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A question of independence

By Marguerite Reardon
Staff Writer, CNET News.com
May 2, 2005 4:00 AM PDT

Charges of "astroturf" lobbying are flying in the debate over municipal broadband, as researchers rush to meet the growing demand for data and economic analysis.

The term "astroturf" typically describes the use of artificial grassroots groups that pose as citizen initiatives but get major funding from corporate interests--a strategy perfected by the telecommunications industry in its fights with regulators.

Consumer groups complain that the Bells and cable operators are using a similar tactic in their efforts to prevent cities from building broadband networks that would compete with their own.

The phone and cable companies have weighed in on this topic, lobbying state legislatures to pass new laws that would prohibit or limit these networks. They've also taken their fight to the public, through advertising in various communities. Supporters of municipal broadband say these companies are also influencing the debate by helping fund self-identified independent research groups that criticize city-owned networks.

Groups singled out for criticism include The New Millennium Research Council, The Progress & Freedom Foundation and The Heartland Institute.

"It's deceptive when the public hears the name of an organization that sounds like a respected organization with some authority behind it, when in fact it is being backed by an interested party," said Kenneth DeGraff, a policy advocate at Consumers Union, the publisher of Consumer Reports. "We look at issues purely from the consumer's perspective. Sometimes we agree with the phone companies, and sometimes we don't. But we never accept any money from an interested party."

One of the most vocal groups to speak out against municipal networks has been the New Millennium Research Council. Earlier this month, it published two studies raising "serious questions about the need for and viability" of the recent business plan for Philadelphia to build its own wireless broadband network.

In February, the NMRC also published a scathing report called "Not in the Public Interest, The Myth of Municipal Wi-Fi Networks," which cited several examples of municipal broadband deployments that had failed.

NMRC, which describes itself as an independent research network that pools policy experts, is owned and operated by a large public-relations and lobby firm called Issue Dynamics, based in Washington, D.C. All four of the Baby Bell phone companies--BellSouth, SBC Communications, Qwest Communications International and Verizon Communications--are listed on the company's Web site as past or present clients.

Comcast, the largest U.S. cable provider, is also on that list, as are industry groups such as the U.S. Telecom Association. What's more, the experts who have authored these reports also have ties to the phone and cable companies. For example, David McClure, who contributed to the report in February, is CEO of the U.S. Internet Industry Association, which is also listed as a client of Issues Dynamics. Verizon holds an IIA board seat.

Open debate
Samuel Simon, the president of Issue Dynamics, said he sees his detractors' point of view, but he also said he feels that his company has been open about its relationship with the telephone and cable companies.

"I understand the complaint that people have with the reports from NMRC," he said. "But I feel reasonably comfortable that the relationships we have with our clients are transparent. We try to be reasonably open about the fact that some research funding is from business interest."

Allen Hepner, the executive director of NMRC, defended his organization's practices and reports.

"I think it's terrible that people's immediate knee-jerk reaction when a paper comes out that is critical of something is to say that it has certain preconceived perspectives that come from a funder," he said. "I ask people to read the reports that have been put forth by a composite of independent experts and assess the report on the merits."

Representatives from the Progress & Freedom Foundation assert that its research is not biased even though it receives funding from Verizon and Comcast because it also receives funding from companies such as Intel that back municipal broadband.

DeGraff and other supporters of municipally owned networks have said that much of the information presented in these reports is inaccurate. In an effort to present their side of the argument, the Free Press, the Consumer Federation of America, and the Media Access Project teamed up on a report called "Telco Lies and the Truth about Municipal Broadband Networks." The report includes a section disputing all the claims found in NMRC's reports about municipal broadband projects that have failed.

