1998 Puerto Rican general strike
Encyclopedia
Puerto Rico Telephone Company
Claro is the largest Puerto Rican telecommunications services company. It is headquartered in Guaynabo, Puerto Rico, and has operated for almost a century offering voice, data, long distance, broadband, directory publishing and wireless services for the island residents and businesses. It was...
workers to protest a government privatization plan. Three weeks later, an estimated 500,000 people joined a two-day general strike, bringing commerce and travel in Puerto Rico
Puerto Rico
Puerto Rico , officially the Commonwealth of Puerto Rico , is an unincorporated territory of the United States, located in the northeastern Caribbean, east of the Dominican Republic and west of both the United States Virgin Islands and the British Virgin Islands.Puerto Rico comprises an...
to a standstill. Protests and pickets were mostly peaceful, but in the week before the general strike some infrastructure elements were sabotaged, and two bombs were detonated. The strike failed to stop the privatization plan, and in July a consortium led by GTE
GTE
GTE Corporation, formerly General Telephone & Electronics Corporation was the largest independent telephone company in the United States during the days of the Bell System....
bought the PRTC for US$1.9 billion.
Background
At the start of the 20th century, brothers HernanHernan Behn
Hernan Behn co-founded the Puerto Rico Telephone Company which eventually spawned ITT. Behn, along with his brother Sosthenes built the Two Brothers Bridge —Puente Dos Hermanos in Spanish— in San Juan. The bridge links the districts of Condado and Old San Juan.-References:# Morales...
and Sosthenes Behn
Sosthenes Behn
Sosthenes Behn was an American businessman widely known for founding ITT. He held the rank of Lieutenant Colonel in the U.S. Army.Sosthenes Behn was born in the island of St. Thomas, then part of the Danish West Indies...
founded the Puerto Rico Telephone Company
Puerto Rico Telephone Company
Claro is the largest Puerto Rican telecommunications services company. It is headquartered in Guaynabo, Puerto Rico, and has operated for almost a century offering voice, data, long distance, broadband, directory publishing and wireless services for the island residents and businesses. It was...
, before moving to New York and incorporating International Telephone and Telegraph (ITT) in 1920. ITT ran the PRTC for many years, coordinating telephone service on the island with the government's Interior Department. In the 1940s, the Puerto Rican government enacted a series of laws designed to make telephone access more available in the eastern part of the island and allowed the state to play more of a role in providing service. By the end of 1959, the island had 76,000 phone lines.
Service under the ITT/ID partnership expanded rapidly across the island, but tended to favor wealthier urban areas, while residents of outlying areas experienced long waiting periods and lack of access. ITT often imported outdated equipment from Latin America for use within the PRTC, and the company's salary practices produced criticism: some non-Puerto Ricans were paid almost four times as much as the highest-earning Puerto Rican executive. This was compounded by an October 1973 ruling by the Puerto Rico Public Service Commission
Puerto Rico Public Service Commission
The Puerto Rico Public Service Commission is one of Puerto Rico's oldest regulatory bodies whose jurisdiction has changed over the years.The PSC currently regulates the retail sale of natural gas, used primarily for cooking in Puerto Rico. It also regulates trucking and "público" cars, or jitneys,...
, fining the PRTC US$219,000.
In 1974, Governor Rafael Hernández Colón
Rafael Hernández Colón
Rafael Hernández Colón is a Puerto Rican politician who served as the fourth Governor of the Commonwealth of Puerto Rico for three non-consecutive terms, from 1973 to 1977 and from 1985 to 1993. An experienced politician, Hernández holds the record for being the youngest Governor of Puerto Rico,...
oversaw the government purchase of PRTC from ITT for a price of US$168 million. The newly nationalized phone company sought to improve service and expand networks, beginning with a US$500 million modernization fund. By 1980, the island had 12.9 lines per 100 people, up from 8.3 in 1974. By the 1990s, the PRTC was donating US$100 million each year to the government and gave free service to Puerto Rico's public schools.
