica. The first image that appeared on television in the country showed the announcer Homero Silva introducing the auxiliary bishop of São Paulo, Dom Paulo Rolim Loureiro blessing the station’s studios. In that year the first television station in Latin America is inaugurated, the TV Tupi-Difusora, prefix PRF-3, of São Paulo (Carneiro, 1999). The first news show appears in September 19th 1950, Imagens do Dia, hosted by Rui Resende. There were only two hundred television receptors in São Paulo and all the programs were live. The first national television sets, were Invictus brand, and began being produced in the country in 1951. In the same year the TV Tupi is installed in Rio de Janeiro and the first televised soap opera reaches the Brazilian homes: Sua vida me pertence, with Walter Foster and Vida Alves. In that year the Rádio Nacional was a huge success with the radio soap opera O Direito de Nascer (Ribeiro, 1985). In the following year the TV Paulista is founded, Channel 5. In 1953, are inaugurated TV Record, in São Paulo, and TV Rio, Channel 13. TV Tupi airs Repórter Esso. Two years later, TV Record accomplishes the first direct transmis3.2. JUSCELINO WANTED TO BE A TELEGRAPHER – THE COUNTRY 27 PREPARES ITSELF FOR THE PROCESS OF MAKING COMPANIES STATE OWNED

sion: a game between Santos and Palmeiras, at Vila Belmiro. In December 28th 1956, the decree number 40.439 granted nationalization to the Sociedade Anônima Brazilian Telephone Company, under the name of Companhia Telefônica Brasileira, signed by the President Juscelino Kubitschek. The company, despite being nationalized, still had its stock held by the Canadian Brazilian Traction and Light Power, which offered a terrible phone service. Juscelino Kubitschek, the former telegrapher apprentice, was back into the communications area. In 1956, the television reached over 1 million spectators all over the country. The first microwave link is installed in 1957, connecting Rio de Janeiro to São Paulo and Campinas. The Serviço Nacional de Telex is created in 1960. In that same year the videotape was introduced in Brazilian television, anticipating the decadence of local generators and the strengthening of the larger stations (Ribeiro, 1985). The TV Alvorada was inaugurated in Brasilia, connected with the Grupo Record, and the TV Bras´ılia, which belonged to the Diários Associados. A strange fact related to television was the promulgation of the decree of 1961, which set the commercials at three minutes – it is not reported that it has been respected or revoked. The following year Jânio Quadros publishes a decree obliging the dubbing of all the movies shown on television (Monteiro, 1991). In 1962, Leonel Brizola, Governor of Rio Grande do Sul at the time, takes over a local phone company, subsidiary of the American multinational International Telephone and Telegraph Company (ITT). The expropriation of the ITT led to the wrath of the American ambassador Lincoln Gordon, who threatened to invoke the Hickenlooper Amendment and retaliate against Brazil. The North-American pressure reaches its peek with the visit of Robert Kennedy, brother of the American President, who comes to complain to João Goulart against the Brazilian steel production for exportation program, against the application of the Profit Shipment Law approved by congress, and against the alienation of Bond and Share and ITT companies (Ribeiro, 1985). President João Goulart, who was on the verge of taking a trip to the United States, agreed to pay 8 million dollars to ITT. This amount was not much if compared to the 131 million dollars that were going to be invested in the Northeast by the United States as a concrete result of João Goulart’s visit. In Washington the President of Brazil also promised President Kennedy a ”fair treatment” for the public companies in Brazil that belonged to foreign groups (Roett, 1972). Actually, among the plans of Jango’s young Minister of Planning, Celso Furtado, was the nationalization of all the concessionaries for public services of communications and electric energy, many of which belonged to North-American 28 CHAPTER 3. TELEGRAPHY SURVIVES THE REPUBLIC – MARSHALL RONDON TAKES THE TELEGRAPH TO THE INLANDS OF THE COUNTRY

companies. Celso Furtado’s plans were impressive for their logic and for their detailed performance and could have permitted or facilitated the obtaining of development goals for the government. But the intended reforms weakened or destroyed the interests of traditionally important groups in the country, besides that parcel of society that benefited from the foreign investors (Tullis, 1973). The first program to cover the whole country, simultaneously, was a mass held by father Peyton in 1964. Famous North-American catholic orator, this priest came to Brazil escorted by an agent of the Central Intelligence Agency (CIA) of the United States. In reality, according to Darcy Ribeiro, it was an operation, technically assembled in Washington, to destabilize Joao Goulart’s government. After the assassination of John F. Kennedy, the severe American way of governing was at control once again, and João Goulart was an obstacle the Washington’s hegemonic politics. In March 15th of 1964, through a presidential message to congress, João Goulart announces the implantation of Eletrobrás, the University of Bras´ılia and Embratel. The coup d’etat took place and shortly later the Rádio Nacional undergoes military intervention. Thirty-six of its employees are dismissed (Ribeiro, 1985). The Americans start charging the expenses they had with the coup d’etat of 64, making the government buy for 135 million dollars the companies that Brizola had expropriated for 1 dollar, but João Goulart had only paid 30 million including the 8 million from ITT. Because of this incident Handson’s Letter from Wall Street calls the Brazilians “the clowns of the world” for buying ANFORP, Bond & Share and ITT’s holding, for 135 million dollars. The buy, negotiated by Roberto Campos, foresaw the payment of 10 million dollars cash, probably the bribe, US$ 24.650.000,00 in 20 years, with a 6% interest rate; and 100 million, within the same amount of time, with a 6,5% interest rate. But Brazil only received 75% of the amount of stock bought. The other 25% was given to the bigshots that ANFORP bribed or to the directors whose dedication was awarded (Ribeiro, 1985). And so ends, melancholically, the first nationalization in the area of telecommunications in the country. Others followed, with the creation of Embratel and Telebrás, as the doctrine of national security spreads in the military management. The TV Globo starts functioning in 1965, by means of a deal with the TimeLife Group of the United States. Within four years, Globo would release the first regular TV show transmitted on national television, The Jornal Nacional. In the 90’s, the president of Globo, journalist Roberto Marinho, would be considered the Brazilian Citizen Kane – because of the amount of power he would hoard in a couple of decades (Augusto, 1993). Brazil becomes an associate of the Consórcio 3.2. JUSCELINO WANTED TO BE A TELEGRAPHER – THE COUNTRY 29 PREPARES ITSELF FOR THE PROCESS OF MAKING COMPANIES STATE OWNED

Internacional de Comunicaço˜ es por Satélite (Intelsat). Intelsat was established in August 1964, as a joint venture and the following year it already launched the first commercial communications satellite, the Early Bird. This satellite served the United States and Europe, with 240 bi-directional voice channels (Leinwol, 1979). In that year the shows O Fino da Bossa and Jovem Guarda were aired by TV Record. Elis Regina hosted the first one, the played mostly Bossa Nova songs, together with Jair Rodrigues, and Roberto Carlos hosted the second one, a rock and roll show (Monteiro, 1991). At that time Brazil had approximately 7,5 million radios and television sets (Benton, 1969). Due to the lack of interest of Light in expanding and upgrading its telephony services, the government decides to nationalize it. The company agrees completely with the proposal and receives twice the amount it had asked for the property left to die. The amount agreed to in dollars, was divided in eighty settlements to be paid one per trimester, with an interest rate of 6% a year (Ribeiro, 1985). The following year, 1.320.003 telephones were installed all over the country. It is worth elaborating a bit about the situation of the Brazilian telephonic system before the creation of Embratel and Telebrás. The largest portion of the Brazilian telephony systems was installed and managed by foreign companies. After World War 2, the Brazilian governments did not permit public rates, including the phone rates, to accompany the rise of the prices so as not to induce pressure over the inflation rates. The phone companies reacted cutting investments and even causing a certain lack of investments in the sector. To remedy the telephonic chaos that existed, in 1966 the Brazilian government negotiated the purchase of the Companhia Telefônica Brasileira (CTB) and its associated companies, Companhia Telefônica de Minas Gerais (CTMG) and the Companhia Telefônica do Esp´ırito Santo (CTES), responsible for 62% of the telephones in the country, covering 45% of the Brazilian population. These companies were acquired for the cost of US$ 96,315,787.00, with the payment due in a term of 20 years. After the purchase, the CTB and its subsidiaries were reformulated, with new statutes and administration. The rates were adjusted, in accordance to the cost of the services provided. The CTB started a modernization and expansion program, with the installation of 522.528 phone lines. The situation, in 1968, was critical to the point that two psychiatrists, following different of lines of research, had come to the same conclusion that the carioca user suffered from anxiety neurosis and acute frustration due to the terrible phone service provided in Rio. At best, the user had to wait from two to five minutes for 30 CHAPTER 3. TELEGRAPHY SURVIVES THE REPUBLIC – MARSHALL RONDON TAKES THE TELEGRAPH TO THE INLANDS OF THE COUNTRY

a line signal, but the wait could be extended up to 45 minutes and the result was always a wrong number or complete silence (Bergsman, 1970). Carlos Drummond de Andrade, public employee in Rio de Janeiro and one of the greatest poets in the country, was not inattentive to what happened in the telecommunications setting. Basing himself on the carioca’s experience with the CTB, he wrote a chronicle that narrated the despair of a would-be user of the telephone service whose choice of ”purchase” of the line was already in the family for three generations - having been handed down from his father on his deathbed. After fighting against CTB for so long, the user ends up passing away in the waiting line (Alencar, 2001b). The Companhia Telefônica Brasileira (CTB) claimed to be doing everything that was possible with the old and inadequate equipment that was inherited after the nationalization of the Canadian subsidiary two years before. Even the lightest rain was enough to inundate the subterranean cables and put the system off the air for several days. To make it even more complicated, the CTB had to honor promises of installation of telephonic services that were made by the multinational company 20 years before. The CTB, following the Ministry of Communication’s directives, started the expansion of the system with the emission of stock that was obligatorily sold to the users for approximately 600 dollars. Meanwhile, the action of the parallel market of telephones could be felt at that time, when a telephonic service could be ”purchased” for the reasonable price of 1.000 dollars. Actually this modality of financing of the service by the consumer was inaugurated by Light in the 50’s, in Rio de Janeiro as well as São Paulo, where it was concessionaire of the telephonic and electric energy services (Bergsman, 1970). The government’s expansion plan started to show some results, and in January of 1968 the Country had 1.472.677 telephones, with a 66,3% growth if compared to the year of 1958. That sums up to 1,7 telephones per 100 inhabitants (Benton, 1971). The first TV transmission via satellite was received in Brazil in 1969, the launch-off of Apollo IX in the United States (Monteiro, 1991). In that year the country had 6 million television sets (Benton, 1971). In the beginning of 1970, Fairchild Industries, utilizing the ex-director of NASA Werner von Braun, instituted a communications system by satellite with the Brazilian Space Agency. The project was under the patronage of the Instituto Nacional de Pesquisa Espacial (INPE) (Young, 1982). The Country already had 93.215.301 inhabitants, according to the IBGE census (Fitzgibbon, 1974). It was the 90 million in action, inebriated with the conquest of the third time championship in soccer, while the country dived into the muddy waters of the Em´ılio G. 3.2. JUSCELINO WANTED TO BE A TELEGRAPHER – THE COUNTRY 31 PREPARES ITSELF FOR THE PROCESS OF MAKING COMPANIES STATE OWNED

Médici period. The production of electric and communications equipment in the country was practically zero until 1919. In 1939, it represented only 0,9% of the industrial transformation, reaching 1,6% in 1949, and 3,9% in 1959. At the end of 1969, that percentage reached 6,3% of all the Brazilian industrial production. Only the communications equipment sector corresponded to 5% of the total amount gained in the capital goods industry in 1949. That could be translated to 10 million dollars at the time. That participation went up to 6% in 1959, which equaled to a rough amount of 16 million dollars. A dollar bought Cr$ 160,00 in 1959 (Bergsman, 1970). Around 1961, Brazil was self-sufficient in the production of domestic devices, including television sets. Although showing a growth of 8,8% in 1970, the production of the electric and communications industry was below the national average (Henshall and Jr., 1974).

