7. ‘Somos zona roja’: top-down informality and institutionalised exclusion from broadband internet services in Santiago de Chile

Nicolás Valenzuela-Levi

Introduction

The telecommunications sector plays a major role in the imaginaries that today link infrastructure and notions of progress and development (Harvey et al., 2016). Yet, situations such as the COVID-19 pandemic have exposed how inequalities are dramatically reproduced or even amplified by digital infrastructures. The promise of infrastructure (Anand et al., 2018), in the case of internet, could have led some to believe that tele-working and tele-schooling were a real alternative for the majority of the population, which, obviously, has proved not to be true.

More broadly, social studies of infrastructure have long stated that inequalities and exclusion of part of the population are inherent to the neoliberal governance of infrastructure networks (Graham and Marvin, 2001). Since the 1990s, ‘cherry picking and social dumping’ became a common mechanism to exclude communities and territories from service provision, based on profitability under finance-oriented business models (Graham and Marvin, 1994). ‘Redlining’, or ‘redzoning’, is a way of excluding specific areas, and the communities who live in them, from a certain service. This practice entails the abdication from the responsibility (Appel, 2012a) of providing a commodity that is expected to be universal, or at least to lack any form of discrimination beyond individual ability to pay. Redlining involves exclusion that is not just individual, but collective and spatially specific. Surprisingly, however, corporate-led exclusion via redlining is scarcely discussed by studies that focus specifically on internet access (for two of the few mentions of the issue, see Fernández et al., 2019, and also my own work).

In this chapter, I examine the case of the zonas rojas [red zones] of fixed broadband Internet in Santiago, Chile. Using qualitative semi-structured interviews that involved managers from telecommunication companies, public officials, and community leaders, this work aims to explore the zonas rojas as an institutionalised form of network disadvantage. Two neighbourhoods are the focus of attention: La Pincoya and El Castillo, in the northern and southern outskirts of Santiago, respectively (see Figure 7.1).

Apart from the empirical contribution within the realm of internet studies, this chapter pays attention to the need to extend the notion of informality, usually approached as a bottom-up phenomenon, into top-down processes by which powerful actors enforce unwritten rules. Far from just working within homogeneous universal institutional environments – shaped by neoliberal globalisation – internet provision markets operate on the basis of business models that significantly depend on informality exercised by the rich, and not just by the poor. These informal mechanisms are developed and enforced locally, and spark a range of economic and social dynamics at the neighbourhood level. The bottom-up notion of informality in infrastructure networks, usually associated with the influential concept of ‘people as infrastructure’ (Simone, 2004), does not seem to be enough to describe the dynamics in play in the zonas rojas. As discussed by Harvey et al. (2016), linkages between infrastructure and social dynamics tend to be more complicated than the usual narratives.

In the following paragraphs, I attempt to explain this particular story of infrastructural complications. The first section offers a background that reviews and discusses the literature of internet studies and social studies of infrastructure. The second section describes the case studies and the methodology. The third section provides a thorough view of how broadband access operates in the case studies, based on the results from the interviews. The final section concludes.

Background

The rules of the telecommunications sector: one size fits all?

The structural readjustment period during the 1980s and 1990s, summarised by the Washington Consensus, included a pledge to privatise state-owned enterprises and deregulate the sectors in which they operated (Williamson, 1990). This agenda had an enormous impact on network industries, to the point that some scholars talk about current debates as ‘post-liberalisation technology policy’ (Jamasb and Pollitt, 2008). The structural readjustment policies of the 1980s and 1990s have been paired, in the 2000s, with a ‘good governance’ agenda that keeps pushing for governments to ‘adopt a one-size-fits-all approach to get things done’ (Andrews, 2010, p. 7). Issues such as competition, corruption, and market failures are debated within a political economy environment that is left untouched in its fundamentals. In other words, especially in the telecommunications sector, ‘there is no alternative’ (Swyngedouw and Wilson, 2014).

However, recently, the expansion of broadband internet connections has not followed previous rapid adoption curves within the telecom sector, as was the case with fixed telephone lines and mobile phones (World Bank, 2016). Inequalities in access to quality internet services have become a problem, acknowledged not only by critics, but also by the same institutions that promoted the implementation of the neoliberal agenda in the first place. The best example is the World Bank, in its 2016 World Development Report:

First-generation ICT [information, communication and technology] policies involving market competition, private participation, and light-touch regulation have led to near-universal access and affordability of mobile telephony, but have so far been less successful in spreading internet services. Much of the explanation lies in continued policy failures such as regulatory capture, troubled privatizations, inefficient spectrum management, excessive taxation of the sector, and monopoly control of international gateways. (World Bank, 2016, pp. 25)