1990 strike
In February 1990, Governor Hernández Colón – serving his third and final term – proposed the sale of the PRTC to Bell Atlantic (which merged with GTEGTE
GTE Corporation, formerly General Telephone & Electronics Corporation was the largest independent telephone company in the United States during the days of the Bell System....
in 2000 to create Verizon Communications
Verizon Communications
Verizon Communications Inc. is a global broadband and telecommunications company and a component of the Dow Jones Industrial Average...
). Hernández Colón suggested that proceeds from the sale would go toward public education and improved infrastructure. Labor unions in Puerto Rico opposed the sale, however, and on 28 March 3,800 telephone workers went on a one-day strike. On the same day, a march of 150,000 Puerto Ricans proceeded to the capitol building in San Juan
San Juan, Puerto Rico
San Juan , officially Municipio de la Ciudad Capital San Juan Bautista , is the capital and most populous municipality in Puerto Rico, an unincorporated territory of the United States. As of the 2010 census, it had a population of 395,326 making it the 46th-largest city under the jurisdiction of...
. This activity – in addition to a law requiring a $3 billion sale price and a ban on firings for 18 months – blocked the proposed sale.
Deregulation
When the US Congress passed the Telecommunications Act of 1996Telecommunications Act of 1996
The Telecommunications Act of 1996 was the first major overhaul of United States telecommunications law in nearly 62 years, amending the Communications Act of 1934. This Act, signed by President Bill Clinton, was a major stepping stone towards the future of telecommunications, since this was the...
, Puerto Rico's telephone market – like many others in the US – was deregulated
Deregulation
Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces.Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces.Deregulation is the removal or...
, causing an influx of competitors to what had previously been a PRTC monopoly. Once other companies began competing with the PRTC, its size and structure became a liability. Carmen Culpeper, the company's president, said it was "bound by too many government procedures and regulations that delayed decision-making in a competitive environment."
Privatization proposal
When Pedro RossellóPedro Rosselló
Pedro Juan Rosselló González, M.D., , is a Puerto Rican physician and politician who served as the sixth Governor of the Commonwealth of Puerto Rico from 1993 to 2001...
became governor of Puerto Rico in 1993, he advocated a program of widespread privatization
Privatization
Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector to the private sector or to private non-profit organizations...
in a variety of fields. In 1995 the government sold its Puerto Rico Maritime Shipping company, and a number of local government-owned farms, hotels, and mills were also privatized in the early part of the decade. "The government should not be competing in areas where it is not effective", Rosselló said.
As plans for the sale of the PRTC began to crystallize, a twelve-hour general strike was held in October 1997. Over 100,000 people participated in the coalition action, one of the largest gatherings of Puerto Rican residents in history.
On 27 May 1998 Rosselló announced that the government had reached an agreement to sell a majority stake of the PRTC to the GTE consortium. Although the PRTC — which made a profit of US$130 million in 1996 – was providing "generally good" telephone service and using "modern equipment" (in the words of the conservative National Center for Policy Analysis
National Center for Policy Analysis
The National Center for Policy Analysis is a non-profit American conservative think tank whose goals are to develop and promote private alternatives to government regulation and control...
), some considered it to be inefficient and ill-equipped for competition in the growing wireless market.
Others disagreed. Victor Garcia, minority leader of the Puerto Rican Independence Party
Puerto Rican Independence Party
The Puerto Rican Independence Party is a Puerto Rican political party that campaigns for the independence of Puerto Rico from United States suzerainty....
, said the PRTC had "the most advanced telecommunications infrastructure in the Caribbean" and that "its markets are growing and its competitive position is good." Union leaders expressed concern about layoffs and undervaluing of the company. Jose Juan Hernandez, president of the Independent Telephone Workers Union, claimed that GTE was planning to fire several thousand workers, and that the government offered a "fire sale
Fire sale
A fire sale is the sale of goods at extremely discounted prices, typically when the seller faces bankruptcy or other impending distress. The term may originally have been based on the sale of goods at a heavy discount due to fire damage...
price, at least $3bn below its value".