3.3

Conclusions

The private initiative had no interest at the time in applying resources in certain areas, which were apparently non lucrative on a short term, so they let the government do it. It is common knowledge that there are areas that do not demand a lot of initial resources, besides the long maturing time, to start generating profit. It is the case of communications system. There was certain disorganization in that sector, until the early 60’s, when the Empresas Pólos and Embratel were created. The largest portion of the companies was private or multinational (Western Telegraph & Telephone Co., International Telegraph & Telephone Co., Light). There were over 200 companies - and calling Manaus could not be done, for instance, because it was not profitable for those companies. Nobody would put money in the Amazônia, a region with a very low population density, with difficult access and almost zero industrialization. The tropodifusion system installed by Embratel in the North region consumed a good part of the government’s investments at the time. The multinational private initiative only wanted to invest in the Rio-São Paulo-Recife axis. Practically all of the previous system was centered on that triangle.

32 CHAPTER 3. TELEGRAPHY SURVIVES THE REPUBLIC – MARSHALL RONDON TAKES THE TELEGRAPH TO THE INLANDS OF THE COUNTRY

Chapter 4 The State Age and the Autonomous Development Project during the Military Regime The military coup of 1964 instituted a Brazilian style repressive regime. A unique dictatorial system, in which the dictators were elected and fulfilled their tenure of office. But the successive military government’s strategists had also learned the lesson that the Americans gave at the beginning of the 20th century, when they nationalized Guglielmo Marconi’s communications company, in favor of national security. It was essential to maintain control over the communications sector. João Goulart facilitated the military’s plan, creating Embratel a few days before being deposed. In no time at all, practically all of the companies belonged to the federal government, in a nationalization process without precedent in Brazilian history. This chapter describes that process, with details of that history that are hardly known or explained.

4.1

The Military Regime and Communications in Brazil

The basis of present legislation about communications was the law 4117, promulgated in 1962. The Conselho Nacional de Telecomunicaço˜ es (Contel), the Brazilian Council for Telecommunications, which created the Plano Nacional de Telecomunicaço˜ es (National Telecommunications Plan), the Empresa Brasileira de Telecomunicaço˜ es (Embratel) in 1965, to implant and exploit the services, and

the Fundo Nacional de Telecomunicaço˜ es (FNT), the Telecommunications Fund, as a source of resources so that Embratel could implant the national microwave roots. The Ministério de Comunicaço˜ es (Ministry of Communications) was created in 1967, and later appeared the Telecomunicaço˜ es Brasileiras (Telebrás) and the Empresas Pólos, enterprises formed by the aquisition of the former private owned companies. Artur da Costa e Silva succeeds Humberto de Alencar Castello Branco as President, and chooses the professor at the Escola Politécnica da Bahia, Carlos Furtado Simas as Minister for Communications. He had been director of the Telefônica de Salvador, later incorporated to Telebahia (Fiechter, 1972). After the death of Costa e Silva, the military ministers prevent the VicePresident from going into power, and “elect” Emilio Garrastazu Médici for President. Which recommends colonel Hygino Caetano Corsetti for the Ministry of Communications (Fiechter, 1972). Embratel’s presidents during the state age, since its creation, were, in chronological order: Iberê Gilson, Haroldo Mattos, Helvécio Gilson, Pedro Jorge Castelo Branco, Jose Eugênio Guisard Ferraz and Carlos Paiva Lopes. The Empresas Pólos were about 37, all over the Country, and agglutinated the over 800 existing phone companies before 1967. The administration of those companies was left in the hands of the state government, in most of the states. Telebrás was responsible for the national planning of communications, as well as R&D area. The creation of the Centro de Pesquisa e Desenvolvimento (CPqD) of Telebrás frustrated, in a way, the financer’s expectations of the Coup of 64. Instead of receiving the fiber optic links ”free of charge” at the time, the government preferred to invest in its development and reap the profits of the investment five years later. Brazil had as one of its governmental policies, until the 80’s, the production of telecommunications equipment in the country. The family of public digital stations Trópico was completely specified, planned and developed in Brazil, by Telebrás’s Centro de Pesquisa e Desenvolvimento (CPqD), a center for research and development, with the support of national companies and the Empresas Pólos. The CPqD, with 1.500 highly specialized professionals, became one of the most important R&D centers in the Country. In 1987, the Empresas Pólos made an order of over 1 million and two hundred thousand lines of Trópico equipment (Chapuis and Jr., 1990). The Trópico line included a user line concentrator, in production since 1983 (Trópico C), a small local station for 4.000 users and 800 trunked lines, in the market since 1985 (Trópico R) and a medium sized local exchange for 16 thousand 34CHAPTER 4. THE STATE AGE AND THE AUTONOMOUS DEVELOPMENT PROJECT DURING THE MILITARY REGIME

lines, in production since 1990 (Trópico RA). The Trópico L large local exchange for 80.000 lines, and the Trópico T, large long-distance exchange for 50.000 trunk circuits, both still in development (Chapuis and Jr., 1990). In the beginning of the 90’s, a joint venture formed by Promon and Alcatel took over the development and maintenance of the Trópico line, which detained 35% of the market. The 70’s, as can be noticed, has seen a huge growth in the communications sector. The Northeast trunk of Embratel was inaugurated in 1970, together with the serviço de discagem direta a` distância (DDD). Still in that year, Embratel takes over the telex and telegraph services, which were directed by the Empresa Brasileira de Correios e Telégrafos (EBCT). Embratel and the Companhia Telefônica Nacional da Espanha sign, in that same year, a deal for the implantation of a submarine cable connecting the two countries. The submarine cable BRACAN-1, with 160 voice channels, would be inaugurated in 1972, connecting Recife to the Canary Islands and Portugal (Barnes, 1977). Still in 1970, President Médici inaugurates six new Embratel microwave trunks and calls the six capitals: Florianópolis, Curitiba, São Paulo, Rio de Janeiro, Belo Horizonte and Salvador. The minister for Communications, Hygin Corsetti, VicePresident Augusto Rademaker and the Governor of Guanabara, Negrão de Lima, inaugurate the sistema de discagem direta a` disâtncia (DDD) between São Paulo, Rio de Janeiro and Porto Alegre. In the same year Curitiba and Belo Horizonte are integrated to the system. The Secretaria de Imprensa da Presidência da República divulges a decree to repeal the television channels TV Excelsior (SP) and TV Excelsior Rio (GB), after the imprisonment of it’s biggest stockholder, the Deputy Dorival Masci de Abreu, who had acquired the stock in his wife’s name (Monteiro, 1991). Beginning in 1970, due to the incentives given by Sudene and Sudam, governement agencies responsible for the development of the Northeast and North regions of Brazil, some companies in the area of communications and electronics started to deploy in the North and Northeast of the Country. Manaus especially attracts the light calculator, radio and television industries. Pernambuco receives Philips, which would originate Sul-América Teleinformática, General Electric and Microlite (Dickenson, 1978). The 70’s would also presence the closing of the only television factory in the North and Northeast, the ABC from Recife. The distribution plan for medium wave radio channels in the North region is approved in 1971. The DDD system is inaugurated between Manaus and Belém. The Telefônica da Bahia (Telebahia) signs the largest telecommunications contract of South America with the Oki-Mitsubishi society, of Japan. It would install the 4.1. THE MILITARY REGIME AND COMMUNICATIONS IN BRAZIL

35

DDD in 59 counties of Bahia (Monteiro, 1991). Brazilian television made its first color transmission in 1972, by means of the TV Difusora of Porto Alegre. The Festa da Uva, of Caxias do Sul, was the first public color TV transmission. Blota Junior was the master of ceremonies of the event, exclaiming, without much intimacy with the new standard: ”Aqui, onde estou, no sol, a cor fica mais cor” (Novaes, 1994). Around that time São Paulo dominated the communications and electronics production sectors, with 66% of the primary sector workforce and 77% of the secondary workforce (Dickenson, 1978). Mato Grosso is connected to the Sistema Nacional de Telecomunicaço˜ es (SNT), with the inauguration of Embratel’s microwave trunk in the same year.

4.2

Telebrás is Created in the Decade of the Miracle

Starts in Recife, at the beach of Boa Viagem, the launching of the Brazil-Canary (BRACAN-1) submarine cable, which would connect Brazil to Europe. Brazil connects to Bolivia by means of short-range waves, as part of a cooperation deal. Still in that year, Telebrás is created, with an initial capital of Cr$ 5 billion, and Euclides Quandt de Oliveira is empowered as president of the company. In May of 1972, the Ministry of Communications decided to designate one telephone exchange for each state, the Empresas Pólos, which would absorb the existing companies. The CTB was dismembered into two companies: the Telecomunicaço˜ es de São Paulo S.A. (Telesp) and the Rio de Janeiro exchange, which maintained the name CTB until 1976, when it started being called Telecomunicaço˜ es do Rio de Janeiro S.A. (Telerj). Embratel is transformed into a mixed economy society. The Rádio Nacional initiates transmissions in Spanish, English and Portuguese to the foreign (Monteiro, 1991). The distribution of the phone net reflected the regional disparities: two thirds of all the phones in the Country were allocated to the Southeastern Region (Henshall and Jr., 1974). The II Plano Nacional de Desenvolvimento, 1975-1979, proposed the addition of 5,3 million new phones during its state of being in force. That ended up acting as a stimulant for the multinationals in the area of communications, which had initiated or expanded their production capacity since 1960. Within those were included Plessey, Ericsson and Philips in São Paulo and Standard Electric in Rio de Janeiro. The mass communication industry also expanded, with the growth of radio and television. In 1975, the Country had over 900 radio stations and 64 television 36CHAPTER 4. THE STATE AGE AND THE AUTONOMOUS DEVELOPMENT PROJECT DURING THE MILITARY REGIME

stations. The sales of transistorized radios were around 2,6 million and the television sets reached 1,6 million per year (Dickenson, 1978). Television had grown incredibly fast as a vehicle for the masses. Over 50% of all the money spent in publicity in the Country was already destined for television, compared with the less than 25% dispended in 1962. With that, Brazil was becoming an assured consumer market for publicity, with nothing less than 15 agencies, and was the ninth biggest importer for American films in the World (C. Neotti, Editor, 1980). The Rede Tupi had launched the first nation-wide program in 1974, followed shortly after by Rede Globo. Five years later Brazil would be astonished by the purchase of Light for over a billion dollars. And so ended, in a scandalous manner, almost a century of foreign exploitation of the public services in Brazil, with the possible connivance of several Brazilian personalities, like Otávio Gouveia de Bulhões, Rafael de Almeida Magalhães, Roberto Campos and Antonio Gallotti. Roberto Campos and Otávio Bulhões’s group had already reevaluated Lights actives after the Coup of 64, when the elevation of the rates was conceived and its automatic correction to the company. Those assets were now converting into passives for the nation, because Light’s concessions for Rio and São Paulo would end, respectively in 1990 and 1981. The expiration of the concessions would imply in the total delivery of the installments, as in the 80 years of exploitation of services in the Country, Light had annually remitted the amortization taxes on the investment, besides the profits. Since 1975 Light had been preparing for the sale of its subsidiaries. Initially with the rise of the company’s external debt, which went from less than 400 million dollars to something around 800 million dollars in four years, culminating with the overvaluation of the company’s stock, which went from 3 dollars to 12 dollars a share, at the time. That way the Brazilian government would assume Brascan for 436 million dollars and received a debt of 778,6 million dollars with the international banks. It is known that Brascan only sold 83% of the stock belonging to the original owners. The remaining, as Darcy Ribeiro states, must have been divided among the directors, politicians and lawyers in the form of tips and bribes. It is also stated that Antonio Gallotti celebrated the shady transaction at Antonio’s, bragging about his 39 million dollar profit from the transaction, which corresponds to the brokerage fee charged for the deal (Ribeiro, 1985). Brazil became a huge consumer of crossbar phone stations, produced in Sweden by Ericsson. In 1978, the Country was the second biggest consumer of those centrals, with 2 million local lines installed (ARF or ARK centrals) and 159.000 long-distance or international circuits (ARM centrals), only supplanted by Aus´ IS CREATED IN THE DECADE OF THE MIRACLE 4.2. TELEBRAS