Yet, ICT policies based on the neoliberal one-size-fits-all approach have not just been assumed as a given by policymakers, but often also by scholars. This supposedly universal and homogeneous rule-system of the internet sector is assumed by most researchers to be a framework to approach their analyses on internet access. By ignoring questions about the rules of internet access – in other words, the political economy of the internet – the environment in which internet adoption occurs is assumed to be one of a global market dominated by big transnational companies, under virtually invariant local frameworks of deregulation, privatisation, and financialisation. For instance, the most influential studies on the digital divide (van Deursen and Helsper, 2015; van Deursen and van Dijk, 2015; Helsper and Reisdorf, 2017), while contributing enormously to the understanding of individual access, appropriation and capacities, do not ask any relevant question about the political economy of internet service provision, and especially neglect the role of local and informal institutions. In other words, as I have attempted to summarise elsewhere (Valenzuela-Levi, 2020a), most studies of internet access tend to provide insightful analyses about the demand-side but to forget the supply-side.

If such a universal and homogeneous institutional framework is assumed, it seems natural to lack any attention to the unwritten rules of internet exclusion, which are enforced by specific actors, through specific mechanisms, at different territorial levels. Common institutional approaches to internet provision can be divided into two sectors. On the one hand, a series of studies focuses on small formal variations within the universal policy package: public investment, enforcement of regulation, prices policy applied to copper and fibre, tariff diversity, and the existence of national plans or strategies (Beltrán, 2014; Neokosmidis et al., 2015; Haucap et al., 2016; Ghosh, 2017). On the other hand, a number of studies have focused on shallow definitions of democratic ‘cultures’ or ‘regimes’ and how they link to internet adoption (Milner, 2006; Gulati and Yates, 2012; Stier, 2017). The notion of institutional factors is reduced to abstract ideas about democracy that are usually measured by opinion polls, or to small variances within the good governance agenda (Andrews, 2010). Informal institutions that operate at the local level, through specific mechanisms, and enforced by specific actors, are out of the discussion.

Informality in social studies of infrastructure

As already mentioned, a specific aspect of rule-systems (Pamuk, 2000) – or the institutional political economy (Chang, 2002) – that is missing from internet studies is the role of informal institutions, or non-written rules, in the telecommunications sector (Valenzuela-Levi, 2020a). These informal institutions can be placed in three categories: tacit rules, traditions or customs, and unwritten rules that are ‘enforceable’, that is to say, they require action or inaction by somebody that holds enough power (Khan, 2010). When it comes to social studies of infrastructure, informality is mostly associated with people breaking the written rules of certain markets: land, transport, waste management, electricity, water, and sewage. They operate as providers within, or are served by, informal sectors. Illegal, semi-legal, or black markets, are usually allowed by authorities given the lack of force to control them, and/or the importance of these sectors in the livelihoods of the poor.

Informal settlements, or slums, as areas within a city, or pieces of land that are occupied by squatters, are the usual object of discussion about urban informality, especially after the publication of Planet of Slums (Davis, 2006). Nonetheless, some scholars have gone further from referring to specific administrative boundaries or spaces as informal, and thereby have assigned the category ‘informal’ to a specific population, usually the urban poor (McFarlane, 2008). Hasan (2006), for instance, shares the definition of informal as associated with the ‘informal settlement’, plus classifying infrastructure as informal (i.e. ‘informal sewerage’). Dekel et al. (2019) differentiate between formal and informal spaces: however, the informal are the spaces instead of the people inhabiting them. Vollmer and Grêt-Regamey (2013) expand the informal category to cover urbanisation processes that forge informal settlements, discussing ‘informal land conversion’ activity. Similarly, Hill et al. (2014) use the informal to refer to a consequence of the formation of informal settlements, talking about informal urban growth. From transport geography, authors such as Evans et al. (2018) exemplify a growing attention to informal transport. Here, just as in ‘informal recyclers’, informal as a characteristic is assigned to a service sector.

Interestingly, a different kind of distinction comes from medical sciences and studies of chronic illness. For example, Van Houtven et al. (2010) discuss ‘care infrastructure’, and discriminate between formal and informal as paid and non-paid. ‘Remaining at home often requires support, which may be provided by formal programs (e.g. home health agencies) or informal caregivers (e.g. spouses or adult children who provide unpaid assistance). Informal caregivers of elderly adults often experience stress, economic hardship, and burnout, which increase the elderly adult’s risk of nursing home admission’ (Van Houtven et al., 2010, p. 57). Instead of the usual ‘informality of the poor’ that is present in discussions on ‘informal labour’, ‘informal recyclers’ or ‘informal transport’, the informal here is closer to the attention paid by feminist economics to unpaid care work (Braunstein et al., 2010).