Some Puerto Ricans saw the proposal as an attempt to gain favor with mainland US business interests, to promote Rosselló's declared goal of statehood for the commonwealth. The PRTC was seen as an organizational focus of nationalistic pride among many on the island. Representing a militant extreme, the Boricua Popular Army
Boricua Popular Army
The Boricua Popular/People's Army — or Ejército Popular Boricua in Spanish — is a clandestine organization based on the island of Puerto Rico, with cells in the United States. They campaign for and support the independence of Puerto Rico from what they characterize as United States colonial rule...
said, "This sale is nothing more than a declaration of war. Now they will know what war is."
PRTC workers strike
On 19 June 1998, when the Senate of Puerto RicoSenate of Puerto Rico
The Senate of Puerto Rico is the upper house of the Legislative Assembly of Puerto Rico, the territorial legislature of Puerto Rico. The Senate is composed of 27 senators, representing eight constituent senatorial districts across the commonwealth, with two senators elected per district; an...
approved the sale, 6,400 PRTC workers went on strike. The action was coordinated by the 2,000-member Independent Brotherhood of Telephone Workers and the 4,400-member Independent Telephone Workers Union. 1,400 management employees reported for work (some of them arriving by helicopter on the roof), and some employees crossed picket lines carrying food and pillows for an extended stay inside. Some small-scale confrontations were reported on the first day, with one arrest after a worker was accused of spraying police with a mace
Mace (spray)
Chemical Mace is a tear gas in the form of an aerosol spray which propels a lachrymatory agent mixed with a volatile solvent. It is sometimes used as a self-defense device...
-like substance.
Violence and sabotage
Clashes between striking workers and police became more violent on 22 June when officers beat a group of strikers unconscious as members of the press watched. In the days after this incident, militant protesters carried out a wave of property destruction and sabotage. In the southern town of Santa IsabelSanta Isabel
Santa Isabel is the Spanish and Portuguese name of one of two Roman Catholic saints, Saint Isabel of France and Saint Isabel of Aragon. Various places have been named for either of such persons. These include: Argentina:...
, a bomb concealed in a flashlight exploded in the hands of a police officer, severing a finger and wounding his leg. Another bomb was later detonated outside a branch office of Banco Popular, which participated in the GTE deal.
Elsewhere at the end of June, telephone and optic fiber cables were cut, causing service losses to over 300,000 customers and half of the island's ATMs
Automated teller machine
An automated teller machine or automatic teller machine, also known as a Cashpoint , cash machine or sometimes a hole in the wall in British English, is a computerised telecommunications device that provides the clients of a financial institution with access to financial transactions in a public...
. A telephone switching box in Cayey and a telephone booth in Mayagüez were also set on fire.
As the workers' strike dragged on with no response from the government, a coalition called the Greater Committee of Labor Organizations (Comite Amplio de Organizaciones Sindicales, or CAOS) was formed with the goal of launching a general strike.
New York Health Care Workers Union
Local 1199 NYUIET representative Victor Rodriguez met on July 9 in New York with members of the
health care workers union, Local 1199. The PRTC workers plan to take their objections to the privatization to the US Federal
Communications Commission (FCC), which still must approve the sale. 1199 head Dennis Rivera said his union would provide legal
support and lobbying to pressure the FCC. [ED-LP 7/10/98]
Many analysts feel that Rossello and the PNP are pushing for the PRTC privatization as part of their effort to have Puerto Rico
join the US as a state. On June 29 Anibal Acevedo Vila—president of the Popular Democratic Party (PPD), which supports maintaining
Puerto Rico's current "commonwealth" status—introduced aproposal in the Chamber of Representatives for a referendum on
the PRTC sale; the PNP majority defeated the motion.