37

tralia (Chapuis, 1982). The radio devices, which were less than 500 in 1920, reach the mark of 50 million in 1980, for a population of 119 million inhabitants. The foreign capital, which dominated the electric energy and telephony public services, starts to concentrate on the capital goods industry, in mining, in banks and food production. A business that reached the mark of 17,7 billion dollars of accumulated capital, for an investment of 1,4 billion dollars between 1960 and 1980 (Ribeiro, 1985). The 90’s would see the return of the foreign interest for public communications services. The TV Tupi is suspended for thirty days, by resolution of the Minister for Communications, Haroldo Correia de Mattos, in 1980. Shortly after, the government takes away the grants given to seven of the nine stations of the condominium of the Diários Associados. Some of them were filing chapter eleven. The government opens competition for the exploitation of the TV channels belonging to Tupi, plus three channels in São Paulo and nine in Rio de Janeiro. The general-secretary for the Minister for Communications, Rômulo Villar Furtado, opens up to proposals from the competing groups and announces the winners: the Bloch and S´ılvio Santos Groups (Monteiro, 1991). The growth of the number of telephones in Brazil in the 60’s, 70’s and 80’s indicates the success obtained with the planning policy for the sector in that period. In 1950, Brazil had 550 thousand telephones, a number that practically doubled to 1 million and 25 thousand in the following decade. In 1970, there was a new duplication of the installed capacity to little over 2 million terminals. The 80’s showed an even larger increment of 7 million and 500 thousand telephones, and a total of 10 million and 800 thousand telephones installed at the end of the decade (Pachajoa-Burbano, 1991). Brazil is still the country with the largest number of telephones in Latin America. As mentioned, Brazil was one of the first signatories of the Consórcio Internacional de Comunicaço˜ es por Satélite (Intelsat), in 1965, and has four international earth stations, controlled by Embratel. Besides that, there are terrestrial connections to Uruguay, Paraguay and Argentina, and three submarine cables connecting Brazil to the United States, Africa and Europe. The submarine cable Atlantis was inaugurated in 1982, connecting Recife to Dakar and Portugal. It has an installed capacity of 1.380 telephonic circuits (Chapuis and Jr., 1990). The actual amount of Embratel’s personnel is around 12.000 employees since 1984 (Alencar, 1989), the average price of the services is 58,2% of the price in 1981 and the average annual productivity is approximately 2% (Ferraz, 1988). The creation of the Sociedade Brasileira de Telecomunicaço˜ es (SBrT), the 38CHAPTER 4. THE STATE AGE AND THE AUTONOMOUS DEVELOPMENT PROJECT DURING THE MILITARY REGIME

Brazilian Telecomunications Society, and the Sociedade Brasileira de Microondas e Optoeletrônica (SBMO), the Brazilian Microwave and Optoelectronics Society, at the beginning of the 80’s, encouraged the publishing of communications research in the Country. Their promotions, the Simpósio Brasileiro de Telecomunicaço˜ es and the Simpósio Brasileiro de Microondas e Optoeletrônica, are forums of reference for the professionals of the sector (Alencar, 1991). The SBMO was founded in 1982, promoting in a two-year interval, in an intercalated manner, it’s National and International Symposiums. Nowadays it has 300 associates and organizes one of the four most important conferences in the area (Consoni, 1991). The SBrT was created one year later and already has more than 500 associates, and is also a Sister Society to IEEE. Promotes an international symposium each four years and a national symposium annually.

4.3

The Sarney Government and the First Symptoms - A Doctor at the Ministry of Communications

The Sarney government suspends, in 1985, over 100 concessions and permissions for radio and television stations, signed by the President Figueiredo. Roberto Marinho, president of the Organizaço˜ es Globo, signs in Paris a contract that makes him the major shareholder of the TV Internacional do Principiado de Mônaco, which operates Tele Montecarlo. The Telestrada system is inaugurated by the President José Sarney, connecting the national truck fleet to Country’s phone net. João Havelange and the Grupo Jornal do Brasil acquire S´ılvio Santos’s part of TV Record (Monteiro, 1991). The number of television sets in the Country already reached the mark of 36 million, or the average of one set for each four people. The number of radios was more or less parked at a few less than 59 million, which equaled one radio for each 2,5 people (Benton, 1991). In 1988, Rio de Janeiro hosted the first Fórum e Exibiça˜ o Internacional (TELECOM 88), International Exhibition and Forum, of the ITU in Latin America. The International Telecommunications Union (ITU) has its headquarters in Geneva, and is the oldest intergovernmental organization, founded in 1865. In 1947, ITU became a specialized agency of the United Nations, responsible for the regulation and planning of telecommunications in the whole world, and nowadays has 164 member countries (Dahl-Hansen, 1991). 4.3. THE SARNEY GOVERNMENT AND THE FIRST SYMPTOMS - A DOCTOR AT THE MINISTRY OF COMMUNICATIONS

39

What occurred to the Brazilian communications sector, in the 90’s, was the fruit of a long work of dismount that dates back to 1982, when the FNT was extinct under heavy fire from the contributor. It was known, since a long time, that the Fund was not being applied in the development of communications - it only served the purpose of reinforcing the treasury’s teller, which reinforced the teller of the creditor banks. It was the work of the former Minister Delfim Netto. This process of liquidation of the system was diligently continued by Antônio Carlos Magalhães, who assumed the Ministry of Communications during José Sarney’s period as President, and quickly found a way to profit with the system (Augusto, 1993). It did not take him too long. He associated himself to Roberto Marinho, in an attempt to take over the sector. At the time Globo desired an electronic branch, and NEC was waiting for an order of 2,000 telephone exchanges from Telebrás. What was expected happened, the Minister pressured Mario Garnero, president of NEC at the time, until he sold the company to Roberto Marinho, after being suffocated and sued. Globo was not starting so bad, with a firm already set up, with an enormous order and acquired at the price of a clearance sale. It is interesting to remind that Antônio Carlos Magalhães is associated to Roberto Marinho in another area - in a TV channel concession (TV-Aratu) that transmits Rede Globo programs in Bahia (Alencar, 1990). With the retail sector taken care of, only wholesale remained. Roberto Marinho soon creates a company, the Victori Internacional Engenharia de Telecomunicaço˜ es (Vicom). This company would have free pass from the Ministry to penetrate the Embratel monopoly and divide the profits in the sector. Bradesco, a major private bank, also had an interest in the deal, this way, together with Vicom they propose to the Ministry of Communications the cession of some transponders from Brasilsat to Vicom, so that the company could exploit the data communications services - which would soon become the biggest source of profit in the system. Embratel’s board of directors, with the exception of it’s president, revolted against the proposal, which did not comply with the law 4117, and was fired by the Minister, which preserved only his political protégé Chagas Freitas. With the whole company contrary to the deal, which had already been signed by the Minister, the proposal did not make it. But Antônio Carlos Magalhães and Roberto Marinho did not give up. Vicom quickly took action and signed a contract with SPAR, a Canadian firm, which was partner to Hughes when launching Brasilsat 1 and now was its competitor, for the launching of Brasilsat 3. It is widely known that satellites have an average life 40CHAPTER 4. THE STATE AGE AND THE AUTONOMOUS DEVELOPMENT PROJECT DURING THE MILITARY REGIME

of approximately eight years, and have to be substituted regularly. The combined technical committee of Embratel and Telebrás that analyzed the proposals, recommended the purchase of the Hughes satellite, which cost 80 millions dollars less than SPAR’s, but the Minister refused to accept the committee’s recommendations. It is worth mentioning that the television stations gathered their capital at the costs of the telephone users. That is due to the fact that the price of a one-minute transmission on TV represents, historically, only 10% of the value of the telephony minute! And the television stations gain a real fortune, while the phone user just pays. A specialized publication presented, in 1991, data that can give us an idea of the economic indicators in the communications sector in Brazil, before the privatization. The information refers to the exercise of 1990 (Kanitz, 1991) (Mario Watanabe, Editor, 1991a). The total profit of the 115 biggest open-capital companies went down by 85% since 1989. Telebrás’s liquid profit in 1990 was of US$ 1.6 billion, something around 82% higher than the amount verified in 1989, for the system’s total billing of US$ 4,5 billion. Among the 500 largest private capital companies, only 71 presented a real increase in sales (255 in 1989). Of 500, 171 ran in the red (70 in 1989). Amongst the 50 biggest state owned companies, 24 had a rise in sales in 1990. Comparing the 20 largest profiting companies, between private and state owned, were Embratel (fourth place), Telesp (ninth place), Telerj (12) and Telepar (19), all of them belonging to the Telebrás Group. Considering the 50 biggest state owned companies, only 18 profited, and 5 of these were from the Telebrás system. The companies of the Telebrás system had a 32% average debt rate, while the state owned companies had a 60% debt rate. Amongst the 20 biggest companies in the public services sector, only 6 showed a profit margin, of which 3 belonged to the Telebrás system. Those 3 represented 98% of the sector’s total profit. 4.3. THE SARNEY GOVERNMENT AND THE FIRST SYMPTOMS - A DOCTOR AT THE MINISTRY OF COMMUNICATIONS

41

Another perspective can be perceived, comparing the previously mentioned data with the information contained in Telebrás’s reports and specialized economy magazines (Mario Watanabe, Editor, 1991a). That data compares the accumulated from January to July of 1990 with the same months of 1991 (Carvalho, 1991). The repressed demand for terminals had reached around 2 million, with a total number of telephones sold and not installed that oscillated around 984.000. Telebrás’s objective was to install 700.000 new telephones in 1991, investing US$ 2 billion proceeding from the system’s billing. The government’s aim towards Telebrás was to lower the installation cost of a US$ 5,680.00, terminal in 1990, to US$ 3,000.00 until the end of 1991. There was an Embratel study foreseeing the need of expansion of the net in 10 million terminals until the end of the century. A good part of the profit obtained by Embratel in 1990, something around US$ 245 million, was being channeled to Telesp, which was suffering and administrative crisis, because of political motives. Embratel was being obliged to invest US$ 220 million in Telesp. The investments in the sector should receive annual increments of 1 billion dollars. The expenses went from 58% to 63% of the income. The income had a 11% decrease and the expenses had a 3% decrease (reducing the inflation rate by the average IGP-DI), basically the fruit of the readjustment of rates below the inflation. The traffic increased 9,38% in registered pulses and 15,20 in completed long distance calls. Although the exploration expenses had decreased only 2,63%, the personnel expenses (which are a part of it), decreased 42,06% in real terms (IGP-DI). The staff was reduced in 3.259 employees between July of 1990 and July of 1991. 42CHAPTER 4. THE STATE AGE AND THE AUTONOMOUS DEVELOPMENT PROJECT DURING THE MILITARY REGIME

The number of terminals installed per employee went from 96,83 to 103,45 in the same period. The market value of the Telebrás system’s stock options corresponded to only 25% of it’s patrimonial value. Since the Comissão de Valores Mobiliários (CVM) authorized the presence of foreign institutional investors at the stock exchange, US$ 38 million were received this way, Telebrás PN being the main target. Telebrás made a public offer of US$ 200 million in commercial papers in stock exchanges of USA, Europe and Japan, following a well succeeded experience by Petrobras in the United States. In the 1990/1991 period, the physical productivity increased 13,29% (pulses/employees) and 21,53% financially (variation of the real exploration income/ variation of the number of employees). As implied, at the time, the Minister for Infrastructure, Joao Santana, the government, which should have invested 3,3 billion dollars in telecommunications in the year of 1991, invested only 2,3 billion. The first figure would have been the required minimum to accomplish the most important projects (Joao Santana, 1991).