Thus, informal are certain peoples or their activities: the poor, the trespassers, the precarious workers, the unpaid carers. What they have in common is a notion of a bottom-up informality. Informal are the activities and means for those excluded, marginalised, uncounted, and unpaid. These visions resonate with the already mentioned notion of ‘people as infrastructure’ (Simone, 2004). However, it is much harder to find accounts of informal means that come ‘from above’, which would be much closer to the ‘black box’ and the ‘how of capitalism’ discussed by Appel (2012b). There are increasing debates about the impacts of top-down decisions on local communities, as vividly explained by Anand et al. (2018) when describing the chain of decisions that led to a dramatic impact on access to drinkable water by communities of colour in Flint, Michigan. However, the problem of institutional political economy (Chang, 2002) of networked infrastructure, that is to say, of understanding both the written and unwritten rules of network disadvantage (Valenzuela-Levi, 2020a, 2020b), urges the incorporation of the perspective of informality as a top-down phenomenon too.

One of the works from the field of social studies of infrastructure that remarkably integrates a perspective that goes beyond bottom-up informality is the work by Pamuk (2000) on informal institutional arrangements in credit, land markets and infrastructure delivery in Trinidad. This author integrates informality as part of a broader conception of institutions. Pamuk formulates a fundamental critique, ‘by focusing exclusively on informal housing settlements when discussing informality, previous studies of land and housing policy in developing countries have ignored informal institutions that permeate both formal and informal settlements’ (Pamuk, 2000, p. 380). This author is able to escape the trap of the ‘informality of the poor’, by integrating informality and infrastructure into a broader institutional analysis. Nonetheless, what could be criticised from Pamuk’s work is that, although informal customs and traditions are observed across groups in society, and linked to both the formal and informal markets – providing a much more comprehensive perspective on informality than the rest of the literature – the analysis lacks the dimensions of conflict, controversy, and illegality that are crucial in the political economy of infrastructure (Appel, 2012a, 2012b): for instance, corruption is absent from the analysis.

Some more recent attempts in institutional economics and urban issues, as exemplified by the use of the political settlements approach, include illegal institutions as part of informal rules, and understand them as sustained by a balance of power that enables a specific distribution of benefits (Goodfellow, 2018; Valenzuela-Levi 2020a, 2020b). According to the political settlements approach (Khan, 2010), conflict and illegality, and particularly corruption, emerge as informal rules that can be explained based on the specific distributional role that they play. By focusing on customs and informal rules that are part of specific ‘cultures’, analyses such as that in Pamuk (2000) pay less attention to informal rules that need to be enforced by intra or extra state actors (Khan, 2010). By omitting attention to corruption, the informality of the rich is most likely to be overlooked. In order to better approach the political economy of networked infrastructure, however, both top-down and bottom-up informality should be observed in detail, understanding the unwritten rules that define how each sector operates. In what follows, I use the case of the zonas rojas of broadband provision in Santiago, in order to illustrate the relevance of this much required conceptual expansion.

Case study and methodology

Two neighbourhoods in Santiago

This research focuses on Santiago, the capital of Chile. According to the 2017 census, the Santiago Metropolitan Region (SMR) had a population of 7 million, comprising 40 per cent of the total of 17.5 million living in the country (Instituto Nacional de Estadísticas, 2017). Santiago is the second southernmost national capital of the Americas, after Buenos Aires. As such, it was the epicentre of Spanish colonial rule in Chile, and of the Republic of Chile since 1810 (Rodríguez Weber, 2017). Santiago is characterised by extreme socio-economic residential segregation, structured by a unitary affluent sector in the north-east (see Figure 7.1), and a periphery that is almost entirely poor and residential – with no other major land uses that could, for instance, produce jobs outside the affluent areas of the city (Sabatini et al., 2009; Garreton, 2017). Furthermore, in the Chilean capital, the ‘informal’ is not directly linked today to what is expected of informal settlements in most of the Global South (Hasan, 2006; McFarlane, 2008). Although there are a number of small-scale slums in Santiago, the majority of the poor live in formal social housing financed by the state.

In their current form, the peripheral and peri-central areas where the poor live were defined mainly by three origins. The former informal settlements (Garcés, 2002) that grew during rapid urbanisation due to the expansion of urban economic activity and the collapse of both the nitrate mines in the north and agricultural production in the south during the mid-20th century were the first (Rodríguez Weber, 2017). The second is comprised of the destination areas populated by those forcibly evicted from slums in affluent areas during the dictatorship led by Augusto Pinochet (1973–90) (Morales et al., 1990). The third is an unprecedented investment in subsidising a private market for social housing (Gilbert, 2002), which produced millions of units built on cheap land. This third origin is the most common for the majority of neighbourhoods where the poor have lived in Santiago during the last three decades.

