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Municipal Report: Bogus Experts, Bogus Concern
Faking interest in broadband deployment to maximize revenue
by Karl Bode 08:31PM Tuesday Oct 31 2006
Editorial: Outfits such as the Reason Foundation, Competitive Enterprise Institute and the Heartland Foundation are free-market think tanks that proudly proclaim that eliminating government oversight in the broadband sector will result in broadband utopia. Their editorials and position papers insist they are concerned with "optimizing broadband deployment" in this country. However the real agenda, as always, is maximizing revenue for themselves and their constituents by eliminating all regulation, creating an utterly toothless regulatory authority, and letting the nation's largest corporations run wild.

With that in mind, the groups have banded together to issue this compact under the Freedom Foundation flag. The piece attacks government oversight and municipal broadband, offering free-marketeers a guide to a better broadband tomorrow.

"As scholars and analysts specializing in broadband policy, we recently convened online to examine the issue," the group notes. "Empirical research and economic rationale guided our deliberations," the group insists. The only problem is that the crew of "scholars and analysts" assembled to tackle the nuanced debate over muni-broadband all share the same ideology, and nearly all of them are in one way or another tied to incumbent telecom providers.

Signees for the free market manifesto include gentlemen such as the Heartland Institute's Joseph Bast, whose organization obfuscates its funding, then rails against what it dubs the "junk science" aimed at the tobacco industry. Also signing off on the manifesto is Sonia Arrison, an employee of the telco-funded Pacific Research Institute, whose pro-incumbent editorials appear frequently in papers and websites across the nation without her ties to industry clearly illuminated.

While these financial ties obviously do not invalidate these groups' positions, the suggestion that these outfits are concerned with broadband "deployment" should be insulting to those interested in honest debate over this nation's telecom infrastructure. These groups and the compact's signees are concerned with one thing: maximum possible revenue for their clients and donors.

Their focus is not to increase broadband deployment. That would require offering broadband services to rural portions of America, where their employer's ROI would be dubious and stock prices would suffer. Whether you can get DSL in the remotest regions of your Ohio suburb is the very last thing on the mind of individuals such as Joseph Bast and Sonia Arrison, or organizations such as the Heartland Institute.

The coalition's suggestions for "maximizing deployment", include the elimination of all "unnecessary regulations", telecom taxes or fees (though as discussed many of these are phony and imposed by the providers themselves), as well as ensuring that municipalities are "prohibited from investing in, managing or operating broadband infrastructure and services."

But wait: wouldn't banning towns and cities from offering broadband be regulation? And wouldn't it be "un-necessary regulation" considering companies like AT&T have discovered they can simply compete in the muni-wireless sector? Strange how such rabid fans of a free-market aren't interested in allowing market darwinism to play out.

The reality is that these groups only oppose regulation when it runs contrary to the interests of their corporate financiers and their own portfolios. For the right price, these groups would find regulations preventing the dumping of toxic chemicals into river water equally "unnecessary". They'd quickly offer expert analysis and statistics suggesting mutant frogs are a boon to the local ecosystem.

While there are certainly flaws with many municipal broadband models, these are decisions that should be made by the communities themselves, not subjective analysts on the payroll of major telecom providers. Fans of a free market should be eager to see the organic free-market at work. If these municipal broadband operations are such a flawed idea: let them fail.

While incumbent providers have every right to declare an area unprofitable, they should not have the right to then ban these communities from wiring themselves. These broadband black holes were created by the providers. They should either fill them or get out of the way, taking their cadre of subjective experts with them.

The country's largest corporations currently control both sides of the debate over this nation's broadband policies. They freely voice their opinions via press release (and now blogs) on one hand, then pose as objective experts and even fake consumer groups to support these policies on the other.

What should be a meaningful dialog over this nation's broadband infrastructure has devolved into a dishonest stage-show where legitimate consumer concerns (such as rural broadband deployment) are increasingly marginalized.

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2 recommendations

reply to qdemn7

Re: When You Pay the Bills

"this is a frequent complaint of yours directed
against both individuals and groups. I suggest
when YOU personally start paying their bills
and running their finances then YOU can decide
who makes how much money."

Making money by selling goods and services to consumers is the free market. Making money or preventing others from making money by wheedling politicians with gifts and bribes is not the free market.

I don't care whether the desire for a command economy is rooted in a sincere belief or in corruption. Ultimately, it amounts to unequal protection under the law, government-supported monopolies, and the destruction of the marketplace. There can be no competition when some players are bribing the referee.

Dan Engel


2 recommendations

How to define "free market"

Several posters have indicated that the problem with this op/ed author's argument is that a muni-run broadband provision is outside of the free market and represents exactly the opposite.

In the case of broadband, and other services as well, such a statement shows a fundamental misunderstanding of how free-market principals apply.

As long as a municipality doesn't enforce a monopoly on the service (i.e., ban the provision of services by commercial providers) then the municipal- and community-based provision of services is nothing more onerous than the decision by a customer to obtain the product by building it himself rather than by buying it from the current set of commercial vendors. And that's the crux of the matter: broadband communication, especially with the fast-paced improvement in wireless broadband capabilities, is a relatively low barrier-to-entry market. Once somebody has access, it's easy to share, and sharing doesn't generally cause a significant degeneration of one's own service. Thus, for a community or municipality to build their own broadband infrastructure, and then simply pay a bandwidth-based fee to LD carrier is just an example of the customer competing with the vendor.

And there's nothing anti-free-market about that. In fact, the possibility and freedom for customers to do that is a necessary component of a working free-market economy.

-Dan Engel

The Kapil

Chicago, IL

2 recommendations

Every Action Has What?

An Equal And Opposite Reaction.

Keep going you right wing, bible thumping at the same time thumping young boys' bottoms, free market as the world - including working Americans - starves and free falls into poverty, death penalty promoting, calling a collection of cells a baby, while permitting genocide overseas, hell even committing genocide in Iraq, denying gays equal rights while getting divorced because you screwed an intern and your trophy wife is humping the Mexican gardener whom you've been trying to get deported, sorry excuse for a human being, jerkwads.

Push Harder to make this country and this world a more miserable place. Win this election next week. Kill More trees and more black men on death row. Consume more, buy more, spend more, dig more, extract more, recycle less, care less, be humble and in-tune with the rest of the planet even less than that.

Why? Because we're watching. The universe is watching. The power that be is watching. And we'll snap back twice as hard because blessed are they which do hunger and thirst after righteousness for they shall be filled.