4.4

The Contemporary Communications Scenario

The objective of the Collor government, achieved only during the Cardoso era, was to auction the Country’s communications system. The Brazilian contributor had already done his part with the costs and setting up the system, now it was up to foreign companies to reap the profits of the deal. Aided by the London Financial Times, the foreign companies were avid to penetrate the Brazilian communications market, which was considered the fillet-mignon amongst the public companies in the Country (Griffith, 1991). Actually, the Collor government tried to find loopholes in the Constitution, which did not permit the privatization of the public services. In the case of mobile telephony, the way that was found was to not consider the mobile telephones part of the public telephonic net. As mentioned in the referred article, the government intended to offer management contracts for the entire telephony system. Later on, during the Itamar Franco 4.4. THE CONTEMPORARY COMMUNICATIONS SCENARIO

43

period, the minister Hugo Napoleão continued to defend the end of the telecommunications monopoly. He wanted the Union to continue regulating the sector, and the state owned companies preserved for services that did not show gains for the private initiative. Curious reasoning - to say the least (Almeida, 1993) Some national groups encountered multinational partners to control the sector in the 90’s. The first was led by Globo, which controlled NEC in Brazil. This partnership still includes the Grupo Monteiro Aranha, which has the most of Ericsson’s stock options in Brazil, besides Camargo Correia and Bradesco. The Italian group STET should have provided the technology for the partnership. The Safra and Arbi financial companies, along with Rede Brasil-Sul Comunicaço˜ es (RBS), were associated to the American BellSouth, the biggest mobile telephony exchange in the world. The Machline Group led the third firm partnership, in association with the American Telegraph and Telephone Company (AT&T), which was already on the move to install the submarine optic cables in Brazil, besides Ameritech. Actually, AT&T Paradyne, AT&T’s subsidiary in the data communications area, and Moddata S.A Engenharia already announced their intention of forming a joint venture. The AT&T Moddata Telecomunicaço˜ es e Informática would be created with 51% of national capital and the remaining belonging to the foreign company. The company would commence its operations in 1992 and would have its headquarters in Bras´ılia. Wrapping it up, Villares partnered with Motorola and Unibanco to act in the cellular telephony sector. Other multinationals of the sector were also mobilized to enter that market: Alcatel of France, Novatel and Northern Telecom of Canada, besides Cable and Wireless of England. Northern Telecom, particularly, was associating to Promon for the installation of cellular telephonic nets. Nothing less than sixteen Brazilian states opened competing companies for the implantation of mobile telephony systems in 1992. The installation of mobile telephony systems in seven of Brazil’s largest cities had become the most nervous competition at the time, because it involved resources in the class of 2 billion dollars. A State governor was informed by one of the possible competitors that the commission that would be paid to conclude the transaction ascended to 150 million dollars (Eur´ıpedes Alcântara, Editor, 1991). It is worth mentioning that smart actions by monopolist investors started to appear before the layman public in the Country. In 1992, the deputy Paulo Ramos (PDT-RJ) accused the ex-president of the Chamber of Representatives, Ibsen Pinheiro (PMDB-RS), of obstructing the request to form a Comissão Parlamentar de Inquérito (CPI) to investigate “The NEC Scandal”. From the Chamber tri44CHAPTER 4. THE STATE AGE AND THE AUTONOMOUS DEVELOPMENT PROJECT DURING THE MILITARY REGIME

bune, Ramos confirmed that Ibsen Pinheiro was submitted to “pressure from Dr. Roberto Marinho”, owner of the Organizaço˜ es Globo, which, in 1986, took over NEC, which belonged to Mario Garnero, owner of the Brasilinvest group. Garnero is questioning the contract in Justice, affirming that it is fraudulent. On June 27th of 1992, Ramos sent to the Board of the Chamber a petition with 270 signatures, asking for the instauration of the CPI, but Ibsen Pinheiro did not send it to be published. After that several deputies removed their signatures, ”due to exterior pressures, including the participation of a few governors, among them Iris Resende and Antônio Carlos Magalhães, and the ex-governors Tasso Jereissati and Orestes Quércia”. Ramos affirmed that Ibsen Pinheiro had gone against the regiment as he accepted the removal of the signatures. Ramos gathered new signatures, but Ibsen ”still procrastinated the decision”. Only after the list was recompiled, Ibsen Pinheiro sent it to be published. Ramos remembered the difficulties encountered by the CPI established in 1990, with the same objective. Another CPI, established in 1987, had already discovered irregularities in the transfer of control of NEC, at a null cost, to Roberto Marinho. The referred CPI also discovered the direct involvement of the Ministry of Communications and Telebrás. In the first phase the CPI had been requested by the deputy Brandão Monteiro (PDT-RJ) and it concluded that there had been a crime of illegal enrichment by part of Roberto Marinho and Miguel Pires Gonçalves, executive of the Organizaço˜ es Globo. The CPI also accused members of the Ministry of Communications and Telebrás of having sponsored the interests of the Japanese at the NEC Corporation, compelling companies and managers to beneficiate private interests (Ramos, 1991). As mentioned before, NEC, which had the control of the Mario Ganero’s Grupo Brasilinvest, was acquired by Roberto Marinho after a rioted incident involving Garnero and Antônio Carlos Magalhães. At the time, the Minister for Communications reached the point of saying he did not negotiate with thieves referring to the purchase proposal of 2000 centrals by the Telebrás system to NEC. Mario Garnero was, at his time, involved in a stock market scandal. The government, instead of promoting the bankruptcy of the State, has the obligation of providing basic social conditions for the citizens. For all the citizens. To permit the equitable distribution of the social gains, the government should foment economic activity where it is necessary. As the investments are a result of the collecting of the contributor’s taxes – it is up to the people or to the institutions that represent them to decide about their destination. The state owned companies belonged to the people. Society should 4.4. THE CONTEMPORARY COMMUNICATIONS SCENARIO

45

have heard about its destination. A lot of the contributor’s money was invested to create the Sistema Nacional de Telecomunicaço˜ es, so as in other sectors controlled by the government. It should be kept in mind that the essential is not what the government controls, but who controls the government. The privatization process, in South America, started with the communications system in Chile, with the Empresa Nacional de Telecomunicaço˜ es (ENTEL) of Argentina (Cahur, 1991a), and the Mexican company Teléfonos de Mexico (Cahur, 1991b). The system was worse in the beginning of the 90’s than it was in the beginning of the 70’s. It is possible to show why this happened. The communications systems, like the energy systems, are planned 10 years beforehand in Brazil. Each 10 years an evaluation is made and possibly an expansion. The Brazilian communications system had last gone through a great expansion in 1978. As a matter of fact, a good government cannot do much for a state owned company besides create it. But an incompetent government can easily destroy any company - being it state owned or private. Observing history, was what, apparently happened. The government wanted to demonstrate that it was right in privatizing the state owned companies (which can be interpreted as denationalization) and smothered them until they were unviable. What the arrival of Fernando A. Collor de Mello at the Presidency really meant was the crowning of the politics between USA and Latin America. The United States managed to “elect” practically all the presidents that were of its interest. The privatization policy that Collor tried to impose in the Country represented only an appendage of the North American economic policy. In relation to the communications sector, Collor’s objectives were obvious. His government wanted to remove the power that the governors had to suggest the presidents of the Empresas Pólos, and at the same time intended to break the corporative manner that characterizes the sector, to permit the bargaining of political level posts. This corporative manner had, successively, impeded the politicians of suggesting godsons for management posts in the system. Embratel, for instance, had a very rigid career system and reacted strongly to indications of the political type, for its staff. That caused uneasiness in the governmental hosts. The creation of seven regional macrocompanies, proposed by Collor, intended to break that body spirit in the system and weaken the governors. In an analysis of what the federal government had in store for the area of communications, three new companies were created with the fusion of the Empresas Pólos, having in view the weakening of the state governments that had the prerog46CHAPTER 4. THE STATE AGE AND THE AUTONOMOUS DEVELOPMENT PROJECT DURING THE MILITARY REGIME

ative of indicating the presidents of these companies. The absorption of the two companies was distinct. Embratel was in charge of the installation, operation and maintenance of the national telecommunications system, while Telebrás was responsible for the establishment of directives for the sector, besides research and development in that area. That incorporation appeared to have only one objective: Weaken both companies to favor their sale to some interested multinational. These political decisions made on a federal level affected profoundly the sector, and in one way or another, would mark the boundaries for the system during the next years. Evidently, the private sector has stuck its feet in the ground when it comes to a decision in the national communications sector. Sul América Teleinformática, electronic branch of the insurance company, formally separated from Philips in the beginning of the 80’s. It kept the production of small and medium sized exchanges, with Telebrás technology - despite maintaining a non-apparent connection to Philips headquarters in Holland, from which also received technology for exchanges. Philips kept the production of light bulbs and radiotransmission equipment. Telettra initially came to Brazil by means of their wave transmitting systems in high-tension lines (TET N1 and TETN2). One of their greatest clients, Chesf, still utilizes these systems to communicate between its departments, generator plants and substations. The transmission of data has been targeted by Globo and Bradesco since the beginning of the 80’s. The strategists of those companies have detected beforehand the area that would favor the largest profits for the system in the following years - and started to intermediate favors with the ministry of the New Republic. The Country had, in the beginning of the 90’s, two satellites functioning with 24 transponders each. The cession of these transponders was not made to Victori Communications (Vicom) by exclusive pressure of the Embratel staff. Anyway Teletrim, a Victori Group company, continued the expansion policy for the sector, closing a deal with the American company Skytel, for the transmission of paging-type messages. The strategy, which had an investment of US$ 1 million in 1994, as the president of the company, Jorge Brandão, had said, would have been to offer the largest national and international coverage among the companies that operate in Brazil (Antonio C. Prado, 1994). Promon, a project engineering company, also came into the telecommunications market with the perspective of obtaining in two years 70% of that sector’s earnings. In partnership with Método Engenharia, Promon was credentialed by the São Paulo and Santa Catarina governments to expand the telephonic nets in those 4.4. THE CONTEMPORARY COMMUNICATIONS SCENARIO

47

respective states. In view of the deal, the company released 11.500 telephones in São Paulo and 9.000 in Santa Catarina at the total cost of US$ 62,000.00 (Mario Watanabe, Editor, 1991b). The business had a minimal risk, seen as to BNDES had a special line of credit to finance telephonic expansions developed by the private sector. Soon, Paraná, Minas Gerais and Rio de Janeiro would put 280.000 terminals in the hands of the private initiative. Actually, the demand for telephones in the Country’s rural zone reached 80.000 terminals a year. Promon also acts in other sectors, like the providing of two satellites for Embratel in 1994 at the cost of US$ 180,000.00, in partnership with Hughes Network Systems. The new domestic satellites were built in California and presented the following characteristics: Potency of 36 dBW in the national circuit, extended C band operation (4/6 GHz) and X band (7/8 GHz), 28 transponders with 36 MHz in C band and one with 60 MHz in X band for each satellite (João C. B. Brandão, 1991). The Promon partnership with Hughes was extended to commercialization of small-sized earth stations, to tend to contracts with the banks Itaú and Real at the amount of US$ 80 million. Promon also partnered up with the Japanese company NTT to accomplish integration projects of services and data for PETROBRAS and for the Companhia Vale do Rio Doce, at an estimated total of US$ 4 million (Mario Watanabe, Editor, 1991b). The liberation of fiber optics imports in the 80’s compromised the communications sector. In part that was due to the disastrous policy that the Minster for Communications during the Sarney government, which bought all the fiber production during a year for Telebahia. The imports were foreseen since that time. It is worth remembering that the pressure from the multinationals so that Brazil did not develop its own optical communications technology comes from the 70’s. The Japanese company, NEC, offered to install, in 78, the fiber optic links in the South of the Country - in a frustrated attempt of aborting the research in the area. The optical communications sector is so important that, the USA practically finance all the research in the sector by means of the Ministry of Defense (DOD). The scientific works sent to magazines or conferences are censured by the militaries. In the 80’s, nothing less than 25% of these works were forbidden of being presented. For many years the USA maintained an embargo of optical components for countries with which they had disputes, as was the case of the former Soviet Union (Jurgen, 1990). In Brazil, things are going in the opposite direction. Despite detaining the technology for the fabrication of optic fibers, developed by Telebrás’s 48CHAPTER 4. THE STATE AGE AND THE AUTONOMOUS DEVELOPMENT PROJECT DURING THE MILITARY REGIME