The Chilean subsidised housing policy has been considered an example of successful reduction of the housing deficit among the so-called developing countries (as thoroughly reviewed by Gilbert, 2002, 2004). The enabling approach (Chiodelli, 2016) in Chile had its origin during the military dictatorship led by Augusto Pinochet between 1973 and 1990 (Gilbert, 2002), while the same policies were continued later by democratic governments (Ducci, 1997; Özler, 2012). Mainstream literature has usually referred to this policy shift as the reason for the reduction of the number of residents in Chile living in informal settlements to less than 1 per cent of the total population (Valenzuela-Levi, 2017).

Figure 7.1 Location of La Pincoya and El Castillo in Santiago, including spatial distribution of socio-economic groups in 1992, 2002, and 2012, according to census data. Source: Cociña (2017)

As recently described by Cociña (2018), the characteristics of the Chilean social-housing model can be summarised in four main features. First, the private for-profit sector develops the biggest portion of units. Second, the Ministry of Housing and Urbanism manages a centralised funding system based on vouchers. Third, the system promotes house ownership, and only recently has there been initial experiences of public rental. Fourth, those who have access to a subsidy require savings, and the loan had to be paid off before the mid-2000s, when – after years of protests by poor and indebted households – the social-housing system stopped generating debt among its beneficiaries.

As soon as the 1990s, scholars started to notice conflicts and social problems that started to be concentrated in the newly built subsidised housing. Ducci (1997) proposed the idea of quantitative success in terms of built units, paired with qualitative emerging problems. Discussion of the adverse effects of social-housing policies became mainstream among the Chilean housing and urbanism scholars after Rodríguez and Sugranyes (2004) called for attention to be paid to those ‘with a roof’ – in social-housing projects – instead of decades of mainly caring about those ‘without a roof’ – in the slums. The idea of a ‘new urban poverty’ (Tironi, 2009) then became widely accepted: since the mid-2000s, most of the urban poor live in formal housing and only a minority inhabit slums. Consequently, problems of distant locations of housing developments, concentration of the poor, increase of socio-economic segregation as an effect of state action, and clustering of social exclusion within new ‘ghettos’ became the usual topics of the debate concerning Chilean housing policies (Ruiz-Tagle and López, 2014).

The description of this particular landscape of urban poverty in Chile, and Santiago in particular, is relevant for the analysis of the case studies detailed in the next sections, because service provision is supposed to operate ‘universally’ in this strongly segregated city. For the selection of cases, neighbourhoods with two kinds of origins were selected, located in the northern and southern peripheries of the city, respectively (Figure 7.1). On the one hand, El Castillo is an example of forced eviction during the dictatorship and a later concentration of subsidised housing (Álvarez and Cavieres, 2016). On the other hand, La Pincoya was started by squatters at the end of the 1960s and later formalised (Salcedo and Torres, 2004; Barbera, 2009). Both are today part of formal neighbourhoods. However, they are also parts of working-class neighbourhoods which have stayed mostly poor, and where the effects of multiple forms of inequality are concentrated. They also experience permanent violence both from state repression and territorial disputes by drug gangs (Han, 2012). La Pincoya and El Castillo account for the imaginary of peripheral excluded places for any Santiaguinean.

In these neighbourhoods, access to network infrastructure services has become increasingly hard, not because of lack of physical infrastructure, but because of the cost of privatised services. Water bills, for instance, have had to be subsidised by the state: by 2015, more than 800,000 households received a water subsidy in Chile (Contreras et al., 2018). As is evident in the interviews, the Internet is increasingly being seen as a basic service, similar to water, sanitation, electricity, and waste collection. The story of the zonas rojas is partly a story of this transition of the Internet into an essential need.

Methodology

The data for this study was collected through fieldwork in Santiago de Chile, during the first semester of 2018. As part of the wider cycle of protests discussed in the introduction to this book, Chile has experienced what is now called the ‘social outbreak’ since October 2019. This research was conducted 18 months before that date. However, the forms of inequality and exclusion that are described here resonate with the demands raised by massive protests, and also with a body of work from social scientists who have thoroughly diagnosed the mounting tension that led to ‘social outbreak’ in 2019 (for a reliable account of this sentiment among people in Santiago, see Araújo, 2020).

The fieldwork consisted of 22 semi-structured interviews that included actors who have a role in the supply of internet services in the city. As already mentioned, two areas of the periphery of the city were selected as case studies, La Pincoya (municipality of Huechuraba) in the north, and El Castillo (municipality of La Pintana) in the south. Interviewees included managers and workers from telecommunication companies, small and medium enterprises (SMEs) from the same sector, national and local government officials, and community leaders. Whereas the views of managers, workers, and some SMEs are not anchored in a specific territory, local government officials and community leaders were specifically associated with the selected neighbourhoods. An interview schedule was utilised to organise semi-structured interviews. Depending on each interviewee, some topics were developed more deeply and extensively. Interviews were conducted in Spanish, recorded, and transcribed for analysis. Quotations are translated into English by the author. A set of preliminary codes was established based on pilot interviews. These codes were confirmed after transcription and used for content analysis. In what follows, excerpts from some interviews are mixed with secondary literature and a number of discussions that took place in the media during the period when this research was undertaken.