[Article by Jose Fortuno for a-infos 7/2/98]
The government has started a public relations campaign to counteract "negative images" in the US resulting from the general strike. The campaign, designed by the Hill & Knowlton agency, will run in July and August at a costof $500,000. [ED-LP 7/12/98] "In Puerto Rico, It Is Business as Usual," announced a full-page advertisement in the July 12 New York Times, sponsored by nine Puerto Rican companies and business associations. The general strike "had very little island-wide support and did not materially affect the island's robust economy," the ad read. "Estimates offered by one of the island's largest dailies [unnamed]...calculated the turnout at about 13,000." [NYT 7/12/98]
General strike
On 7 and 8 July, over 500,000 people engaged in a general strike across the island. The strike – endorsed by over 50 unions – forced the closure of shopping malls, banks, hospitals, and government offices. 14,000 police officers – 95% of the force – was activated to maintain order. Commerce and tourist activity around Puerto Rico were halted as crowds of protesters marched in the streets.Strike organizers called for a referendum on the sale, pointing to polls indicating a 65% disapproval rate. Governor Rosselló refused to speak with union officials or activists, and reportedly went on vacation during the general strike.
Travel disruptions
Traffic to the Luis Muñoz Marín International AirportLuis Muñoz Marín International Airport
Luis Muñoz Marín International Airport is a joint civil-military public airport located in Carolina, Puerto Rico, three miles southeast of San Juan. Over 4 million passengers board a plane at the airport per year according to FAA reports . It is owned and managed by the Puerto Rico Ports...
was brought to a halt by the strike when activists erected barricades on the road leading to the terminal. This resulted in a tense five-hour standoff between 200 riot policemen and twice as many protesters, some of them armed with baseball bats and chains. The hours-long delay forced tourists to walk along the road for over a mile to reach the airport.
An agreement was eventually reached between protesters and police which allowed for the opening of two lanes of traffic. Still, movement was limited due to striking bus and taxi drivers. Two cruise ships also canceled stops in Puerto Rico because of the strike.
End of strike
On 28 July, union telephone workers voted to end their 41-day strike, after receiving assurances that there would be no reprisals for striking workers. Given the popular support of the strike and the island's history with PRTC, some were puzzled by leaders' willingness to call off the protest. Writing in the GreenGreen politics
Green politics is a political ideology that aims for the creation of an ecologically sustainable society rooted in environmentalism, social liberalism, and grassroots democracy...
journal Synthesis/Regeneration, Carmelo Ruiz asks: "What happened? The speed with which the national struggle against the PRTC's sale and governor Rossello's privatization policy fell apart points to an inside job. According to many activists, some spineless union leaders got cold feet in the heat of the fight and decided to back off. Others were more blunt: 'We were sold out.'"
Sale and aftermath
When the Federal Communications CommissionFederal Communications Commission
The Federal Communications Commission is an independent agency of the United States government, created, Congressional statute , and with the majority of its commissioners appointed by the current President. The FCC works towards six goals in the areas of broadband, competition, the spectrum, the...
(FCC) approved the sale in 1999, the GTE consortium named Jon E. Slater as the new PRTC president and CEO. GTE announced plans to invest US$1 billion in the nation's telecommunications infrastructure, focusing on upgrades to the network and wireline growth.
While the strike-ending agreement forbade reprisals against workers, the president of the Government Development Bank
Puerto Rico Government Development Bank
The Government Development Bank of Puerto Rico was the brainchild of Governor Rexford Guy Tugwell, who signed Law 252 of May 13, 1942, creating the institution in charge of economic development for the Government of Puerto Rico...
, Marcos Rodriguez-Ema, admitted before the strike that the new PRTC owners would impose "voluntary layoffs, shifting of employees from subsidiaries to other companies, and early retirement".