CPqD, this strategic market continues unprotected. One of North America’s manias, the cable TV, did not reveal its importance to the Country for some time. At least not in its coaxial cable version. The Serviço Especial de Televisão por Assinatura (TVA), was authorized in 1988. In 1989, the President José Sarney signs decrees conceding four TVA channels for Rio de Janeiro. One of the channels was ceded to the entrepreneur Roberto Marinho and another to the entrepreneur Mathias Machline. That happened shortly after NEC, which belonged to Roberto Marinho, had won the competition against Mathias Machline’s SID. What was so strange about it was the fact that the amount that Globo’s president asked for the installation of 10.000 mobile telephony terminals in Rio de Janeiro was US$ 65 million, totally financed by the Japanese company Nisho Iwai. That sum exceeded Mathias Machline’s proposal in no less than US$ 40 million! Later on Mathias Machline received the concession to install mobile telephones in Sao Paulo. The emergency of fiber optics to the house of the user should alter this situation in relation to TVA. The Integrated Services Digital Network (ISDN) could change the way the user and the spectator see their respective medias. There is the expectation that ISDN will provide services for the phone users and more interaction for the spectator. Actually cable TV better developed in the USA because of the problem provoked by the reception of the NTSC signal (nicknamed “Never The Same Color”). That probably instilled a certain polarization towards cable TV in the USA, seen to as how the conventional TV signal, at its primordial state, suffered the loss of color synchronism. Brazil’s PAL-M system is an exact improvement of the NTSC (that explains why they are almost compatible), utilizing an inversion in the phase of the chrominance carrier. There is no saturation in the TV transmission market in Brazil, like in some cities in the USA. Cable transmission, in the 90’s, was justified only for direct reception of satellites by buildings – where the sector grew rapidly. Planning is a serious issue in communications and energy generation. Telebrás always chose to adopt the standards recommended by UIT-T and UIT-R (formerly known as CCITT and CCIR) – which guaranteed the interconnectivity between the systems. In relation to mobile telephony, the international standards were abandoned. Surely elevated prices had been one of the reasons for the small number of users at the beginning of the new mobile telephony service. Only 50 mobile telephones had been sold until the month of August of 1991 - despite the price being reduced from US$ 5,000.00 to US$ 3,500.00. 4.4. THE CONTEMPORARY COMMUNICATIONS SCENARIO

49

This situation changed, due to the urgency of the deployment of new terminals in those centers. The mobile telephone started being purchased not as a means of giving mobility to the user, but as a substitute for the conventional telephone. That implies that the Country skipped one of the process’s stages, going directly to a cellular net, without having completed the conventional system’s expansion. Anyhow, the dispute in the cellular telephony market caused a decrease of over 70% in the prices throughout the last few years between 1990 and 1993. São Paulo’s system inaugurated in August 6th 1993, cost US$ 1,246.00 per user. Rio paid US$ 6,300.00 at the end of 1990. NEC has 57% of the contracts signed in 15 states. The market was estimated in US$ 1,5 billion (equipment) and US$ 800 million (appliances) until 1995. With the end of the Collor period, several knaveries were being revealed in relation with the national communications system, including the interference in the bids for the exploration of the cellular telephony services in several states, especially Sao Paulo (de Mello, 1993). Leopoldo Collor de Mello, as his brother Pedro Collor de Mello declared, had a lot of influence at the Companhia Telefônica de São Paulo, Telesp. Some service companies, which worked with that Empresa Pólo, would submit their budgets to Leopoldo - before presenting them to Telesp. Still, as Pedro Collor de Mello has declared, his brother examined the projects case by case, overpricing certain items and giving them back to the service company with the addition of his fee. It was then that the companies started presenting their proposals to Telesp’s board of directors (de Mello, 1993). But Leopoldo Collor de Mello, the president’s older brother’s activities did not end there. According to Pedro Collor de Mello, during the Oswaldo Nascimento administration, president of Telesp indicated by Leopoldo, the responsible for the payment to suppliers, known by the nickname Dr. Para´ıso, informed Leopoldo’s group weekly about the Empresas Pólos’s payroll chronogram. Leopoldo’s operators visited those suppliers, always before the invoice was due, to charge fees that guaranteed the quittance of the money. It is known that the ABC group’s fiber optics factory, with headquarters in the Triângulo Mineiro, would have been one of the most extorted companies by the plan (de Mello, 1993). Leopoldo also actuated in the in Telesp’s insurance area, by means of the Top Life company, which held part of the company’s telephonic centrals. The insurance company’s fees would be ripped off, to guarantee preference for Top Life. In his book, Pedro Collor de Mello affirms that denunciations indicated that people from Leopoldo’s group controlled Telesp’s service operators. Such companies would have been responsible for the cleaning and conservation of the installations 50CHAPTER 4. THE STATE AGE AND THE AUTONOMOUS DEVELOPMENT PROJECT DURING THE MILITARY REGIME

and maintenance of Telesp’s patrimony. Another company actuated in the monitoring and installation of illegal telephones. Finally, there are signs of favoring to a local vehicle rental service, All Rent, registered at the commercial council of Embu-Guaçu. That company would have rented 700 Fiat vehicles to Telesp. From the time Oswaldo Nascimento was substituted by Marco Antonio Castello Branco at the presidency of Telesp, still under the influence of Leopoldo Collor de Mello, one of the group’s operators, known as Mr. White, made Castello Branco one of the associates to All Rent. Apparently Castello Branco intended to restrict Leopoldo’s influence at Telesp (de Mello, 1993).

4.5

Conclusions

The 90’s decade arrived with cheerful perspectives for the telecommunications sector and for economy in general, seen to as how the communications sector growth is intimately related to the Country’s economic development. The discovering of the correlation between the telephonic density and the Gross National Product (GNP) per capita was due to a German engineer, called A.G.W. Jipp, which published a book with that research in 1962 (Chapuis, 1982). The countries of Latin America invested over 100 billion dollars to install 85 million telephonic lines until the year 2000. In order to give the reader an insight into the situation, the global investment in telecommunications equipment in the year of 1986 was of US$ 84,425.6 million. Starting at 32,1 billion dollars invested in the year of 1990, Latin America reached 59,1 billion in 1995 for services and equipment. That minimum level of capital inversion was necessary to support the economic and social growth in South America - having in view the correlation between the industrial expansion and the growth of the communications sector.

4.5. CONCLUSIONS

51

52CHAPTER 4. THE STATE AGE AND THE AUTONOMOUS DEVELOPMENT PROJECT DURING THE MILITARY REGIME

Chapter 5 Privatization and the Current State of the Market – Liberalism is Back 5.1

Introduction

In 1879, only three years after Bell invented the telephone, Emperor Dom Pedro II inaugurated the first telephone exchange in Brazil. Since then, most of the country’s telecommunication infrastructure has been kept in private hands. Recently, in 1972, the government created a holding company, Telebrás, to build a completely new telecommunication network from the debris of a deteriorated private owned system. In July 1997 the Brazilian government adopted the General Telecommunications Law which established a new regulatory framework and initiated the process of deregulation of the state telecommunications holding company Telebrás. An independent regulatory body called Agência Nacional de Telecomunicaçoes (Anatel), the Brazilian Telecommunications Agency, equivalent to FCC in the United States, was created to implement the changes outlined in the General Law. On 22 May 1998 the 28 subsidiaries of the monopoly-holding Telebrás System were restructured into twelve companies. This created eight regional cellular operators, three fixed line companies plus a long-distance and international operator Embratel. On 29 July 1998 the government’s shareholdings in the twelve companies were auctioned off, raising a total of US$ 19 billion. Following the sale, Anatel announced that it would be issuing four mirror concessions (licences) to act as competitors to the four fixed line operators. The first two mirror licenses went to competitive tender in 1998, and a third was awarded

inApril 1999. The final mirror, having failed to attract bids in earlier auctions. In July 1999 Embratel and its mirror, Bonari, were authorized to provide intraregional long-distance services in competition with the local operators and their mirrors. The local operators, however, will not be allowed to offer inter-regional or international services until 2002 at the earliest. At that date it is anticipated that the fixed line telephony market will be opened to full competition with the licensing of a number of new operators. This chapter discusses the impact of globalization on the Brazilian telecommunication market, the regulatory framework that has been built to deal with such impact and the role of the principal players, taking into account the economic issues involved.

5.2

Telephony Market Overview

In the last decade the developing countries were hit by the urgent ”need” to restructure their telecommunications sector. This wave of changes was a consequence of the fierce market competition already in place in the rich countries, driving the capitalists to explore new markets with high profit margins and zero competition: the telecommunications monopolies in the Third World. Absorbed by the worldwide movement of openings and deregulations, Brazil started its restructuring process in July 1997 when the Government adopted the new telecommunications law “Lei Geral das Telecomunicaço˜ es” No. 9472/97. Under the new regimen the regulator body Anatel (Agência Nacional de Telecomunicaço˜ es) was created and the set the rules that would guide the privatization of the nationwide state owned Telebras and the opening process to market competition were defined. Trying to legitimate the whole idea of privatization and deregulation, the Government committed in investing the accumulated resources earned from the telecommunications sector sale on education, health care and welfare, and also to implement the concept of telecommunications services available to everyone in anywhere, internationally known as ”Universal Telecommunications Service”. Checking the recent news one realizes that the monopoly is over, Telebrás and its group of 28 subsidiary companies were completely sold and the mirror companies are already in operation. So far, the only things missing are the social benefits announced and granted by the privatization supporters. It is in time though to question, ”Where did the money from the privatization go?” In order to 54

CHAPTER 5. PRIVATIZATION AND THE CURRENT STATE OF THE MARKET – LIBERALISM IS BACK

figure out how much money is at stake, one can recall the whole deregulation and privatization process in Brazil. Telebrás’ spin off, happened in May 1998. The 28 subsidiaries were reorganized in 12 companies: 8 cellular operators (Band-A), 3 fixed access companies (local/regional Incumbent Telcos) and a long-distance and international operator (former Embratel). Each one of the companies is facing competition from their respective Mirror companies. The Government has got money from auctioning both Incumbent Telcos (operation license, equipment plant, office facilities, etc.) and Mirror licenses (operation license). Due to the obvious advantage of the Incumbents over the Mirrors, the Government imposed some market protection in order to increase the market value of the Mirror licenses. Regarding that “protection”, one may say that Brazil kept some restrictions to new competition that favors the companies already in place. They had until the end of 2001 to consolidate their business in a duopoly, or oligopoly environment. The licenses expire in 2005, but can be renewed for the following 20 years. Fixed access operators will not have to pay a license fee until 2005, after that, every two years, they will pay a license fee that is 2% of the annual revenues.

5.3 5.3.1

Auctioning Process Band B – Licences Auction

The selling process started with the Band-B licenses auction, the whole country was divided into 10 operational areas. BCP (BellSouth International, Banco Safra, OESP, Splice e RBS) consortium acquired Area 1 (SãoPaulo city metropolitan region) for the final price of US$ 757 millions (US$ 1.00 = 3.5 R$, February 2003). Area 2 (country side of São Paulo state) was bought by Tess Consortium (Telia, Eriline, Primave, CR Almeida), which paid US$ 378 millions for it. Algar Lightel Consortium (Algar, Korea Mobili Telecom, Construtora Queiroz Galvão) bought Area 3 (Rio de Janeiro and Espirito Santo), paying the total amount of US$ 431 miliions. Vicunha Consortium (UBG- União Globo Bradesco, Grupo Vicunha, Telecom Italia-Stet) paid US$ 148.5 millions for Area 4 (Minas Gerais). Area 5 (Paraná and Santa Catarina) reached the final price of US$ 221 millions, it was taken by Global Telecom (Suzano, Inepar, Motorola, Nisho Iwai and DDI). The amount of US$ 95.57 millions was paid for Area 6 (Rio Grande do Sul) 5.3. AUCTIONING PROCESS

55

by Telet Consortium (Pension Funds Previ, Petros, Aeros, Sistel, Telos, Fachesf and Funcef, Citibank, Opportunity, La Fonte, Banco do Brasil Investimentos, Bell Canada and Telesystem). Area 7 (Goiais, Tocantins, Distrito Federal, Mato Grosso, Mato Grosso do Sul, Rondônia and Acre) was bought by Americel Consortium (Telesystem, Bell Canada, Pension Funds) that paid US$ 96.71 millions. Area 8 (Amazonas, Pará, Roraima, Amapá and Maranhão) did not get any bid in the first auction. Vicunha Consortium (UBG- União Globo Bradesco, Grupo Vicunha, Telecom Italia-Stet) has got also the Area 9 (Bahia and Sergipe) for US$ 71.43 millions. It is impressing how Vicunha Corporation, headed by Benjamin Steinbruck, which took over Vale do Rio Doce company (one of the biggest Brazilian companies) and is so aggressive in the telecommunications market too. The group became, in less than a decade, suddenly one of the biggest national corporations. Finally, the Area 10 (Alagoas, Pernambuco, Para´ıba, Rio Grande do Norte, Ceará and Fortaleza) was acquired by BSE (BellSouth International, Banco Safra, OESP and Splice) for US$ 158.71 millions. Initially, the Telecommunications Law forbid a consortium to buy more than one operation license. BCP Consortium easily worked around this limiting issue choosing a differentname for the Consortium that bought Area 10, BSE. It is supposed that the Government did not notice this maneuver, even knowing that the investors were all the same! Nowadays, BCP Nordeste (former BSE) has a subscriber base of 400 thousand users.