Broadband Internet in La Pincoya and El Castillo

Household broadband access in the SMR is provided by eight private companies. The Chilean telecommunications sector is an example of the tight links between global and national capital, as has been widely debated by social studies of infrastructure (Harvey et al., 2016; Anand et al., 2018). Among these companies, four are the main competitors: VTR, owned by the American holding Liberty Global, Carlos Slim’s Claro from Mexico, the Spanish company Telefónica, and the Chilean company Entel, owned by the Matte Group which belongs to one of the most traditional oligarchic families in Chile (Salazar, 2009).

Chile represents well what the World Bank (2016) identified as the widely accepted market-oriented policies of previous generations of telecommunication services that achieved high expansion, but have been less successful as regards broadband. For instance, by 2017, Chile was one of the leading countries in Latin America in terms of percentage of people using the Internet (World Bank, 2020). However, by the same year, Chile had only 16.6 fixed broadband subscriptions per 100 people, below the 17.9 reached by Argentina, and 27.7 by Uruguay, the nearest countries in terms of Gross Domestic Product (GDP) per capita within Latin America and the Caribbean. In the SMR, the percentage of people with internet access was 89.9 by 2017. According to a recent study by the Chilean government, by 2019 the percentage of households with fixed broadband subscriptions were near 100 in affluent areas, but only 28.2 in a municipality such as La Pintana (EMOL, 2019).

The contrast in fixed broadband access has sparked a public debate over the existence of zonas rojas [red zones], which are zones where users ask for the service but telecommunication companies say that they do not have infrastructural coverage there. This is how one of the interviewees describes the experience of being part of one of the zonas:

If you call to sign up to the service, they will tell you that your area doesn’t have technical viability. That is because it is a red zone, and red zones are all those sectors that big companies stay away from. They are defined by the fact that that at some point the copper cables were stolen, or that the residents have liquidity problems that exclude them from the big telecoms’ business model. They call these neighbourhoods red zones and use a technical excuse to discriminate.

A remarkable debate occurred in 2017 between the then head of the Sub-secretariat1 of Telecommunications (SUBTEL) and his immediate predecessor. A sub-secretary wrote an article questioning the public debate over the zonas rojas, arguing that these zones do not exist. He wrote that ‘the law establishes the obligation of guaranteeing coverage, continuity of service, regularity, compliance of the regulations and quality standards. That makes the idea of the existence of zonas rojas in telecommunications unsustainable’ (translated from Ramírez, 2017). In other words, according to the official, the illegal nature of the zonas is enough to deny their existence. The same official explains, in the article, the legal framework in which this debate is situated:

The public service concession is an administrative contract in which the concessionaire assumes the commitment to provide a service of collective and social interest, and the supervision is there for that to be fulfilled. The satisfaction of a public need is mandatory for all and without distinction. There is no such thing as saying that poor commercial appeal can be disguised as a crime, a ghetto dispute, or recurrent vandalism. Neither are there zones of any colour. (Ramírez, 2017, p. 1)

This official discourse was extended among high-ranked officials. I was able to interview a former minister, who told me:

If there is a neighbourhood taken over by drug dealers, that will affect everything. I would say that these are major public order problems. But something systematic, such as zones that do not have coverage … I never heard of, at least not in urban areas. A different thing is complaints about quality or continuity of the service.

The official discourse seems to deny the zonas rojas as a structural problem for the telecommunications sector. However, this discourse is not entirely monolithic. For instance, the above-cited article by the sub-secretary motivated a response from his predecessor, in which the existence of zonas rojas was acknowledged, and a pledge was made about the need to recognise the problem in order to solve it (Huichalaf, 2017).

Interviewing managers from the dominant telecommunication companies provided a contradictory narrative. On the one hand, they insisted that crime and vandalism was the justification for not providing services in some zones:

In the case of the older technology, which uses copper, and particularly in poor zones, cables are stolen. Since having copper in the streets is the same as hanging out 1-dollar bills (laughs), if you have on 1-dollar bills hanging over the streets, evidently impecunious people will collect those dollars.

As we will see later, the ‘older technology’ of copper cables is not the only option for provision of internet connections, and is somewhat obsolete. There are other technologies being used now that would be more difficult to steal. On the other hand, when asked about possible policies to solve the problem of the zonas rojas, the response was closer to the issues of ‘commercial appeal’ named by the sub-secretary (Ramírez, 2017). This is how the same manager talking about ‘dollar bills’ puts it:

Our position as a company is that the solution is subsidising demand (…) in Chile, that was the way we solved access to electricity and sanitation. This is similar. You have parts of the population that wouldn’t have access to drinkable water without subsidies for utility bills. Well, that would be unacceptable, so the government offers the money. We believe it’s the same with the Internet. If the government subsidises those in need within neighbourhoods that aren’t currently economically viable, someone will say that here we will get the same benefit as a middle-class neighbourhood. This means that half of the users will hire us if we put a cable there. Therefore, we will invest and install the cable. Problem solved.

