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Synthesis/Regeneration 38   (Fall 2005)

The Free Software Challenge in Latin America

by David Sugar

While serving as ambassador to Peru, John Hamilton used his role as representative of the United States to serve notice in a letter to the president of the Peruvian congress that the Microsoft Corporation disapproved of Peru debating a new law, Special Bill 1609, that favored the use of free software in government procurement, and that its passage would materially affect Peruvian relations.

As nations around the world increasingly turn to free and open-source software to cut costs and promote local development, powerful North American commercial interests have responded by bullying national governments not only by proxy (using public servants like John Hamilton or using civil law to try and intimidate outspoken critics such as Brazil’s ITI president Sergio Amadeu, who compared Microsoft’s business practices to those of drug dealers) but also directly. One recent example was Microsoft CEO Steve Ballmer’s speech threatening to sue Asian governments who may choose to procure and use free software.

Part of what distinguishes free software (sometimes also called open-source or libre software) commercially from proprietary software is a matter of licensing. While all software is protected under copyright, commercial proprietary software is often licensed under terms that create additional restrictions, such as limiting where one can use such software and who may be allowed to use it. Often proprietary commercial software includes licenses which explicitly deny users the right or ability to modify software to fit their needs or access their own data, the right to speak about the functionality of the software they purchased, or to resell it to others when they no longer wish to use it. In contrast, free software expressly asserts and grants these fundamental rights through licensing, and does so in a way that enables others to fully reclaim these rights such as by providing source code.

While both free and proprietary commercial software have co-existed uneasily for a long time in many parts of the world, I believe what has made certain private North American commercial interests respond directly in Latin America is that many nations there have chosen to promote the use of free software specifically in public administration.

There already is a long history for the support and use of such software in Brazil by the Workers Party, starting from the days when they controlled the state government of Rio Grande Do Sul and instituted private/public sector partnerships through projects such as procergs. Most recently, the government of President Luiz Lula Da Silva has chosen to use free software solutions built around GNU/Linux exclusively in a project to make computers available to the poor, as recommended by MIT this past March.

Free software in public administration is not just about software for special government programs such as digital inclusion for the poor. This is a battle about the purchase and use of all software by national governments and the terms under which such software will be provided . This is about the procurement of servers and database applications used to house government data. This is also about the software that will be purchased and used on the desktops of government office workers every day, and whether they will continue to purchase and use Microsoft Windows and Microsoft Office under the terms of a monopoly supplier, or free software alternatives such as GNU/Linux and OpenOffice.

In Latin America, money that is spent on proprietary commercial software serves mainly to make already rich foreign software publishers even richer.

As Latin American governments increasingly use free software, suppliers will need to adapt to provide it. Private industries that interact with government will also be affected, needing to implement this software in order to remain compatible and provide additional private markets for those vendors. All of these create a national economic environment that certain companies, such as Microsoft, would need to change in order to fully participate in.

One reason that free software is being promoted by Latin American governments is initial cost. In Brazil, they expect to save over $1 billion annually through the use of free software and elimination of license fees. Many other Latin American governments are of course keenly aware of the cost benefits of free software. In some countries, such as Peru and Argentina, they have tried passing special procurement laws to more rapidly increase the adoption of free software in government. In Venezuela, the use of free software in public administration is now supported directly by President Hugo Chávez.

While it is true that the total cost of software ownership is not represented in the purchase price or license fees alone, most other factors also tend to favor free software and better explain the potential for large cost savings through its use. One reason is that commercial free software will often work on existing and older hardware rather than requiring new hardware to be purchased. Another is that since proprietary commercial software publishers depend on the number of licenses they can sell, it is often desirable to require as many additional software sales to perform a given level of work as possible.

It should therefore come as no surprise that I often find the same workload that can be done, for example, with a typical GNU/Linux system may require 3 or 4 times as many proprietary servers, which also represents additional hardware and support costs.