5.3.2 Fixed Access Auction The fixed access companies were grouped by the Government in three regions: North-East, Center-South and São Paulo State. The Telebrás group owned around 91% of the total number of telephone lines in Brazil at the end of 1997, the remaining lines belonged to other independent operators in the country: Rio Grande do Sul state owned company CRT, two municipally owned companies, Sercomtel (Paraná) and Ceterp (São Paulo), and a privately owned company CTBC (Minas Gerais). Tele Norte Leste, called Telemar after privatization, was created to manage the North-East region that goes from Rio de Janeiro to Amazonas, with a total of 16 states and population of 86 millions inhabitants. It was bought by the consortium composed of Andrade Gutierrez, Inepar, La Fonte, Aliança Brasil, Brasil Ve´ıculos Seguros e Macal that paid US$ 981.14 millions. The minimum stated price was US$ 971.43 millions. None of the companies in the consortium has experience in providing telecom services. 56


Tele Centro Sul was formed in the Center-South region that covers Santa Catarina, Paraná, Mato Grosso do Sul, Mato Grosso, Goiais e o Distrito Federal de Bras´ılia, Acre e Rondônia states with a total of 27 millions inhabitants. Tele Centro Sul was acquired by Solpart consortium, composed by Italia Telecom, Opportunity and pension funds such as, Previ-Banco do Brasil, Petros- Petrobras,TelosEmbratel, Funcef- Caixa Econômica Federal, Sistel- Telebrás e Fundaça˜ o Cesp. Although the market value of Tele Centro Sul was around US$ 2.86 billions, it was sold for US$ 591.14 millions. The minimum price stated by the Government was US$ 545.71 millions. Solpart consortium had been created only 16 days before the auction with only US$ 285.71 in assets, however it managed to obtain a financial guarantee letter from Banco do Brasil of US$ 228.57 millions and it was supported by Techold Participaço˜ es (a company with only US$ 5,715 in assets) in terms of operation expertise. São Paulo’s operator, Telesp, was taken by Telefonica, RBS, Iberdrola, Banco Bilbao Viscaya and Portugal Telecom, for the price of US$ 1.65 billion that was 64,29% above the minimum price of US$ 1 billion. In 1999 Telesp had annual revenues of US$ 1.29 billion, a net profit of US$ 197 millions and assets valued at US$ 2.71 billions, composing a total amount that is almost twice what the Government has got from the sale. The consortium formed by Tisa, CTC (Chile), Telefonica-Argentina, RBS and Citicorp bought 35% of the CRT’stocks for US$ 194.29 millions.

5.3.3

Band A – Cellular Companies Auction

Before the spin off, Telebrás’ local operators had the license to operate in the cellular band A spectrum of frequencies. In the new organization, those companies, also called Empresas Pólos, were grouped together in a similar way as had been done for the band B auction. However, in the band A case, the companies (including subscriber base, offices facilities, equipment plant, infrastructure, etc.) were also auctioned, in addition tothe operation licenses. Telesp Celular, covering areas 1 and 2 (whole São Paulo state), was acquired by Portugal Telecom for the amount of US$ 1.025 billion that was 226,18% above the minimum price of US$ 314.28 established by the Government. Currently, the company had, at the time of acquisition, a subscriber base of 2,4 millions users, operational revenues above US$ 571 millions and profit, after tax, of US$ 31.4 millions. Tele Sudeste Celular was the company operating Area 3. It had a minimum established price of US$ 162.85 millions, but it was sold for US$ 388.57 millions (138,6% above the minimum) to Telefonica International, Iberdrola, NTT 5.3. AUCTIONING PROCESS

57

Mobile and Itoshu Corp. Telesystem International wireless, Opportunity and Pension funds bought Telemig Cellular covering area 4. They paid US$ 216 millions, that was 228,7% above the minimum (US$ 65.71 millions). Tele Celular Sul, area 5 with 14 millions inhabitants, was taken by Globopar, Bradesco and Telecom Italia for US$ 200 millions. The minimum price was US$ 65.71 millions. Area 6, whose operating company didn’t belonged to the Federal Government, was out of the band A auction. Tele Centro-Oeste Celular covering area 7 was acquired by Splice for US$ 35.71 millions, a value that was 242,4% above the minimum, US$ 35.71 millions. Tele Norte Celular, in the area 8, had a minimum price of US$ 25.71 millions. It was bought by Telesystem International Wireless, Opportunity and pension funds for US$ 53.71 millions. It is impressive how the Opportunity bank has been successful in the auctions. Tele Leste Celular, area 9, was taken by Iberdrola and Telefonica for US$ 122.29 millions. This price was 242,4% above the minimum, US$ 35.71 millions. Globopar, Bradesco and Telecom Italia bought Tele Nordeste Celular, covering Area 10. The minimum price was US$ 64.29 millions, but it was acquired for US$188.57 millions.

5.3.4 Long-distance and International Company’s Auction Following the same scheme used for the cellular and fixed access operators, the Federal Government defined the new rules for the long distance and international operators, incumbent (former Embratel) and mirror. MCI bought Embratel for US$ 757.14 millions. Later on MCI was acquired by WorldCom for the amount of US$ 53 billions, almost 70 times the price paid by MCI to acquire Embratel. In October 1999, MCI-WorldCom bought Sprint for US$ 129 billions, which owns 25% of Intelig, that happens to be the long distance and international mirror company. In this case, the same company MCI-WorldCom owned the two long distance and international operators, and the acquisition was barred by Anatel.

5.3.5 Mirror Companies After the sold out of the incumbents companies, the fixed access mirror license auction did not attract the interest of many investors and consequently didn’t raise market speculation, as expected by the former Communications Minister Sérgio 58


Motta. The licenses were sold for an atypical low price, even when compared to the early days of the first telecommunications auctions. Bonari Consortium (Sprint, France Telecom, National Grid) acquired Embratel’s mirror license for US$ 15.71 millions. Canbra Telefonica S.A. (Qualcomm, Bell Canada) took over the Tele Norte Leste Mirror company license for US$ 17.14 millions. Currently, Canbra consortium has got another commercial name, Vésper, for the operational company. Global Village consortium, integrated by operators form North-America and Israel, acquired Tele Centro Sul paying the symbolic amount of US$ 28,571.00 for the license. There was another bid of US$ 285,714.00 for that license, but Global Village presented a better technical proposal.

5.4

Financial Analysis

The privatization of the Telecom sector in Brazil was definitely another hard learning process for the Brazilian people. Guided by international interests, the Government was a catalyst to the process of economic domination by the dominant economies. Despite any globalization process, the Government has to protect its economy which, does not follow the same growth rate, does not have the same investment recovery profile, and is not protected by international favorable trade agreements, as is the case for the developed countries. Different from the telecom sector buyers, the balance of the Brazilian treasure was badly managed. The economical crisis, that hit the country at the beginning of 1999, forced the devaluation of the local currency, causing a terrible loss for the Federal Government, because the companies were auctioned in Reais - and not in Dollars - as informed by the press (R$ 3.50 = US$ 1.00, February 2003). The exchange rate was not the only drawback of the privatization process. In order to catch the attention of the investors, the Government invested US$ 26 billions (US 1.00 = R$ 1,00, December 1998) in four years, preparing the system for the privatization. Considering that the total amount raised from the auction was US$ 22 billion, there was an evident deficit in the Government account. Regarding health care, welfare and education, the investment curve has also a negative derivative, since their respective percentages of the Federal Government budget has been systematically reduced. The Health Ministry had its budget decreased from 11,00% in 1997 to 6,0% in 2000. The Welfare Ministry budget followed a similar path from 28,3% in 1997 to 21,4% in 2000. And, the Education 5.4. FINANCIAL ANALYSIS

59

Ministry budget was reduced to only 3,8% this year, from 5,5% in 1997. In an opposite direction, the expenses related with the federal deficit, such as interest and amortization payments to international creditors, increased from 18,1% in 1997 to the shameful mark of 43,7% in 2000. Therefore, it is clear that the resources raised from the telecommunications sector privatization had no other destination but the international creditors account, at the expense of a decreasing standard of health, welfare and education. The consequences of this inversion of priorities and values are unpredictable and sometimes irreversible and will be reflected in a decrease in the quality of life and opportunities for the current and future generations. Perhaps, the next generation will blame this one for introducing Brazil the global market economy and failing to build a nation better prepared to compete in this envisioned global village. The total federal debt to international creditors is around US$ 250 billions (February 2003) and the national revenue was only US$ 100 billions in 2002. The Brazilian GNP in 2002 was US$ 570 billions. Increasing taxation was the way found by the Government to finance its activities. Currently, each Brazilian citizen pays approximately 40% of their salary in taxes, although the federal debt continues to grow without bound. Sérgio Motta, the deceased former Minister of Communications and mentor of the Brazilian telecommunications sector reform, defined two special purpose funds that would be supported by a special tax collected from the operating companies. The Universal Service Fund (Fust) would be used to finance social investments, such as telecommunications service provision in low profit areas. The Telecommunications Technological Development Fund (Funttel) would be used to boost the national technology development. The two funds together would raise resources in the order of US$ 100 million, but the former Minister, Pimeta da Veiga, had already announced that he will not pulverize that money in schools and libraries. So far, since the privatization took off, the main effect sensed by the Brazilian users was an increase in the phone bill. Before the reform the price to acquire a telephone service was US$ 0.46 and now is US$ 7.15. The average monthly phone bill is around US$ 25.71, just for local calls. In the USA, where the population income is at least five times higher than the Brazilian, in addition to a much better quality of service, the average bill is around US$ 20,00. The bottom line is: the Brazilians are paying more for the same service. The penetration rate increased after privatization, in 1994 there were 8,4 telephones for 100 inhabitants and 5 cellular phones for 100 inhabitants. In 1999, 60


there were 16 telephones per 100 inhabitants and 7.2 cellular phones per 100 inhabitants. And the network digitalization percentage increased from 67% in 1998 to 81,6% in 1999. The above positive result have to be credited also to the investment of US$ 26 billions (1998 prices) made by the Government right before the privatization. By the end of 2002, the number of telephones per 100 inhabitantes increased to 29.4, which imples a total of 50 milion subscriber lines deployed, and the number of cellular phones per 100 inhabitants reached 20, which gives a total og 34 million mobile acesses.

5.5

Conclusions

The regulatory agency Anatel is responsible for supervising the quality of telecommunication service. But it still did not show enough strenght to punish operators which provide sub-standard services or disobey the rules for service provisioning. Anatel was created in 1997 as a result of the new Telecommunication Law. It is similar to the American Federal Communication Commission (FCC) and is now facing the same problem of manipulation by politicians and powerful companies faced by the FCC in the past. Following the General Telecommunications Law, Anatel’s current employees should hold their positions for only two years and then a new selection through a national contest should be done. The new selection didn’t take place yet and the president complains about a shortage of human resources in order to perform its regulatory duties. As a consequence, Brazil is still far from having communications services compatible with international standards. As of now, there is a net increase in unemployment in the telecommunications market, caused by a downturn of the American market. Embratel is facing a devaluation of its stock options due to the bankruptcy of its parent company WorldCom. Telecom Italia’s holding company, Pirelli, is threatening to pull out of the Brazil if it could not reach an agreement with the Opportunity Bank owner, Daniel Dantas. Ericsson is laying off because Telecom Italia is its biggest client. Telemar is also facing problems, but will survive because it has no ties to foreign companies. Telefonica is doing well in São Paulo, although a recent devaluation of the Brazilian currency had caused the shares of its parent company, in Spain, to plummet. Portugal Telecom is holding its market value and its operation is not thretened in São Paulo. BCP is having problems as well as Vesper. Certainly, a quite different 5.5. CONCLUSIONS

61

market from just two years ago.