Thus, the official discourse among high-ranking managers and public officials is that zonas rojas do not exist as part of the rules-system of the telecommunications sector. If something like these zones exists, it is an issue of public order, an exception, and a force majeure that has nothing to do with decisions by providers. However, going lower in the hierarchies within big transnational companies brought in a different view. For instance, when I was able to interview technicians from one of the main telecommunication companies, they confirmed the existence of the zonas. They believe that their origin might have been crime and vandalism, but they think that it is currently about a commercial decision:

If there are too many illegal connections, the network fails. You will have too many technical service requirements. It is not convenient for the company to send a technician 20 times to the same place during one week or one month. It is not efficient. So, what the company does is that it drops the services where it will have too many problems. (…) That is what happens, and that is why these areas are called red zones.

Talking to municipal officials, I was granted access to a formal communication sent by one of the poorest municipalities in the SMR, Renca, to the SUBTEL. In this communication, the municipality generated a map based on the claims of their neighbours about being excluded by telecommunication companies (see Figure 7.2). The municipality asked the SUBTEL to take action in regard to possible infractions by telecommunication providers. This communication occurred during the same year in which the sub-secretary in office denied the existence of the zonas.

Figure 7.2 ‘Red zones’. Map elaborated by the Municipality of Renca (Santiago) from users’ testimonies. Source: author

Interestingly, although high-ranking managers deny the existence of redlining, they acknowledge at the same time the limitations of government agencies to supervise compliance among internet providers. A manager from a transnational company gave me the following information about the government office responsible for supervising internet providers: ‘Did you know that the SUBTEL is the smallest sub-secretariat in the whole of Chilean government? They have the smallest number of staff.’ The claims – from users, workers, and local governments – about redlining and illegal exclusion being made possible by unilateral decisions by big telecommunication companies, emerges in tandem with a well-known low capacity for supervision of the market.

Just as in the case of the big telecoms, the discourse changed within the state when I talked to lower-ranking officials. For instance, a public servant in charge of ICT promotion programmes at the regional level used his origins in Rodelillo, a población in the city of Valparaíso, to explain that people have long used collaborative strategies to access telecommunications:

The Internet is increasingly transforming into a basic service. Therefore, families make efforts to have some sort of internet connection (…). For instance, I am from Rodelillo in Valparaíso. What did we do in Rodelillo? One person hired internet access and shared it with the neighbours, splitting the bill. We used to do the same with Cable TV. Then it is about strategies, one could say, that are community based.

This public official also claims that these contemporary community-based strategies were already present in older telecommunication technologies, such as fixed telephone lines:

When there were no fixed telephone lines, then there was always one neighbour that had a line and then they charged you for going to their house to make a call. Or, if somebody called you, the owner of the line went and knocked on your door. Then maybe we forget about that, of this collaborative logic that has long been there.

Lower-ranking state and big-telecom employees seem to have a much more nuanced knowledge of the rules of telecommunication service provision, as they operate on the ground. However, even this collaborative logic to pay the bill is not possible when an entire zone is excluded from hiring the service.

Nonetheless, this exclusion is so systematic that it has allowed the emergence of a new market. A key seems to be the ‘economically viable’ issue, mentioned by the same manager who talked about dollar bills hanging over the streets. This economically inviable nature of some areas as far as the big corporations are concerned, contrasts with the emergence of small local enterprises which are for-profit too but seem to be economically viable.

Community leaders both in La Pincoya and El Castillo, gave me practically the same information, ‘Somos Zona Roja’, and confirmed that the only access they have to broadband is not thanks to the big telecommunication companies, but to local providers. Surprisingly, both in La Pincoya and El Castillo, there were local small enterprises, each connecting between 300 to 500 users. As they explained to me in La Pincoya,

Here we have our own internet company … you know? Its name is Alcom. They are my friends. I worked with them. They have like a monopoly of Internet here in the hood. I have Alcom. It is a company from our neighbourhood.

A similar story was told in El Castillo:

… no internet provider that uses cables reaches us. Why? Because this is a Zona Roja, because here copper cables used to be stolen… so they decided to call us a Zona Roja, and now no one arrives with the Internet … no one! … here the only option is to use mobile Internet, but there is no good signal either. We only have one cell phone antenna in the area. (…) The Internet that I have now is provided by a guy from the neighbourhood.