"I would love to debate the facts," said Jim Baller, a principal attorney at The Baller Herbst Law Group, which represents many municipalities. "I don't care who funds them, as long as they are truthful. But the information they are presenting is inaccurate, and it continues to be perpetuated through the media. It's outrageous." End box

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Answering 'A Question of Independence'
by May 3, 2005 8:51 AM PDT
The May 2, 2005 CNET article, ?A Question of Independence? by Maggie Reardon makes an excellent point that there is a growing demand for data and economic analysis of municipal networks. The vast preponderance of news coverage of these proposed networks has ignored the economic questions and focused solely the rosy predictions of local leaders. Seeing this, in February 2005, the New Millennium Research Council (NMRC) brought together six respected and independent national experts to provide a critical review of municipal entry into the broadband market. These experts, from noted institutions around the country, offered thoughtful critiques of this issue, but were labeled as disreputable by opposing interests. These scholars sought to expand the debate on an important public policy issue and offer policymakers a diverse range of opinions from which they could draw upon when making decisions that could commit millions in taxpayer dollars.

Since the NMRC report was released, there have been a multitude of articles, both pro and con on the topic of muni networks. The conclusion, there are differing views on the successes or failures of past municipal owned or operated networks.

The authors contributing to the NMRC report outlined real-life economic and operational issues associated with municipal ownership of Wi-Fi networks. Mr. Baller, who to be clear represents municipalities in this matter, is quoted in Ms. Reardon's article as saying the information presented "in these reports" is inaccurate...and outrageous." The NMRC authors stand by their words and by the information presented in their papers. Unfortunately, this 'debate' has degenerated into a 'lies, damn lies, and statistics' counter claim. An, 'I'm right, and you're simply wrong' diatribe. The lone purpose of the NMRC paper was to infuse additional thought on the matter. An abundance of information, from which policy makers could ideally make better decisions, is no doubt the basis for healthy debate.

Unfortunately, instead of debating the issue, proponents of municipal networks have focused on purported ?outings? of the messengers they disagree with rather than on the merits of the argument. Critics claim that because an organization receives funding, it is automatically disqualified from commenting on public issues. As Patrick Ross of the Progress and Freedom Foundation (PFF) recently wrote on the PFF blog following criticism of PFF?s release of the Lenard and Thierer papers,
?. . .sometimes organizations are paid to say things, and other times organizations are paid because someone likes what they're saying. All the difference in the world lies in that causal chain.?

Finally, a key point to be made is that many who criticize the NMRC have direct financial interests in opposing the NMRC expert's message. As lawyers and consultants serving the very cities and businesses who are considering and operating municipal networks, these individuals are paid to dispute arguments that run counter to their clients? goals. The NMRC encourages healthy debate on the substance of the issues surrounding the future of municipal broadband networks.
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Hepner is an assistant VP at Issue Dynamics
by May 3, 2005 9:37 PM PDT
It is typical of Hepner in his role as a public relations executive to spin the issue by putting on the one side the authors of a report few of whom disclose their organizations' funders and who attempt to represent themselves despite that as indepedent and on the other openly partisan municipal networking advocates that make no bones about their paid and no-fee associations.

Hepner is an assistant vice president at Issue Dynamics. In this role, he acts as executive director of the NMRC. His paycheck comes from money that comes from incumbent telcos and cable firms that are using Issue Dynamics's advertised services to sway public opinion through issuing reports in their favor.

The NMRC report has no opposing viewpoints. It is monolithically opposed to municipal networks. It contains virtually no principal research, relying, in many cases and its most critical fact-based cases, on reports such as the Beacon Hill Insitute March 2004 report against municipal cable and broadband which was funded by the New England Cable Telecommunications Association. The Beacon Hill report was entirely second-hand with no original research, misrepresented many key dollar figures in the networks they surveyed, and relied mostly on information from 2001 and earlier.

There is plenty of fact-based refutation between Muniwireless.com, my site (Wi-Fi Networking News), the Free Press organization's reports, and even the publicly available finances of many of the institutions that the NMRC and Beacon Hill cite as failures which are thriving.

I have written a longer reply to Hepner's response and this article at wifinetnews.com where I also link to a chart I created that connects the dots using publicly available information between Verizon, Issue Dynamics, and many of the parties involved in producing the Beacon Hill and NMRC reports as well as the NMRC's Verizon-funded board of directors.
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