62


Appendix A The Repercussion of Father Landell de Moura’s Inventions The New York Herald, announced Roberto Landell de Moura’s invention to the Americans, in a story that took up an entire page, published in October 4th of 1904, with the following title “Talking over a gap of miles through a ray of light”. It was the beginning of the repercussion, in the foreign, of the work developed by the Brazilian scientist (Fornari, 1984). Amongst the main passages of the news, one deserves a special projection: “Wireless telephony is a natural corollary to wireless telegraphy. The same laws of nature are the basis for both the inventions. But wireless telegraphy is a fact, accepted by the scientists and the public. Wireless telephony on the other hand, hovers through the air. Scientists in England and Germany are interested in establishing them. The several public attempts never had a boss to conduct them with positive objectives. Among the scientists the Brazilian Father Landell de Moura is not well known. Few of them have given attention to his titles to be the pioneer in that area of electrical investigations. Brighton, in England, and Ruhmer, in Germany, had recently engaged their knowledge in wireless telephony experiments. However, after Brighton and Ruhmer, Father Landell was heard: after years of experimentation, he had managed to obtain a Brazilian patent for his invention, which was called gouralphone”.

That same newspaper, two years beforehand, in October 12th of 1902, published an interview with Father Landell de Moura and informed the readers that his theories were so revolutionary that the patents would not be granted without the presentation of working models, for the practical demonstration of its viability. But, through the years, Father Landell’s inventions and Father Landell himself have been focused by the Brazilian press in information vehicles from several parts of the Country, by writers, entities, and people from the most important sectors of society, of which we will now present an abridgement or the most important parts of some of those demonstrations. The Jornal da Manhã, of Porto Alegre, from 25/06/1933, in a descriptive report revealed that the discovery of wireless telegraphy was made by a Brazilian. Illustrated with the picture of the inventor Father Landell de Moura and with the facsimile of the patent-letter that the United states Government had granted him for the invention of the wireless telephone, the report shows Father Landell’s profile and explains how Dr. Egydio Hervé, professor at the Universidade Técnica de Porto Alegre and President of the Instituto de Previdência, came to the surprising conclusion that Landell de Moura was the inventor of wireless telegraphy. The Gazeta, of São Paulo, in its 15/07/1933 edition, transcribed a letter, directed to a newspaper in Rio de Janeiro, A Naça˜ o, by Jayme Leal Velloso, in which the following references were made in relation to Father Landell de Moura and his scientific discoveries made in São Paulo: “Having lived 30 years in the state of São Paulo, of which 25 were in the capital, I have heard, many times, of experiments done by that illustrious priest, of telegraphy and wireless telephony transmissions, from the hill of Avenida Paulista to the hill of Sant’Ana, at an approximate distance of about eight kilometers in a straight line, facts that happened between the years of 1890 and 1894. There must still be a lot of people at that capital, which lived there at the time of those experiments and that could reveal and enlighten a lot about such an important subject. It would be convenient to have a thorough investigation so there would be no doubt about the Brazilian precedence of the gifted priest for discovering this great wonder of science”. Manhã do Rio, of Rio de Janeiro, issue of 02/10/1933, praised the idea proposed by the Jornal da Manhã in its story dated 25/06/1933, of the Brazilian Government effectuating an investigation along with the Departamento do Interior and 64APPENDIX A. THE REPERCUSSION OF FATHER LANDELL DE MOURA’S INVENTIONS

at the Bureau of Standards, of the American capital, through our Embassy in the United States, with the objective of claiming the glory shown by Marconi for Father Landell de Moura. The mentioned newspaper affirmed the following: “The title of ‘inventor of telegraphy’, attributed to Marconi, as is indicated, does not belong to him. Because before the former Italian sage and fascist peddler at the time, was a man that had a patent for the ‘gouralphone’, a device appropriate for the transmission of the phonetic word at a distance, with or without wires, through space, earth and water. That man was the Brazilian priest Landell de Moura, which was for a long time vicar at the Church of Rosário, in Porto Alegre. His patent was granted by The Patent Office of Washington, in 1900 (sic), and is registered under the number of 3 279, in the Brazilian archives.” Almost thirty years later, in 1960, Ernani Fornari released his work “The Amazing Father Landell de Moura” (“O Incr´ıvel Padre Landell de Moura”), which originated several manifestations with the objective of demonstrating the public knowledge of the patrician scientist. The writer Manoelito de Ornellas, in his column “Prosa das Terças”, from the newspaper Correio do Povo, of Porto Alegre, issue of 23/08/60, referred to Ernani Fornari’s as follows: “Not all of the human creatures will have Flaubert’s good fortune to say: ‘I shall seek revenge for the pain, describing it in my books’. Many human afflictions die suffocated at the mouth, without finding release in the written form, which was Flaubert’s privilege. The thought was born from the reading of Ernani Fornari’s book: ‘The Amazing Father Landell de Moura’. And the crystallization of that thought, in round hand, comes from an appeal received inside my office, from Dona Carlinda Leite Borges de Lima and Prof. Elida de Freitas e Castro Druck, who selflessly took up the job, which was both civic and humane, of giving Father Landell de Moura’s centennial the repercussion that justice requires.” In October 15th of the same year of 1960, the Orbis Clube de Porto Alegre accomplished the concurred session, which had Mrs. 65

Carlinda Leite Borges de Lima, starter of the movement that would celebrate the centennial of the physics scientist Monsignor Roberto Landell de Moura’s birth. During the reunion, which followed an extensive schedule, and was even reported by the Correio do Povo of 16/10/60. Mrs. Carlinda Leite Borges de Lima read passages of Ernani Fornari’s monograph allusive to Landell de Moura’s life and extraordinary inventions. In effect, the release of Ernani Fornari’s book stirred up, at the time, extraordinary general interest. Representative companies and important people in the social, cultural and scientific setting constituted a committee, led by Mrs. Carlinda Leite Borges de Lima and Colonel Abdias Arruda dos Santos, set out to revere the memory of the nostalgic Brazilian, which contributed so much to the progress of science and consequently all of humanity. This committee received immediate support from the Commandant of the III Army, General Osvino Ferreira Alves, with the addition of the participation of the Lions Clube de Porto Alegre, under the guidance of the Mesa-Redonda Pan-Americana, presided by Mrs. Carlinda Leite Borges de Lima. Also integrating the movement was the author of the newly released work and the President of IBAI – Instituto Brasileiro de Assistência ao Inventor, Professor Otávio Francisco Pinheiro, who made the following announcements about Father Landell de Moura and his inventions to newspapers in Rio de Janeiro. To the Diário de Not´ıcias, of 15/10/61, he declared: “The real inventor of the wireless telegraph and the photoelectric light bulb was the Brazilian priest Landell de Moura, and not Marconi, and I have documents that can prove the veracity of these assertions. Father Landell de Moura’s research and studies were registered at The Patent Office, one of the United State’s divisions in charge of registering all the patents for inventions, around two years before Marconi’s works, and besides those inventions, hundreds of other works from native scientists remain with no value, due to the lack of faith of the Brazilian in his people. The Brazilian is one of the peoples of greatest inventive capacity in the world, comparable to, and sometimes supe66APPENDIX A. THE REPERCUSSION OF FATHER LANDELL DE MOURA’S INVENTIONS

rior to Americans, Japanese, Russians and British. However, the national inventor suffers from a lack of support and assistance. Besides the Father Moura’s example, gaúcho that studied at Rio and there accomplished studies, he was accused of being mad when he asked the Government for help and a ship for his experiments; I also mention the name of Bartolomeu de Gusmão - the Flying Priest -, who first accomplished experiments with balloons outside of Brazil and completely forsaken by the authorities in the Country.” Professor Otávio Francisco Pinheiro told O Globo of 20/11/61 reiterating his affirmations, that his conviction that “Landell really is the inventor of the wireless telegraph and whoever wants to be convinced of that should read the book The Amazing Father Landell de Moura.” However, proceeding with the succession of events that marked Father Landell’s one hundred years, there was still the State Chamber of Representatives of Rio Grande do Sul’s homage, which instituted, in that State, that 1961 would be considered the Landellian Year, which occurred in January 21st, Father Landell de Moura’s birth centennial. The Army was present at the festivities, not only with its already mentioned support, but General Osvino Ferreira Alves had determined that in that day’s bulletin, the corporations that took care of the ornamentation in Rio de Grande do Sul, Santa Catarina and Paraná would make references to Father Landell de Moura and to the value of his inventions. The Archbishop of Porto Alegre, Dom Vicente Scherer requested that a commemorative stamp be issued in honor of the great scientist’s birth centennial, a request that was promptly taken care of by the Minister for Transportation. At the Church of Nossa Senhora do Rosário, where Father Landell de Moura was a parson for several years, mass was celebrated on the date that marked the one hundred years since his birth. The Globo bookstore, in Porto Alegre, which belonged to the publisher that was publishing Ernani Fornari’s works, joined in on the festivities and put on display several documents that belonged to Father Landell de Moura. 67

A few years later, on May 6th 1967, a group of gaúcho educators created the Fundaça˜ o Educacional Padre Landell de Moura (FEPLAM), in honor of the porto-alegrense priest’s name, who even before Guglielmo Marconi, discovered important inventions inside the field of telecommunications and a striking demonstration of recognition of the Brazilian intellectuality for the services granted by the scientist to humanity. Based on successful experiments utilizing radio, TV and newspapers as instruments for cultural transmission and social promotion, accomplished by the Diretoria do Ensino Industrial, some gaúcho educators, among them: Nélson Marchesan, Jorge Alberto Furtado, Zilah Mattos, Totta, Francisco Machado Carriou, Nilo Ruschel, Fred´ erico Lamachia Filho, Erica A. W. Coester, Ana Maria Duzzo, Paulo Paiva de Oliveira and fifty other municipal coordinators, aided by private companies and the main public agencies, they created FEPLAM with the objective of broadening the limits of communication and culture, having in mind the education and participation of everyone for the well-being and progress of our society. In the issue of 02//08/69, of the Correio do Povo, of Porto Alegre, it is possible to find, in the “Caderno de Sábado” column, signed by the journalist and professor Nilo Ruschel, exaltation to Father Landell’s memorable accomplishments. Starting his column with a most adequate phrase, Nilo Ruschel affirms: “He came tired from wandering, Father Landell. The burden he carried was too heavy for his shoulders – and for the time. It was the year 1901 and he was arriving at the United States, where he would remain for three years (sic)”. And it goes on with a detailed recapitulation of Father Landell’s suffering and difficulties to bring his three duly filed, famous invention patents to the United States, finally remembering the hardships the scientist had to endure to satisfy the requirements of the astonished authorities at “The Patent Office at Washington”. The Antena magazine, of Rio de Janeiro, November/December issue of 1969, published, under the title of “A museum for our pioneer”, a letter signed by Professor Francisco Machado Carrion, President of 68APPENDIX A. THE REPERCUSSION OF FATHER LANDELL DE MOURA’S INVENTIONS