Both examples of local providers share some elements. First, these are small, formal enterprises. Although conditions of hiring their services are less strict than those of big telecoms, people still have to sign formal contracts. As one interviewee from El Castillo told me:

Big companies ask you to sign an 18-month contract. This guy just asks you to buy the router. There is a contract that you sign, which is for about six months. He promises to come and sort out any problem for 6 months, with no charge. For instance, if a bird breaks the antenna, which is his property. (…) Part of what you pay is for renting the antenna from him.

Figure 7.3 Houses with installed antennas that are used to get broadband connections from local providers in El Castillo, district of La Pintana. Photo by the author

Second, they were started by young entrepreneurs who come from the same neighbourhoods or areas of the city. The local provider in La Pincoya began as a social enterprise by a group of university students who grew up in a more affluent neighbourhood, within the same municipality of Huechuraba. In the case of El Castillo, it was a resident of the neighbourhood. I was able to talk to a provider from another municipality from the south of Santiago, Puente Alto (next to La Pintana, where El Castillo is located) who decided to start an internet provision business when he was in high school, motivated by the lack of access in his home. He also provides services in El Castillo.

This latter entrepreneur, a 27-year-old man whose name is of Mapuche origin, vividly explains how his personal experience led him to become an internet provider:

My case is very particular, because it was born out of necessity. I lived in a zone where there was no Internet, and this was at the time of the Internet boom. So, sadly, I was not able to hire any company. I mean, I experienced it myself. I called all the companies, and there was no access. I was at high school, and there we designed an antenna … like … very handmade, made of aluminium … some of those antennas are still circulating over there … one of those antennas gave me access to the Internet. Partnering with a neighbour, we split the bill in two. So, this is how we realised that the need was not something affecting just me, but also the other neighbours, and it was the same all over the neighbourhood. In my case, it is about my own necessity, how to solve the problem, to face it… and now it is also about how to earn money.

Third, they use a similar technology: they install an antenna – like the one described above – in a place reached by optic fibre, and then they use smaller antennas or cables to transmit the signal (see Figure 7.3). One of the first experiences of this company from Puente Alto was actually in El Castillo, in the municipality of La Pintana. Interestingly, they recognise that it seemed risky to implement services there. This prototype was based on the same copper cables that the manager of the transnational company referred as ‘1-dollar bills’. But they mention the relevant role of the neighbours in generating a totally different relationship between the community and ‘their’ infrastructure:

This was one of the first prototypes, using cables. We installed them in the municipality of La Pintana… the are still in service… in El Castillo. People told us ‘how dare you to do it there, if they are going to steal you all the cables’. The first prototype was implemented five years ago, one year after our company started operating … and until now all the cables are there, all the customers pay their bills (…) we are talking about an alley (…) now we have more cable connections, from an antenna, connecting around 100 families. But the prototype was implemented in a place that is tremendously conflictive (…) it was like ‘don’t do it, they will steal everything’, but until today the neighbours have been taking care of what is theirs. They know that in reality we are a help to them, and it is worth taking care of what is theirs.

A fourth element in common is that local providers in La Pincoya and El Castillo use local shops to buy groceries as a way of finding clients. For instance, the provider in La Pincoya made a deal with small corner shops in the neighbourhood to advertise the service, and also to install some of their main antennas in the shops, using cables to connect the houses close by. As my interviewee from La Pincoya explained, the way to hire the service is to ‘go to the shop that is associated with them, and sign a waiting list’. Later, it is in that same shop where you ‘go and pay the bill’.

One of the providers in El Castillo, in turn, used the local street markets to literally voice their services. As a local community leader told me, about his internet provider:

I met him in the street market. (…) As I told you, here big internet companies don’t come, although we need the Internet for studying, or watching YouTube videos during our free time … it’s also very useful for finding a job. So … this guy was offering his Internet … I didn’t hire him immediately … I didn’t want to hire a company that I never heard of, doesn’t have a TV commercial … you know? But my friend next door bought it, and it worked … so I called the guy and he installed the Internet that I have now.

The same interviewee described the organic spread of this supply, always using the need for the Internet and ingenious ways of advertising:

There are other neighbourhood providers. For instance, here just in front of my house (…) I realised because their wi-fi network appeared in my devices. They used the name of the network to advertise themselves. Here my neighbour has another one … he is the provider now … I know because they installed a huge antenna (…) he has a different kind. My antenna is just a metal stick with a white ball on top. He has a frame. … yep … here the majority have the Internet from the neighbourhood, internet de barrio.

The usual narrative about informality and infrastructure needs to be challenged in the case of the Internet. What the zonas rojas show is a telecommunications sector in which informality is not how the poor operate outside formal rules to access or produce services. Actually, in a new and inverted narrative of informality, it is the rich – shareholders and managers from big telecommunication companies – who operate informally and illegally to sustain a business model that excludes the poor. These findings can be linked to a recent analysis of African cities (Meagher, 2018), in relation to ‘frugal innovations’ which enhance involvement by local informal actors among the urban poor, but always benefit corporate interests from ‘above’. However, I insist, the ‘formal versus informal’ distinction must be detached from the ‘top-down versus bottom-up’. In the work of other researchers, these two distinctions converge, but here they diverge. Or, one could say, they converge in the opposite direction: bottom-up is the formal and top-down the informal.