Free software also can result in lower costs through the absence of monopolies. One cannot achieve a monopoly in free software in part because there can always be another free software publisher that can supply the same goods at a lower cost should this occur. This is in fact one of the main reasons for governments to prefer using free software instead of proprietary commercial software. When money is spent on proprietary software, only a small proportion of that money goes towards funding useful services and software development, as a large part of it goes as a monopoly rent to the shareholders of the proprietary software company. On the other hand, in the world of free software, there are no such monopolies, so money that is spent on free software is good for creating jobs and hence offers other direct and local economic benefits.

In Latin America, money that is spent on proprietary commercial software serves mainly to make already rich foreign software publishers even richer.

In trying to create a market for or to promote the use of free software, many Latin American countries, such as Peru, have often chosen to do so through procurement laws, which cover how a government will purchase goods and services. These laws typically state the terms of purchase that a government will use. Often they are designed to prevent bribery and make the process of government purchase transparent. This is often done through the use of competitive bidding. Competitive bidding allows products created by different manufacturers and publishers to compete on providing the same service, and by doing so prevents the government from being forced to rely on a sole source supplier.

In providing opportunities for Latin American citizens to directly participate in the worldwide commercial software market locally, free software offers incentives for forming a local software industry that can then compete on an equal basis with that of any other advanced country in the world. What we often forget is that software does not require expensive plants or high capital investment to develop.

Software may only require people who are free to use their skills and natural talents. Certainly the nations of Latin America can and do produce people with such talents and skills. Free software means these people can practice these skills for their own benefit and the benefit of their society as a whole without having to look for work in or migrate to foreign lands. By choosing to procure free software, the national government can directly encourage this.

If Latin American countries choose to create an economic environment that accepts participation by free software, existing corporations need not be excluded. Companies like Microsoft could choose, for example, to change the way they license their existing products. They are also free to adapt and offer services based on existing free software already in the marketplace. Instead of competing in these new markets, some companies have responded by trying to make it impossible for Latin American governments to choose and use free software at all. These companies not only resort to bullying, but also lobby our government to modify free trade treaties and use international organizations to include conditions that try to make it impossible for Latin American nations to choose alternative products or develop local markets.

The World Intellectual Property Organization (WIPO) is often used in this way to promote the private commercial interests of wealthy corporations. WIPO is used to promote treaties and laws which export the North American corporate notion of pharmaceutical and software idea-patenting to developing nations. Private corporations then use these same treaties to enforce existing North American patent monopolies, thereby preventing the development of competitive local industry. Another example of market control through trade treaties is the IP rights chapter of the Free Trade Area of The Americas (FTAA) treaty.

One way Latin American countries have responded to WIPO and other IP-bearing treaties has been by banding together with other developing nations around the world to help promote a development agenda for WIPO and bring it into harmony with the wishes of the UN General Assembly. Yet powerful American and European commercial interests have chosen to use the WIPO chair to explicitly bar NGOs representing the interests of developing nations from attending or participating in WIPO discussions on a development agenda, even those organizations already duly certified and recognized with observer status.

The people of Latin America surely must understand what corporate bullies are. Last century many Caribbean nations were routinely invaded by US Marines as part of the banana wars to prop up the interests of specific North American corporations such as United Fruit. While last century’s bullies came with tanks and guns, the bullies of this new century now come with laws and treaties they wish Latin Americans to adopt that undermine the heritage and the most basic rights Latin American citizens enjoy, not for the benefit of Latin America, but once again for the benefit of private North American corporate interests. The right to innovate is not a privilege to be restricted to a tiny minority, is not even a right specific or exclusive to the question of free software alone, but is a basic and fundamental right every human being must be free to enjoy.

David Sugar is an active maintainer for a number of packages that are part of the GNU project (http://www.gnu.org). He also travels worldwide speaking about issues related to free software, telephony, and ICT policy.

[12 aug 05]

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