FEPLAM’s Administrative Counsel, and by Mr. Alvacir Ribeiro da Rocha, of the Departamento de Orientaça˜ o Técnica, where they manifested the foundation’s immense satisfaction with the article published in the January/February issue of the same year, under the title of “In the history of telecommunications a place of honor belongs to a Brazilian: Father Roberto Landell de Moura”. In the letter they also presented three suggestions: “If possible, broaden the documentation research and registry of Father Landell de Moura’s activities, extend and reedit the book, ‘The Amazing Father Landell de Moura’, by Ernani Fornari, making it known to all the Brazilians. Make an ample campaign with the objective of searching all over the Country, and even in the USA, for authentic devices and objects utilized by Father Landell de Moura, so as to constitute a museum based on his works. And to look for a significant date in the activities developed by Father Landell de Moura and select it as the day to do homage to the imperishable and unrecognized pioneer, which could be established by the Ministry of Communications.” In 10/08/75, the Diário Popular, of São Paulo, published a story entitled “Um padre brasileiro e não Marconi, inventor do rádio”, by the journalist Tarc´ısio Machado Carvalhaes, which informed: “– Two years before Marconi started his experiences with signal transmission and with the wireless telegraph, the Brazilian priest Roberto Landell de Moura accomplished the first transmission of the human voice by means of a wireless device, from the top of Av. Paulista to the hill of Sant’Ana.” The astonishing revelation is made by Prof. Júlio Zapata, a Chilean that has settled down in Brazil since 1973. Zapata teaches radiojournalism, telejournalism, public relations and press relations at the ´ Communications Colleges Armando Alvares Penteado, Cásper L´ıbero and Objetivo. And it was while he was researching in that sector of activities that he discovered this important fact, unknown to the Brazilians. “– When I came to Brazil, with the objective of attaining knowledge about the Brazilian aspect when it comes to telecommunications, I proceeded a detailed research, and 69

to my great surprise, I read something about Father Landell de Moura’s experiments in that field. But the sources were very vague, imprecise. Only one book ‘O Incr´ıvel Padre Landell de Moura’, by the writer Ernani Fornari, approached the subject”. El Diário, of Buenos Aires, dedicated to the subject, in their 14/05/1976 issue, a story entitled “Sacerdote norteño inventó la radio”, from which we transcribe the following passage: “Cuando en 1895 Marconi comenzó sus experiencias con transmisiones tipo telégrafo y a una distancia nunca mayor de 6 metros, nadie pod´ıa imaginar que dos años, en un pa´ıs sudamericano, más concretamente Brasil, ciudad de San Pablo, un hombre ordenado sacerdote, pero también cient´ıfico de jerarqu´ıa, tenia ya construidos el teléfono sin hilos, el telégrafo y el trasmisor de ondas, precursor de la radio. Y con este u´ ltimo invento, el Padre Roberto Landell de Moura logró ante asombrados paulistas, propagar música, palabras y el tic-tac de un reloj a una distancia de 8 kilómetros”. To wrap up this series of registers and transcriptions from homages and manifestations to acknowledge Father Landell de Moura, nothing better than the integral reproduction of the most recent chronicle about the Brazilian scientist, by the writer Dinah Silveira de Queiroz, member of the Academia Brasileira de Letras, published in her column Mensagem, for the magazine O Cruzeiro, in September of 1982, under the title: “Father Landell de Moura. The mistakes of history”: “(From Lisbon) – The scientist Ronaldo Rogério de Freitas Mourão raised his finger, probably already luminous from pointing out stars, to try and make justice to a Brazilian from Porto Alegre, Father Roberto Landell de Moura. Before Marconi’s experiments, accomplished near Bologna, 1985, the priest had already done astonishing experiments with wireless transmission and reception of the voice, at a distance of about eight kilometers. And where did he do those experiments? At the top of Avenida Paulista to the hill of Sant’Ana, in São Paulo, in 1893 and 1894. He had patented the invention in the United States in the beginning of the century. Shortly after he would return to Brazil and our old and highly appreciated Jornal do Commercio gave him an opportunity to transcribe his inventions at the radio transmission. But there was a terrible mistake, to a certain point comprehensible, when the priest looked for the President Rodrigues Alves. One of the 70APPENDIX A. THE REPERCUSSION OF FATHER LANDELL DE MOURA’S INVENTIONS

President’s assistants asked Father Landell what would be the distance from which he wished the ships would exchange their messages and the answer really seemed like that of a madman – “The maximum distance possible. The distance you want or can achieve. My devices can establish communication with any points on the planet; the further they are from each other. That nowadays, because in the future they will be capable of interplanetary communications”. This was the impression that the President’s assistant had: “– Excellence, the priest is completely mad. Can you imagine that he reached the point of telling me about conversation with inhabitants of other planets”? The astronomer at the National Observatory, says, with reason, that today, when someone talks about interplanetary and even interstellar communication, the worldwide mentioned name is Marconi’s. Not even in Brazil Father Landell de Moura’s name is acknowledged as the inventor of radiotransmission. But in Portugal there is an educational foundation with Father Landell de Moura’s name. The engineer Arnaldo do Nascimento, from that foundation, wrote about the priest. “There has been a great moment in which the name of the illustrious priest has spread out over the world. It was in that same year of 1982, in which the Fundaça˜ o Padre Landell de Moura, by the guidance of Arnaldo do Nascimento, who is radio amateur, from Belmonte, accomplished the irradiation of the solemnities of more than one anniversary – four hundred and eighty-two years – of the first mass celebrated in Brazil, sent to the skies for the Portuguese communities of the world. It was wonderful to think that this engineer from Porto, in the night in which the commemorative party occurred, ´ in Belmonte, Pedro Alvares Cabral’s own village, sent to so many places the communication of the events that happened at the same ´ place where Pedro Alvares Cabral’s house is still (barely) standing”.

71

72APPENDIX A. THE REPERCUSSION OF FATHER LANDELL DE MOURA’S INVENTIONS

Appendix B Patents Awarded to Father Landell de Moura in the United States This appendix presents the three patents awarded to father Roberto Landell de Moura by the Patent Office of the United States of America. This material complements the text and provides a glimpse of the kind of pioneer father Landell de Moura was. He decided to file for a patent in the USA to offer his inventions to international entrepreneurs and to guarantee that sooner or later he would receive the honor and glory he deserved.

74APPENDIX B. PATENTS AWARDED TO FATHER LANDELL DE MOURA IN THE UNITED STATES Figure B.1: Patent 771 917. Page 1/6. Source: http://www.uspto.gov.

75 Figure B.2: Patent 771 917. Page 2/6. Source: http://www.uspto.gov.



















94APPENDIX B. PATENTS AWARDED TO FATHER LANDELL DE MOURA IN THE UNITED STATES

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Index Academia Brasileira de Letras, 23 Acoustic transmission, 14 Alcatel, 34 Alkmim, José Maria, 24 Almeida, José Américo de, 25 Alves, Rodrigues, 16, 20 American Telephone and Telegraph Co., 28 Anatel, 53 Auctions, 55, 56 Concessions, 53 Licences, 53 Andrande, Carlos Drummond de, 31 ANFORP, 29 Apolo IX, 31 Argentina, 5, 46 Armstrong, Edwin H., 24 AT&T, 8 Automatic exchange Rotary, 25 Baudot, 7 Belém do Pará, 4 Belém, City of, 6 Bell Telephone Company, 8 Bell, Alexander G., 7, 10 Bell, Alexandre G., 26 Bernardes, Artur, 24 Boltini, Santiago, 5 Borba, Manoel, 23 Bradesco, 40

Brascan, 21, 36, 37 Braun, Werner von, 31 Breguet system, 6 Brizola, Leonel, 28 Bull’s Eye, 2 Código de Comunicaço˜ es, 25 Campinas, 10 Campos, Roberto, 29, 37 Capanema, Guilherme S., 2 Cardoso, Fernando H., 43 Castello Branco, Humberto de Alencar, 34 CCITT, 49 Cellular telephony, 50 Central station, 3 Chateaubriand, Assis, 23, 25 Chile, 46 CIA, 29 Citizen Kane, 29 Collor de Mello, 43, 46 Collor de Mello, Leopoldo, 50 Collor de Mello, Pedro, 50 Companhia Telephonica do Brasil, 8 Comumications Bylaws, 25 Contel, 33 Costa e Silva, Artur da Costa, 34 CPqD, 34 CTB, 30 Curitiba, 2

d’Arlincourt, 7 D. João VI, 1 D. Pedro II, 2, 5, 7, 10, 26, 53 DDD system, 35 Diários e Emissoras Associados, 23 Dudley, Homer, 26 Duplex, 7 Dutra, Eurico Gaspar, 26 Electric telegraph, 20 Electric transmission, 15 Electrical recording, 24 Electromagnetic transmission, 15 Eletrobrás, 29 Embratel, 29, 33, 36, 40, 47 Empire, 1 Empresas Pólos, 36 Ericsson, 37 Farquhar, Percival, 19 FCC, 53 Figueiredo, João, 39 Financial analysis, 59 FNT, 33 Forrest, Lee de, 24 Fortaleza, 4 France, 21 Furtado, Celso, 28 General Electric, 26 General Telecommunications Law, 53 Geneva, 39 Globo Network, 29, 37 Gordon, Lincoln, 28 Goulart, João, 28, 33 Hanson’s Letter, 29 Hertz waves, 9 Hughes, 7, 48 102

IBGE, 31 IEEE, 24 INPE, 31 Institute of Electrical and Electronics Engineers, 24 Intelsat, 29, 38 International convention on Telegraphy, 8 IRE, 24 ISDN, 49 ITT, 28 ITU, 39 ITU-R, 49 ITU-T, 49 Jenkin, Fleeming, 4 Kelvin, Lord, 4, 7 Kennedy, Robert, 28 Kubitschek, Juscelino, 24 Latin America, 51 Light, 26, 30, 37 Lisbon, 8 Lopes, Solano, 3 Lupton, P. C. P., 12 Médici, Em´ılio G., 34 Mônaco, 39 Machline, 44 Mackenzie, Alexander, 19 Magalhães, Antônio Carlos, 40, 45 Manaus, City of, 6 Marconi stations, 22 Marconi Wireless Telegraph, 27 Marconi, Guglielmo, 25 Marinho, Roberto, 29, 39, 40, 45 Mattos, Haroldo C., 38 Mauá, Viscount of, 5 INDEX

Meyer, 7 Military applications, 3 Military regime, 33 Ministry of Communications, 34 Miranda, Carmen, 26 Mirror Companies, 58 Montecarlo, 39 Moritze, Henrique, 23 Morse telegraph, 6 Morse, Samuel, 2 Morse-Siemens, 7 Moura Brazilian patent, 12 Patents, 9, 12 Principles, 10 Moura, Roberto Landell Patents, 73 Moura, Roberto Landell de, 9, 11– 14, 16, 25 Moura, Roberto landell de, 8 NEC, 40, 44 New York, 8 NTSC, 49 O Liberal do Pará, 4 Oliveira, Euclides Q., 36 Optical telegraphs, 2 PAL-M, 49 Paraguay War, 3 Paraguay war, 6 Patent Office, 13 Patents, 73 Pedro the Voder, 26 Penna, Affonso, 20 Pessoa, Epitácio, 24 Philadelphia, Centennial Exhibition, 7 INDEX

Philco, 26 Philips, 47 Phonic system, 15 Pinto, Edgar Roquette, 23 Pinto, Oscar Moreira, 23 Porto Alegre, 2, 10 Postal Department, 20 Proclamation of the Republic, 6 Promon, 34, 47 Quadros, Jânio, 28 Quadruplex, 7 Queiroz, Francisco Pessoa de, 27 Rádio Clube de Pernambuco, 23 Rádio Clube Paranaense, 24 Rádio Jornal do Commercio, 27 Rádio Ministério da Educaça˜ o, 23 Rádio Nacional, 26 Rádio Sociedade, 23 Recife, 1, 23, 27 Record television, 39 Rede Globo, 37 Rede Tupi, 37 Regina, Elis, 30 Rio de Janeiro, 3, 8 Robeiro, Darcy, 29 Roberto Carlos, 30 Rodrigues, Jair, 30 Rome, 10 Rondon, Cândido M. S., 20 Rotary automatic exchange, 25 Royal Family, 1 São Paulo, 1, 9 Sales, Campos, 19 Salvador, 1 Santos, City of, 5 Santos, Silvio, 39 103

Sarney, José, 39, 40 SBMO, 39 SBrT, 38 Siemens, 7 Soap opera, 26 Sobrinho, Barbosa Lima, 27 Souza, Irineu E., 5 Stamp, 2 State-owned lines, 6 Stohrer, 6 Submarine cable, 4, 5 Sudam, 35 Sudene, 35 Sul-América Teleinformática, 35 Tele Montecarlo, 39 Telebrás, 40, 53 Telecom Investment, 42 Telecom companies, 41 Telecommunications Law, 54 Telegrams, 20 Telegraph First wireless transmitter, 9 Military applications, 3 Telegraphic stations, 5 Telegraphy, 2 International convention on, 8 Telephone, 7 Brazil, 7 exchange, 8 station, 8 United States, 7 Telephone exchange, 53 Telephonic system, 21 Investiment, 21 Telephony market, 54 Telettra, 47 104

Television, 27 Color transmission, 36 Commercials, 28 News show, 27, 28 Thompson, William, 4, 7 Toronto, 19 Trópico exchange, 34 Tramway Light and Power Company, 19 Translators, 7 Treuenfeld, Herr von Fischer, 3 Tupi Network, 37 Vargas, Getúlio, 25 Vicom, 40 Victoria, Queen, 4 Wall Street, 29 War in Europe, 1 Washington, 13 Washington Luis, 24 Wave transmitter, 14 WBTC, 4 Western Telegraph Company, 8 Westinghouse Electric Co., 23 Wheatstone, 7 Wireless telegraph, 9, 14 Wireless telegraphy, 20 Wireless telephone, 14

INDEX