Yet, beyond the discussion on informality, the link between frugal innovation and the distribution of benefits is similar to that found by Meagher (2018). Another manager, different from the ‘dollar bill’ story, provided another view, that might explain why big companies are not bothered by the existence of the SMEs that create a local provision market that would otherwise be theirs to serve. About the zonas rojas and local providers, he says:

I have seen it, and not just in Santiago, but also in other regions (…). Two or three providers that make you ask yourself ‘Where are these guys getting their Internet from.’ Now, from a certain point of view, these guys are still buying services (…). They are re-selling. And it is reaching a market that perhaps is not possible for you to serve. Much more atomised and cheaper than what you could do with your cheapest alternative. Then, in this way, you are still getting profits. Somebody is hiring you. Now, if this guy was connected illegally, that would be a different thing. But if they hire fibre or a dedicated link to our company (…) and re-sell it… well… what is wrong with that? (…) It would be great to have a product for those clients, but sometimes so, so cheap, can be hard.

Far from an exceptional case of force majeure, the zonas rojas seem to be a consolidated part of a well-functioning and profitable system of written and unwritten rules in the Chilean internet market. It appears that part of the mechanisms that are needed for sustaining a system of informal rules is a deliberately small supervisory government branch, and an official denial of redlining. Living what seems to be the effects of the informality of the rich and transnational capital, a top-down exercise of informality, the poor access services via formal entrepreneurial activities that emerge in places like La Pincoya and El Castillo, while conforming a new socio-productive local fabric in the periphery of Santiago.

Conclusions

Using broadband Internet in Santiago de Chile as a case study, this chapter illustrates ways in which the systems of rules in the telecommunications sector include informal institutions that need to be enforced to sustain the dominant business model for service provision. Illegal redlining seems to be a mechanism that is inherent in the functioning of the telecommunications sector, based on unilateral decisions by big telecommunication companies, which are possible thanks to the denial of the phenomena by national authorities that are in charge of supervising the sector. These informal mechanisms are far from being exceptional: they are a fundamental part of the systems of rules that shape the telecommunications market. For these unwritten rules to exist and operate, they require an active role by transnational capital, high-ranking managers, and public officials. They illustrate the informality of the rich, a top-down enforcement of unwritten rules, and sustain rules that distribute benefits towards corporate capital.

Thus, in this work I criticise the limits of the views that social studies of infrastructure tend to have on informality. A dominant attention to bottom-up experiences outside formal rules is linked to a well-established association between informality and the lives of the poor. In the context of rising debates about the role of the rich and informal institutions, the chapter provides some elements to overcome the dominance of the ‘informality of the poor’, and proposes to look at the ‘informality of the rich’. This top-down informality should be incorporated into the analytical toolkit within social studies of infrastructure.

As I hope is evident in this chapter, my analysis aims to expand the analytical notions of informality. However, it is far from my intention to celebrate informality as has been done by scholars and policymakers in order to promote liberalisation reforms and pro-market policies in the contexts of weak states in Latin America (Gilbert, 2012; Meagher, 2014). Furthermore, this research pays attention to the distribution of benefits that both formal and informal rules allow, as it can be found in other technology-related works such as the those mentioned above by Meagher (2018). She eloquently talks about corporate interests ‘cannibalizing the informal economy’. More locally, in Chile, a similar understanding of a top-down imposition of rules to both discipline the poor and extract value has been thoroughly developed by social historians who see local informal markets as ‘residual spaces of sovereignty’ (Salazar, 2003). Informality, expressed at the neighbourhood level by street markets, is seen as a stubborn resistance by the people paired with an extractivist existence by the elites, all which can be traced back to colonial origins (Salazar, 2009). Nonetheless, sharing most of these views on power balances, I insist on breaking the formal-rich and informal-poor associations that are so important in these influential narratives.

If looking ‘above’ for subjects of informality is a novelty in comparison to the usual narrative in social studies of infrastructure, another new element is the characterisation of service provision initiatives that emerge from poor areas of Santiago. The local enterprises that provide broadband are formal, not informal. They both interact and somehow compete with the dominant service provision model, which is sustained by rules that benefit the rich and transnational capital, and are in conflict with the local socio-productive fabric in peripheral places like El Castillo and La Pincoya. Without overcoming the usual association between informality and the poor, citizens, decision-makers, and scholars will have less analytical resources to confront the challenge of providing and developing key services such as broadband Internet. A question that remains is: what fundamental non-written rules could we be missing when only focusing on the poor to analyse informality and other infrastructure sectors?

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